CRYPTO FOR GOOD

STEVE TENDON

A LOT OF BELIEF IN THE POWER OF BLOCKCHAIN, AND ITS POTENTIAL FOR SOCIETAL PROGRESS. HE TELLS THE BLOCK WHY IT’S TIME TO ENGAGE WITH THE CHANGE.

Steve Tendon has been a very vocal and very consistent evangelist for blockchain and distributed ledger technology. His soft-spoken demeanour belies a real commitment to the cause of the Blockchain Island, a concept that he considers goes beyond an actual physical space. He explains how we’ve yet to scratch the surface of what’s possible with this emerging tech, and his excitement at the potential for positive societal change is infectious.

He uses a recent initiative by the Maltese Ministry of Education to illustrate his point. The Ministry intends to place academic titles on the blockchain. While this may outwardly seem like a bland move – databases are nothing new in education – there are characteristics that are unique to blockchain that stand to make a significant impact, as Tendon explains. “You might say ‘So what? We’ve had academic titles in databases before. It’s not a big deal’. This is where you need to think about those two properties that the blockchain has, which are lacking from conventional database technologies. Because such a system would be global and un-censorable, it becomes much more difficult to create fake academic titles. But the more important aspect is what this could signify in situations of great distress…”

Tendon explains how using blockchain to record academic titles ends up democratising the process – in essence, people end up having greater ownership over their qualifications. This would be exceptionally desirable in situations of displacement under duress. Tendon uses an example from recent history to illustrate his point. “Look for instance, at what happened in Syria. The country had a population of highly educated people – doctors, engineers and the like, who literally had to drop everything and flee to other countries,” he explains. “They land in other countries and are asked who they are”. In a world where academic qualifications are recorded in a trustworthy and immutable fashion, displacement under duress need not mean a complete career reboot. This would be obviously desirable to the displaced individuals themselves, but also to the countries that give them refuge, that would be able to benefit from their easily-verified skills.

Tendon mentions other examples of the democritising effects that blockchain technology can have when centralised authority fails to be a solution, or actively becomes part of the problem –referencing difficult political situations in places like Ukraine and Turkey. However, there is also the potential to remove middle men, even when these are private actors. Tendon mentions the huge relevance blockchain has for cross-border remittances. Currently, relatively small remittances are subject to hefty charges as middle-men and monopolies conspire to take a hefty bite out of such payments.

Migrant workers sending money home to their country of origin is a hugely underrated catalyst for growth in developing countries. Taking the middle men out of the picture, along with the arguably unfair charges that come with them, would result in a huge increment in the development potential of these cross-border remittances – another example of the deeply impactful positive change possible through blockchain.

Tendon goes on to reference other real-world problems that could find their solution through blockchain, but the one that really hit a chord with me involved the sub-prime mortgage crisis of around ten years ago – one of the defining historical developments for anyone my sort of age. According to Tendon, the solution to the problem of fractional reserve could well lie in crypto. When I ask him about the potential for self-executing smart contracts mitigating risk by virtue of the increased speed of access and outcome, he’s a little more cautious, but also concedes that the potential is there. The potential to avoid a repeat of “all those artificial problems that became real”, as Tendon puts it, is a potential blockchain disruption that could stabilise markets – irony intended.

However, his focus remains on the positive potential of blockchain technology when it is actually embraced by the established players, particularly central bankers. “The central banks could adopt this technology both as a way to prevent the popularisation of cryptocurrencies but also, and this is much more subtle, as a way to avoid the crisis because it gives a means to counter the negative effects of fractional reserve.”

Steve Tendon’s dream of a blockchain space might not be round the corner, but it is down the road. The level of willingness by state-level actors to embrace it might be a factor in how quickly this dream comes to fruition, but when a certain critical mass is reached there will be no fighting the change. “Malta is showing what the real game-changer is – a shift in the mindset and perspective of the people in charge,” Tendon tells me. “They realised that this crypto-sphere has so much to offer in terms of benefits. If we do this the whole country will become much more prosperous and everyone will be better off”. Ultimately, that should be the ballgame…