The Internet and social media have enabled unprecedented networking of the world. Contact across thousands of miles, polling thousands of followers, interacting in communities large and small – all of this is possible in near real time with just a few clicks. This holds incredible potential, but is it currently being used?

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In social media, people spend most of their time in algorithmically controlled resonance rooms of their own worldview. Genuine discourse is avoided – it is bad for the time spent in the networks and thus bad for advertising revenues. Opinions are thus reinforced, fronts hardened, and the effects on democracy are fundamental. Echo chambers of one’s own opinion intensify political polarization, and the democratizing potential of the Internet is not only not used, but its modes of operation are diametrically opposed to consensual discourse. 

In this way, forward-looking technology quickly becomes a driver of social division. But the potential can also be used in a different way. We can use the blockchain to achieve new forms of governance that ensure transparency and integrity. Blockchain offers solutions in corporate and public governance. After all, the Corona pandemic has shown that we need digital solutions for elections with integrity. 

The digitization of corporate governance

General meetings, as meetings of shareholders, are the highest decision-making body in corporate governance. However, holding them in times of pandemic and accompanying restrictions on freedom of assembly is not possible. Does this present an opportunity for the digitization of corporate governance? 

At the beginning of the pandemic, digital general meetings would have been difficult to imagine. But lawmakers in Germany and other countries have already made legislative changes that allow electronic voting procedures. Now, simplistic digital voting procedures have been around for some time. But corporate governance elections must meet the same standards as public elections. To ensure trust in digital voting procedures, they must be transparent, tamper-proof and uninfluenceable. In theory, a voting system based on distributed ledger technology can do just that, ensuring the integrity and security of an election. Of course, however, the design of the voting system is crucial here. All relevant requirements must be considered in the design. 

After all, an election must still contain one fundamental attribute – it must be secret or anonymous. Isn’t this requirement diametrically opposed to the functionality of the blockchain?

The Zero-Knowledge Proof

No, because there are various ways to map anonymity via the blockchain. One of the most important is the so-called zero-knowledge proof. To put it simply, the actual identity of the person entitled to vote is not stored for authentication purposes, but only the proof that the person is actually entitled to vote is stored via smart contracts. In effect, only the proof of knowledge, or in this case identity, is stored, but not the actual information, which in this case is a name. If the proof is correct, a blockchain account would be created, which can then be used to cast a vote. 

The vote thus goes directly to the blockchain, where it is counted by a smart contract. This eliminates the need for an intermediary, which would usually have to be protected against attempts at influence. An election thus becomes more trustworthy and secure. 

Data storage on the blockchain

Important data, especially personal information, is not stored directly on the blockchain, i.e. “on-chain”. On-chain, only access to the data is regulated. For this purpose, a hash is stored on the blockchain. The hash is a kind of checksum that is generated via the hash function. The hash function ensures that a unique output value is assigned to each input value. In principle, the hash can be described as the mathematical equivalent of a fingerprint. Smart contracts now use the hash to regulate access to text files (e.g., the names of candidates), which in turn are located in decentralized storage networks. The candidate lists are then only accessible to authenticated voters and cannot be changed because the hash is stored on-chain. 

On-chain federal elections?

That’s probably still a pipe dream at the moment. An election of this magnitude requires a scalable system, a user-friendly interface and, above all, an appropriate legal framework. All of this is probably not yet possible with the solutions currently on the market. But – and this is the most important word – it is not yet (!) possible. The idea of what a blockchain-based election can look like is there and it is feasible. The benefits are enormous, and it could create, in a comparatively simple way, an election system that would no longer have to face accusations of fraud, a process that guarantees systemic integrity, and that transparently and easily enables elections whose outcome is determined at the end of voting (rather than weeks later). 

To get there, however, we need to start smaller, loosely along the lines of “think big but start small.” There are already sufficient use cases, for example in associations or smaller companies, where we test decentralized voting systems and then gradually adapt them to the needs of larger elections. The key here is to always consider the most important requirements for an election – integrity, transparency and security – as a basis. 

And in the end, there is one more issue of utmost relevance: Blockchain-based election systems need political legitimacy. There needs to be a political and societal commitment to promote such solutions and work towards an election system with integrity. 

The blockchain as a technological basis for secure elections

Blockchain is not currently capable of mapping, for example, the German Bundestag election. But board discharges at general meetings or elections in associations are already possible. The applications and solutions made possible by blockchain can bring us a new era of trust. In which there is less arguing about the processes and more arguing about the content of elections. And in which the system itself guarantees integrity and trust. To achieve this, however, some crucial questions must be answered: What procedure is used to guarantee voter anonymity? How do you guarantee that only eligible voters cast ballots? How are votes counted? How can elections be protected from attacks? These are all questions that sometimes pose problems for current solutions, but the future will show that blockchain is a technology that will strengthen democracy. 

This article is the summary of BLOCKCHANCE Online LIVE #3, rewatch the show below.

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