The Decentralised Internet and Social Impact – A Beginner’s Explainer

Will Dayble, the founder of the Fitzroy Academy, explains what we mean when we talk about the decentralised internet, and the potential impact it could have.

Last week I had a bagel with Nick Byrne from Typehuman to talk about the decentralised internet, which for the uninitiated is a lot like the internet we have now, but spread amongst and owned by the people who use it.

Nick knows (mostly) what he’s talking about.

If you’re part of the larger group of people who don’t, stick around. This piece is a somewhat hefty attempt to bring you up to date.

We’ll start with the basics and build up to the complex stuff. We’ll meet internet criminals, look at impact evaluation, delve into business models, break education certification and disintermediate a thing or two.

Hopefully you’ll end up as excited as us about the impact potential.

What is the decentralised internet?

It’s probably best explained by what it isn’t anymore.

The internet started out quite decentralised. People made their own web pages and linked them to others. We chatted to one another anonymously on IRC chat rooms and open source bulletin boards.

This kind of system is inherently powerful, and power attracts power. Pretty quickly the internet became centralised into the form we know it today.

But why does this matter to you?

The centralised “you”

When you log into Facebook your password, pictures, and data are stored with one company, Facebook. Same with Twitter, Google, and pretty much every other website on the planet. Your data is held centrally.

This creates huge benefits and economies of scale, but it also creates some serious problems around who owns your data. When the virtual “you” is spread across multiple monolithic tech giants, who owns you?

In effect, the tech giants own the digital “you”. They own the connections between you and your friends, your words, your pictures, the specific timing of when you did those things, your digital soul.

This makes many people understandably nervous.

A decentralised vision of the same digital soul might involve having your own little “data vault” held on your home computers, or perhaps stored securely in the cloud. It could have information about your tastes, who your friends are, your pictures and passwords, even your money and deeds to property you own.

One hilariously American idea I heard (when speaking on the UX of privacy at the International Association of Privacy Professionals in 2013) was that keeping user data on a home computer means an individual can lock their front door and defend the computer with a gun. Security! USA style.

So the decentralised internet might mean taking your digital soul back from Facebook and Google. It might be distributed back to the person who made that data in the first place: you.

So why is decentralisation of identity a cool idea?

Nick answers: “What excites me is that we can build models that don’t allow for data monopolies, which will force business owners to build a defensible position through methods other than data monopoly. That can force people to cooperate in ways we haven’t had to before.”

This matters to the social sector because change starts at home, with the behaviours and incentives of the people involved in driving change.

But while you’re thinking about guns, let’s look at some classical criminality to explain another important component of all this: protocol.

Protocols and BitTorrent

Just in case you didn’t use the internet in the early 2000s, there was an era when some low key famous internet punks at The Pirate Bay popularised a decentralised media transfer protocol: BitTorrent.

BitTorrent was actually invented by an American in 2002, but you’re probably more familiar with the “you wouldn’t download a car” ads.

The interesting thing about BitTorrent is that it’s a protocol, which is a fancy word for “a specification we all agree on”.

It’s a bit of code that helps lots of disparate people agree on a way to share files around between themselves, from peer to anonymous peer.

In the BitTorrent protocol, files are split up into little parts and distributed amongst people within a network. No individual owns the file. It’s an anarchically democratic way of moving files around.

Here’s a handy explainer:

We’ve learnt two important components of decentralisation so far:

1. Ownership moves away from institutions to users.
2. Moving data from person to person is easy.

The next and presently exciting component of decentralisation is the digital transport of things more valuable things than pirated movies: Cash.

Crypto!

Internet cash, digital gold, cryptocurrency, or for the uninitiated: Bitcoin. (Calling all cryptocurrencies “Bitcoin” is a bit like calling all vacuum cleaners “Hoovers”, but you get the idea.)

Again, another short explainer video:

Without going into the detail of the many and varied forms of crypto out there right now, the useful bit is that we can move value around from person to person without an institution in the middle.

This disintermediation component is where things get really interesting for people in the social sector, as it strongly resonates with current best practice around empowering people to create change on their own terms.

Nick says: “It’s a little like when feudal land ownership was replaced with land owned by common people. There are decent comparisons to data nowadays.

“The feudal lords of data are Facebook and Google, and we’re toiling in their data fields without owning the profits of that labour.

“But we’ll see a transition, either from the bottom via creative destruction, or from the top down via things like the GDPR in the EU.”

Crypto can put power in the hands of the users.

Another interesting thing about crypto is that apart from a few (rather expensive) mishaps, the fundamental protocols haven’t been hacked. If an individual could “break” bitcoin, they’d be an instant zillionaire.

Mind, there are stories of failure: Tether is an unfortunate example of a stablecoin (a digital currency tied to fiat, in this case the US Dollar) that is having some pretty serious issues and copping a lot of flak.

But these issues are par for the course for new, risky technology.

The fact that truly game-breaking hacks haven’t happened yet is reasonable proof that cryptocurrency just works. That “proof” is what allows people to make plans about using the methods (if not the code itself) of crypto for bigger, more interesting things.

So even if you don’t own any cryptocurrency, it’s here to stay.

As Sizhao Yang‏, co-creator of Farmville eloquently explains in this insightful Twitter thread, we don’t need that many people to get excited about crypto for the rest of the population to be forced into adopting the new paradigm.

So what does this mean for the social sector?

First, thanks for sitting through the basics. Let’s recap:

1. Decentralisation provides alternatives to centralised authorities.
2. Early prototypes seem to be working, and they hold up under pressure.
3. Decentralisation allows people to cooperate in cool ways.

There are patterns in this that empower communities of people with collaboration powers that don’t rely on benevolent dictatorships or institutional power.

Is this disintermediation terrifying for institutions?

In a word, yes.

In two, hell yes.

In a few more: Yes, but only if they don’t catch up and play nicely. Let’s look at tertiary education as an example…

Democratising learning

One application I’m excited about is decentralised educational authority.

We still rely on quite heavily on institutions for certification: i.e. proof that someone has probably gained knowledge or skills, with the corollary that said knowledge/skills gained are valuable.

The alternative might be a decentralised web of data about who has taught what to whom, with peer-to-peer validation of the “authority” of the learner and teacher, in a network of trust.

It’s theoretical, but it’s fun to think about.

As the decentralised solution to this issue is theoretical (disregarding micro-credentials for the moment, as they seem to be chopping up the existing paradigm into little parts, not rebuilding it wholesale), let’s throw some light on the problem:

Who certifies the certifiers?

One understandable criticism of the current certification model is the “signalling” problem: i.e. that a certification is mostly useful as a way to signal to employers that you have traits they value (like conscientiousness and conformity), but isn’t a useful measure of having any actual skills.

Julia Galef id a good podcast / interview about this topic.

Hopefully you can see the patterns around centralisation playing out: The institution defends the value they’ve built up over time, falling into rent seeking instead of proactively creating good user experience.

Hackers build something to replace it, which accelerates the change until we hit a critical point when the authority of the incumbent crumbles. Rightfully so, as they’re not creating much tangible value any more.

I’ve just pissed off all my friends in universities, and for that I sincerely apologise. I love you dearly.

But let’s briefly imagine what a decentralised educational future may look like, and why it could be good for everyone:

• We could track an individual’s teaching potential in a decentralised market, or we might find a more truthful measure of who learns from whom, via peer to peer learning and teaching evaluation.
• By creating peer-to-peer systems for “success” within learning, we could undo some of the biases and embedded problems so inherent in academic systems, or at least shake it up enough to make things interesting.
• We might drop the concept of certification entirely, and instead look at the change in outcomes at the individual level, on some sort of standard public ledger, as defined by our students.
• By valuing research against a digital currency, a sort of “research-bucks”, we could have a more definite valuation of research so researchers don’t have to waste their time teaching if they don’t want to.

This could mean efficiencies for teachers who are so passionate about their students, researchers doing great research, and students spending more time learning and less time mucking about in antiquated marking systems.

Decentralisation of research funding is already happening at experiment.com.

However, as per Sayre’s law, a problem within academia is: “The politics are high because the stakes are so low.”

Does that sound like the arse-covering and bureaucratic slowdown that happens in many larger social sector orgs?

Kevin Starr from Mulago has a novel concept on fixing this problem: “Let’s fire people! Didn’t measure impact? You’re fired! Built pump wells without a maintenance plan, launched another doomed non-timber forest products project, thought ‘awareness’ was sufficient to drive change? You’re fired! Failed to pivot in response to data or didn’t gather the data at all? You’re fired! No evidence of lasting change? You’re fired! Directed others to do the above from your comfy office? You’re fired too! Wouldn’t that be great?”

While Kevin’s hyperbole makes punks like me happy, it’s a pipe dream without an enforcement method. Cypto may hold the key to that enforcement method, if the decisions to fund and not fund things are held with the crowd, not a benevolent authority.

And again, we see the pattern playing out again: Those who move quickly and adopt new protocols thrive. Those who don’t end up playing defence.

Too theoretical? Let’s glance at some practical, implemented examples:

Example 1: Poverty and decentralisation

GiveDirectly have famously proven (with rigorous evidence) that unconditional cash transfers are one of the most highly effective ways of lifting people out of poverty.

Now the actual method of delivery is more complex, with a set of independent checks to verify that recipients are eligible and did not pay bribes, such as physical back-checks, image verification, and data consistency checks.

But again, the pattern plays out. When decentralisation works it does so at absurd scale and effectiveness.

Example 2: Activism within oppressive regimes

Privacy, access to funding and support, and free collaboration are hugely important to activists. Especially so if those activists are working within a regime that doesn’t treat activists kindly.

Mesh networks (a bunch of phones connected together to make a mini internet, via bluetooth or wifi) are a good example of decentralised technology that obviates centralised authority.

Various regimes have shut off the internet, usually with chaotic and dangerous results. Decentralised networks may help alleviate the pain, and if robust enough, obviate the threat.

Example 3: Markets for social impact evaluation

Damian Hajda and the Socialsuite crew are looking into using cypto-style technology for outcomes measurement, essentially “smart contracts” for funding based on verified social impact.

In many ways, automated impact measurement, evaluation and subsequent funding could be a sort of programmable social impact bond, which many in the impact measurement space would consider the holy grail.

I’m personally dubious of how effective this sort of technological approach to something as complex as impact measurement would be. However, “I don’t believe it can be done” is usually the last thing some smart-arse says before a kid with a computer in a garage proves them wrong, so watch this space.

Damian and crew are capable folks, so I can’t wait to be proven wrong.

Example 4: Crowd equity and ownershi

Anna Liz Guenther, CEO (and force of nature) at New Zealand’s crowdfunding platform PledgeMe has moved to Queensland recently to work on the growing Australian equity crowdfunding market.

Equity crowdfunding is like crowdfunding except in return for donating to an organisations startup costs, you earn a chunk of ownership in the organisation. There are legal barriers to widespread adoption of this stuff for small organisations in Australia, but that may change.

This idea is pretty much what an ICO (initial coin offering) is. And naturally, there’s already been an ICO for an impact-centric coin.

PledgeMe aren’t using crypto for their offerings (yet), but if people like Anna are working in this space, it’s worth paying attention.

Anna says: “Crypto is cool, but it’s hard enough being regulated with real cash money!

“I think decentralised markets make sense because they can help remove biases and empower communities to make their own decisions.

“My thing with decentralisation is: You still have people involved. How do you empower and inform them?”

Example 5: Effective aid distribution

As a means of addressing the challenge of providing food assistance to over 80 million hungry people worldwide, the World Food Program is taking early steps with the Building Blocks project to harness blockchain technology to be able to deliver assistance more effectively.

In 2016 WFP established a prototype, and as of this writing is piloting a more robust version of the blockchain system in Azraq Refugee camp in Jordan, with more than 10,000 Syrian refugees.

Example 6+: But wait there’s more

If we went through an exhaustive list of potential applications we’d have to enumerate almost every existing business and impact model on the planet.

Here’s some ideas you can google/chew on/debate amongst friends:

• microfinance for tiny home loans (for tiny homes), to house homeless populations, travelling innovators, and everyone else who can’t get into the property market;
• markets for trading carbon credits at small scales, allowing SMEs in developing nations to get involved in larger markets;
• peer-to-peer marketplaces for renewable energy (powerledger.io did a $34M ICO late last year);
• distributed recognition of impact evaluation research, and funding allocation for programs that build programs on existing research;
• real estate; and
• integration of crypto protocols with other crypto protocols for safe, distributed markets of markets. You might trade your “impact bucks” for “education coins” and trade that in a market to buy or sell carbon credits.

If the last option sounds confusing and insane, that’s because it is. Except for the bit where people are already working on this stuff.

What does this mean for the Australian social sector?

As usual with any prediction it’s foolish to be concrete.

We can however safely predict that interest in new business and impact models will rise, especially amongst young, technically savvy changemakers.

If we decentralise the concept of a hammer amongst an entire generation, many existing power structures may start to look like pound-worthy nails.

Nick says: “Compare our entrepreneurial incumbents – who have fallen into rent-seeking – to the new school social and systems entrepreneurs.   

“The new kids are cooperating in order to fight against the incumbents.”

While changemaking is still about people empowering other people, the tools available to the technically savvy ones are getting more and more sophisticated. Look out for democratised democracy, new funding models for impact, and – because internet – pictures of kittens.

The future is here, it’s unevenly distributed, and it’s decentralised.

A small disclaimer: If this article sounds like an advertisement for Nick and Typehuman, apologies. I’m interested in their work, optimistic about crypto, and decidedly optimistic about decentralisation in general. I’d like to see more tech-savvy moonshots in the social sector, especially in Australia. I’m not employed by these folks, nor did they ask me to write this piece.

And last of all: Thanks to my crypto guardians Anne Wu and Ross Hill, for constantly schooling me on the important stuff.

About the author: Will Dayble is a teacher, and founder of the Fitzroy Academy, an online social impact school. The academy works with students and educators to teach people about entrepreneurship and social impact. Will is at once a loyal supporter and fierce critic of of both the startup and impact ecosystems.

This is the second in a regular series of articles for Pro Bono Australia exploring impact, education and startups. Please do reach out with advice, commentary, criticism or ideas: will@fitzroyacademy.com.