**2. The deep web and cypherpunks**

Independently of the differences among the various digital assets, cryptocurrencies -as an asset class, and the blockchain -as a technology, have awaken strong emotions in market observers and participants. At the heart of the problem is whether these technologies merit their own existence; and if so, how to house them within the common categories of property and personal rights. Beyond that, the early use of these technologies by individuals in the deep web to make illicit and illegal trades [10], casted a negative shade that has proven difficult to shake. This negative impression has been further cemented by a general unscholarliness about the workings of these technologies and the inability of the common reader to tell these apart from each other. For instance, there is a generalized understanding that Bitcoin is "untraceable digital cash." As such, this digital cash tool could be potentially used to avoid the payment of taxes and to finance a myriad of illegal activities such as drug trade, terrorism, kidnapping, and extortion. So the semi-anonymity or anonymity quality of many crypto currencies is at the core of this unfavorable perception. Nonetheless, this sentiment is entrenched also due to the legend of the cypherpunk movement.

The cypherpunk was a 1970s' movement that advocated for less government control which, in their view, stifled economic growth [11]. This belief came together with a libertarian notion of freedom, and the intuition that a strong cryptography could guard against government interference in personal matters [12]. One aspect of the objectives embraced by this group, dealt with restructuring how people economically interacted with one another. And the solution proposed was the use of a digital cash currency that would be free from government control. In his paper "b-money [13]" Wei Dai described:

*[] A community is defined by the cooperation of its participants, and efficient cooperation requires a medium of exchange (money) and a way to enforce contracts. Traditionally these services have been provided by the government or government sponsored institutions and only to legal entities. In this article I describe a protocol by which these services can be provided to and by untraceable entities.*

Centered around the Cypherpunk email list [14], the group championed encryption as a way to shift power from the government to individuals. And as public-key cryptography evolved, they began to conceive how a future society could deal with money. Their attempts to develop a digital cash currency that would be free from government control underwent numerous stages and, through time, various publications described the possible structure of this future cash. However, it was David Chaum, the one who first proposed digital cash as files of digital value that were anonymous and exchangeable [15]. His 1981 paper: *Untraceable Electronic Mail, Return Addresses, and Digital Pseudonyms* [16], was the cornerstone for later research of "anonymous communications".

The cypherpunk generation achieved great progress towards the development of a decentralized, strong, online currency. For instance, Chaum created an algorithm which allowed the modification of coins without breaking the signature of the

mint. In his 1982 paper "Blind signature for untraceable payments. [17]" Chaum explained that the growth of electronic banking services, and the creation of automated payment systems would require to balance the need for personal privacy and the potential for the criminal use of payments. He then summarized that the ideal payment system would have the following three key properties:


To illustrate the use of this technology, Chaum proposed how by fulfilling the three enumerated properties electors at an election event could vote without having to meet at the electoral school to drop their secret ballots. Chaum's system would balance the need to keep the vote secret, the ability to verify that the vote was counted, and the capacity to prevent voter fraud.

In addition to Chaum, several pioneers also worked in other versions of electronic cash. One example is Hal Finney, a developer that came out with a Reusable Proof-Of-Work (RPOW), a short-lived solution called this way because it was based on proof-of-work [18]. But, as said, it was not until 2009 that after decades of technological evolution, hard work in cryptographic research, and many failed attempts, Bitcoin came into the market to become the first digital cash coin capable of withstanding the process of its own development.

#### **3. Emotions versus facts, and perception versus reality**

There are many reasons why people resist change. For one, change is a psychological experience that requires time to process. Furthermore, if change is big and unexpected a common reaction is denial. In this scenario, we can tell ourselves that nothing of relevance is happening and excuse our participation in the process. Feeling unprepared for the new environment also explains this rejection as people are pushed out of their comfort zones. Change implies a departure from the "old ways." Hence, those who did not catch up to the new version might feel superseded and are bound to be defensive about it. And, if change involves a new technology, a common concern is personal competence. People worry that their skills will be obsolete and, as a defensive mechanism, they might express skepticism about the success or adequacy of the innovation. In addition, change is likely to imply more work and this may ripple into resentments and other negative feelings. At the end, depending upon the position of those affected by it, resistance to change may be externalized in one of a variety of manners, from foot-dragging behavior and indolence, to sabotage and rebellion.

When new technologies displace old ones it appears as if whole sectors of society will be hurt. This will be particularly true when those affected resist catching up with the times. In these instances, the damaged sectors can be quite large, as they might include different industries such as providers and users of the old technology. The emotional experience of these processes of resistance has been compared with "being irrational" (see Fineman, 1993 [19]). From this point of view, emotions are understood as the root of the problems, rather than an expression of the underlying difficulties confronted during the implementation of change. From a psychological

#### *Bitcoin and Ethics in a Technological Society DOI: http://dx.doi.org/10.5772/intechopen.96798*

perspective emotions are not necessarily destructive as they help individuals adapt to difficult situations. But they might motivate an unhealthy resistance that can block the ability of those under stress to assess the situations properly.

The common reactions to change introduced in the prior paragraphs might be able to explain, in part, the strong emotions shown by mainstream media outlets and many relevant figures in society when reporting about cryptocurrencies. Albeit the recentness of the innovation, and that the high volatility experienced in these markets alerted many, the way concerns were expressed frequently showed a high level display of emotions as well as a limited understanding of the technology. These expressions of "hate" most often addressed all products grouped under the "cryptocurrency/Alt-currency" headings as if these were equal or equivalent assets. That is, in general, many commentators did not differentiate between key aspects of the technologies underlying these assets. Be it news, investment or entertainment, television or written press, online media including social media outlets, all expressions published on these forged the vantage point of millions of people when thinking about cryptocurrencies.

For instance, at a public forum reported by the Financial Times on February 15, 2018th, Berkshire Hathaway vice chairman Charlie Munger depicted Bitcoin as "totally asinine [20]" adding it should receive a government crackdown. On March 5th, 2018th, Harvard economist Kenneth Rogoff told CNBC reporters that Bitcoin is *"more likely to be worth \$100 than \$100,000"* by 2028 implying its value depended upon its use in *"money laundering and tax evasion* [21]*."* Another laud Bitcoin basher was JPMorgan CEO, Jamie Dimon [22, 23] who declared publicly and repeatedly his disdain for Bitcoin. For instance, during a public conference in New York, Dimon declared that trading the virtual currency "*was stupid*" and he [24] would "*fire in a second*" anyone found doing it at his firm. Later, while at the Aspen Institute's 25th Annual Summer Celebration Gala on August 5th 2018, Dimon called Bitcoin a "*scam*" and a "*fraud* [25], "and reiterated comments he had made a year earlier when stating that Bitcoin was:

*"worse than Tulip Mania" and "only for people in countries like Venezuela [26, 27], Ecuador or North Korea [28, 29] "or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in Bitcoin than US dollars." "So there may be a market for that, but it'd be a limited market." He further argued that "governments should shut them down if they were uncapable of controlling them" [30–32].*

Three examples of articles whose titles already show laud emotional content are: 1) Nobel award winner Paul Krugman's "Bitcoin Is Evil [33]"; 2) Charlie Stross' "Why I want Bitcoin to die in a fire, [34]" and 3) Nobel Laureate Robert Shiller's "Cryptocurrencies have a mysterious allure – but are they just a fad?" [35] Some of the statements made in these literally include: *Bitcoin comes with an implicit political agenda attached, it is designed to be untraceable, and easy to hide, libertarians love it because it pushes the same buttons as their gold fetish and it does not look like a "Fiat currency", it will become central to a commodities markets where the goods traded will include assassination, drugs, child pornography and so on, Bitcoin was designed for tax evasion, Cryptocurrencies are designed by people who hold themselves above national governments* [36].

Given the histrionic nature of many publications, in 2018 Gareth Jenkinson developed the idea of testing the waters of "hate-going" emotions when it came to cryptocurrencies. His findings were published in a cointelegrapth article: *Tulips, Bubbles, Obituaries: Peering Through the FUD About Crypto* [37]. In this work, the author showed that during the nine-year-existence of Bitcoin, more than a handful obituaries asking for its 'death' had been published. These writings came from a wide variety of industry experts and commentators who offered their overall

subjective and negative comments, showing a fear-mongering mentality that tried to belittle the breakthroughs sparked by the blockchain technology. In his section "A brief history of Bitcoin deaths," the author analyzed instances when mainstream media outlets had signaled the death of Bitcoin. By 2017 these obituaries [38] contained 118 articles. As of mid-January 2021, this figure had increased to 395. Their conclusions were based on assumptions or quotes from a wide range of commentators who used fraud, money laundering, Ponzi schemes, and the likes to announce Bitcoin's demise. A glance down the list of headlines from the various publications helps assess the profound effect these could have had on the sentiment of many people. The examples brought here referred to Bitcoin but this type of press also affected other crypto assets [39] such as Ethereum. In this case, it was the web Digiconomist [40] the one who compiled the list of Ethereum obituaries between 2015 and 2017. Criticism has also affected other cryptocurrencies with plenty of pessimistic forecasts.

With respect to some of the most common criticisms, rebuttals have used the following arguments [41]:


With respect to the latter one, this report uses the generic "cryptocurrencies" under the *"Competition"* subsection of Item 1A of Risk Factors to explain a change in landscape with new competitors that can threaten J.P. Morgan's operations:

*"Both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation."*

### The new technologies

*"could require JPMorgan Chase to spend more to modify or adapt its products to attract and retain clients and customers or to match products and services offered by its competitors, including technology companies." And eventually this competition could "put downward pressure on prices and fees for JPMorgan Chase's products and services or may cause JPMorgan Chase to lose market share."*

#### *Bitcoin and Ethics in a Technological Society DOI: http://dx.doi.org/10.5772/intechopen.96798*

These observations are not farfetched as competitors have come to realize the potential of cryptos. This became particularly obvious as fellow giant Goldman Sachs revealed it was looking into the creation of Bitcoin Futures [48, 49], planned to buy and sell cryptocurrency and offered various contracts with Bitcoin exposure [50–52]. According to Goldman executive Rana Yared: the bank is not a bitcoin believer but it had to acknowledge multiple clients' requests to work with bitcoin.

Goldman and JP Morgan are just two among many banks who are taking notice of the changing environment. For instance, in its annual report to the Securities and Exchange Commission (SEC) filed 2018 Feb. 22 [53] Bank of America (BoA) stated to feel behind and "unable" to compete in the growing crypto market. In this report BoA recognizes that it will have to afford major costs to remain competitive in the cryptocurrency arena [54, 55]:

*"Our inability to adapt our products and services to evolving industry standards and consumer preferences could harm our business," BoA states in the filing: "the widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services []."*

Thus, BoA decided to innovate by requesting a patent for a cryptocurrency exchange system. However, this has not prevented the bank from stopping their clientele credit card purchases of cryptos [56] as the bank is very aware of how the new competition will be detrimental to its prospects as read in their SEC report [57]:

*"…The competitive landscape may be impacted by the growth of non-depository institutions that offer products that were traditionally banking products as well as new innovative products," and "this can reduce our net interest margin and revenues from our fee-based products and services. In addition, the widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services []."*

BoA's declarations to the SEC as well as those made by other institutions such as JP Morgan Chase [58] recognized that while cryptocurrencies endanger their business they are *"innovative"* and *"unlikely to disappear"* as they note obvious advantages in several traditionally problematic or slow areas, such as cross border or international payments.

With respect to Krugman's statements [59], his opinions have been challenged [60] on the grounds that the Bitcoin technology is an electronic payment system designed to work directly between sender and receiver, thus saving the users the 2–3% or higher tax taken by the processors. As a payment system, this technology is ethically neutral even if some use it for unethical purposes. Equivalently, the banking system has also been used by many to make illegal payments, but we do not call HSBC or the Deutsche bank "evil". Hence, one could interpret that Krugman's opinions, these and others, are built on an emotional defense of the status quo: the central banks, payment intermediaries such as Visa or MasterCard, and the State in general.

Virtual currencies are just a form of private money that uses Blockchain technology to record the transactions. But this technology can be easily built upon to address problems and gain efficiencies and effectiveness in multiple types of operations, so its potential uses across industries are boundless. Also, the transaction networks are comparatively safe, transparent, fast, and borderless. So economists who try to belittle and discredit their relevance on the grounds that these are concoctions of "quacks and cranks" (Skidelsky, 2018 [61]), tools for money laundering, crime, and tax evasion,

or a renewed version of old libertarian or bubble manias (Shiller, 2018), are simply wrong. For instance, it is easy to clear up two of the most common misconceptions:

CLAIM: Bitcoin's main use is laundering money and making payments for illegal trades.

REBUTTAL: Bitcoin's underlying technology is the blockchain: a ledger that keeps a permanent record of all transactions ever made since the beginning of its existence. This permanent record registers every holder (a bitcoin wallet) of each coin. So the records tie each bitcoin with one or more wallets. The wallets are handled from smartphones and computers so even though technically the bitcoins are not associated directly, nonetheless, they are associated indirectly with a person through the electronic device. Thus, illegal transactions can be spotted, cannot be erased, and can be tracked to a specific individual.

CLAIM: Bitcoin helps avoiding taxes.

REBUTTAL: As already said, every bitcoin transaction is permanently recorded and publicly accessible. Thus, the Internal Revenue Service (IRS) or any equivalent organization can track their movements and easily estimate any taxes due for any individual.

### **4. Ethics in social networks**

Unfortunately, current governance within the social networks does not help distinguish legitimate sources from others trying to piggyback on their work. And apparently, there is also a problem actively prosecuting people and companies who use the image and name of others to confuse and lie to the unsuspecting visitor. This is true at various levels: the private corporation having a direct responsibility over their networks and actions, as well as the government level having the authority and responsibility to ensure corporations can grow within the rule of law.

During a recently recorded conversation with Ryan X. Charles, Dr. Craig S. Wright provided one such case as an example [62]. The situation he relates, refers to a complaint he had placed on Twitter. The motive was to bring their attention to copyright breaches under the Digital Millennium Copyright Act [63], and asked the network to take action against people using copyrighted photos of himself. In response to his request, Twitter deplatformed Dr. Wright while, apparently, taking no action against those using the copyrighted images, which could be found posted at the network thereafter. But, Twitter is not alone. For instance, just as recently as January 26th. 2021, numerous accounts using Dr. Wright's picture and name could be found on Instagram.

In the Abstract of his January 2021 work "An exploration of ingroup behaviour and social psychology in developing socially abhorrent behaviours in social media and financial systems" Dr. Write summarizes the following related observations [64]:

*"The following paper provides a preliminary investigation into the growth of "Cryptocurrency" subgroups, the abuse of social media using automated systems, the enhancement of trolling and the ability for these activities to pose both a political and financial threat. Malicious actors have utilised technology to leverage existing psychological behaviours and create tribalistic responses that allow for the automated approach to controlling and manipulating individuals online. In this, authoritarian leaders can asymmetrically leverage sociological and psychological benefits that developed through evolutionary benefits but yet exhibit adverse effects in modern societies."*

and concludes [65]:

*"The ability for malicious actors to use anonymous social systems and technology has allowed for the creation of criminal groups that target political systems, financial systems and generally cause dilemmas that result in lost economic opportunities for* 

*many people and may even go as far as Social psychology causing personal harm. In providing access to a wide variety of platforms that can be tied to fake and manipulable sources such as those controlled in asymmetrical systems using bots, authoritarian and socially deviant actors can manipulate others to polarise and partisanise groups. These results may be seen in the false manipulation of Cryptocurrencies including Bitcoin through groups such as BTC Core and the introduction of specialist language for ingroups who believe not only that they will get rich, but they will gain in power and prestige. Consequently, the rise in new technologies that allow for the disassociation of the individuals' identity and the creation of methods that allow individuals to distance themselves from their activities must be investigated to regulate these systems".*

## **5. How can we judge what is ethically right?**

In his Tanner Lecture *Science and Revolutions* [66] Sagdeev states that "the intellectual community rarely has been the direct beneficiary of revolutions". In his words, this group "has played the role as a patient, the victim of change; and as a doctor, preparing and implementing the revolutionary processes [67]". The truth is that, even though Sagdeev is referring to other types of uprisings, Bitcoin and the Blockchain are providing a comparable revolutionary environment. This revolution too comes with a conflict of interest: on the one hand the political slogans, the power plays, the status quo, and those taking advantage of the confusing environment to loot for their own personal benefit, and on the other the intellectual drive to search for truth, rationality, and progress.

The attempt to use intellectual thinking to social political phenomena is, in Sagdeev's view, one reason why scientists become the "first revolutionaries, and often the first prisoners after the success or failure of revolutions [68]". As an example, he cites the time Einstein and a group of physicists became victims to the attacks of Soviet philosophers who demanded quantum mechanics be liberated from the: ""bourgeois" principle of uncertainty," and the theory of relativity be "liberated" from the dubious role played by imaginary observers [69]".

In those times, science was hostage to the "supreme wisdom" of communism as given in the form of proclamations by the classic manifestos of Marxism. And many of those incapable of undergoing the soul engineering process required to produce the "new Soviet man" or hiding successfully, were exterminated. Comparable events had been experienced at earlier revolutions, such as the one in France when Jean-Paul Marat demanded that chemistry in particular, be a "people-friendly science." This resulted in a general bloodshed including the beheading on the guillotine of the founder of chemistry: Antoine Lavoisier, whose ideas about the nature of chemistry differed from those Marat had.

Now, we live in different times. But still we can feel a serfdom, not subservient to a recognizable regime, but rather to a plethora of forces, −be some big corporations, be a number of governments, be the concept of the welfare state, be other sources of status quo power such as communication giants- that also try to mold at their convenience a type of "new modern man" and determine who is the worthy intellectual. Against these attacks, each person can chose to go the way of "internal emigration" and keep quiet, just as in the old Soviet Union, or face concerted efforts to end with one's prestige and reputation and maybe even ones' physical safety [70].

As things stand now-a-days, it does appear that our current "intelligentsia" will also need to split into at least two groups. In Spain for instance, the one who wants to progress, might be forced to be de facto "above their own national government" such as Shiller suggested [71], in search of a milieu where growth is not stopped. The reason is that in the agenda of the civil servants and politicians responsible for ensuring legislation catches up with the reality of the times, this is not a priority. However, Bitcoin

and blockchain-based innovations need a regulatory system that is flexible, clear, transparent, agile, and competent. And of course, that would require those regulating the environment understand the technology. One more reason the responsible agencies and business groups should clear the air as to what is true and what is not.

Obviously, when entrepreneurs cannot obtain the necessary licenses or the processes are delayed in such a way that their inventions become obsolete, or they suspect their fiscal obligations might not be clear, they are forced to rethink their situation. In Spain, he following is a list of some of the problems faced by managers wishing to organize these businesses according to the law [72]:


These are just some of the key problems confronted by digital-cash and blockchain entrepreneurs who want to set up their businesses within the Spanish territories. Much of the void can result from the government's belief in Bitcoin as a financial asset or financial instrument, rather than a communication protocol and therefore they continue to believe that Bitcoin is for speculation and for criminals When an environment is not legally and technically ready to receive innovations, the credibility of those set under that administration suffer. In the case of our example, the many relevant and significant inadequacies of the Spanish system force many local innovators to leave their country and set up their companies abroad, mainly in Switzerland, the UK, and the US. That is because these countries have managed to develop a more transparent and user friendly environment easing both the rate of company creation and the rate of technological transfer into their borders.

This situation raises legal and ethical problems for all involved but in addition, it also has strong financial consequences. However, often, in lieu of fixing the problem, governments such as the one in Spain try to stop the rate of development by creating a bureaucratic maze or by confining its development within organizations they control directly or indirectly. Once more, this situation brings to mind the environment in the Soviet Russia where most scientific development was scheduled by the political authority and supported by work on contracts or grants.

#### **6. The honest truthful asset**

In the first part of his 1986 Lecture titled *How Is Legitimacy Possible On The Basis Of Legality?* [73], Jürgen Habermas questioned whether "legitimacy" is possible on the basis of "legality". And to highlight the conflict and incongruity hidden within

#### *Bitcoin and Ethics in a Technological Society DOI: http://dx.doi.org/10.5772/intechopen.96798*

this statement, he used Max Weber's vision of Western political systems as forms of "legal domination [74]." The point being that the legitimacy of these political systems resides on the belief in the "legality" of their exercise of political power versus, say, that of the "tradition".

In current modern democratic societies, the acceptance of such a premise may create contentions that cannot be resolved within the existing political structures. The reason is the conflicts of interests inherent to such systems. For instance, the most important objective of a political party in a democratic system is to be reelected. And, to achieve this end, politicians will often use public assets, such as public mass media communications, as if these were their own. Given that all political parties share the same interests and thus will benefit from these actions, checks and balances may be removed so each of them can take turns at abusing the system. Furthermore, given that the underlying infrastructure of the "welfare state" consists in taking wealth from some sectors of society, using a part of these to support the apparatus, and redistributing the remainder among other groups expected to became the captive electorate of the parties in power, we can already see situations when the rights and property of first are threaten to benefit the latter.

On October 2015, acting as the moderator of an "All-Star Panel" during a Bitcoin Investor Conference at Las Vegas, Michele Seven asked about the nature of property rights [75]. The first to answer, Dr. Craig Wright [76], highlighted:

" [] We need to be able to control our own freedoms and the only way to do that is to basically have the right to property, to ownership [] That means being able to dispose of property as we want, to be able to share it, to take it -- and that is what it is all about. Once we get things to where we have redeemable contracts and we link them to the blockchain, where we can link money, and goods, digital rights, and ownership into something that can't be changed: a fundamental open, honest, truthful asset - the blockchain, that's when we are going to see real freedom in the world."

With respect to the same question, Joseph Vaughn Perling [77] reminded the audience that currently one relies on government ledgers to keep property records which tell us who owns what, and that such system is unreliable and expensive as it is financed through taxes. Nonetheless, with the new technology, all these costs can potentially be reduced as property records get stored in the ledgers of Bitcoin. Then, reflecting on the potential future conflict of interests between society and power centers, Joseph Vaughn Perling [78] added that there may come a time when:

*"the separation between the honest politician and the dishonest one will come down to whether or not they support the use of Bitcoin for government function because it does provide that audibility and the anti-corruption tools that it can implement throughout. Government can make government become provably honest in a way that's never before been possible and provably honest government is something we have never seen" [] so that it may create that division between the people: the people within government that become more electable because they can prove the degree to which they are honest, versus the those who are competing for their office."*

The use of blockchain to secure a more transparent political arena will be an interesting development particularly in light of the practice of "legal domination" by which the rationality that the law possesses, is independent of morality. Nowa-days it is impossible to imagine a society where citizens do not demand that it is the moral argumentation that gets institutionalized by means of legal procedures. And this expectation will need to materialize results over all aspects of government including those that impact science.

Baumol (2002 [79]) stated that "*virtually all of the economic growth that has occurred since the eighteenth century is ultimately attributable to innovation*." Given that the blockchain is thought of as, probably, the most auspicious innovation since the coming of the internet, this invention is prophesied deliver huge financial benefits. These will result from the economic repercussions of its incorporation into processes to streamline and secure decentralized transactions in countless sectors across the world. The blockchain is specially relevant to situations when ownership histories are of essence such as in the pharmaceutical industry, land registries, real estate property, piracy and copyright matters, as well as of public services, such as health assistance and welfare payments (Tapscott et al., 2016 [80, 81]). In the limit of this innovation are self-executing contracts that can run with the assistance of AI and minimal human intervention. The use of the blockchain will provide increased efficiencies and more cost-effective solutions to current predicaments. And as the older technology is replaced, the blockchain will reduce fraud increasing trust and security, and it will improve the transparency of multi-party transactions.

Given all of these, one would expect public institutions would align to welcome and assist to facilitate the said developments. However, in the current atmosphere of political and economic deterioration, where political and status quo agendas control the rate of development, the scientific community and the entrepreneurs who are willing to finance these are at a loose in a rather hostile psychological climate.

### **7. Restoring trust, transparency and efficiency in government with a publicly scaled blockchain**

In a letter to W. T. Barry, on August 4th 1822, James Madison [82] stated:

*"A popular Government, without popular information, or the means of acquiring it, is but a prologue to a Farce or a Tragedy; or perhaps both. Knowledge will forever govern ignorance: and a people who mean to be their own Governors, must arm themselves with the power which knowledge gives."*

Transparency and accountability are of the two most essential principles in a free and democratic society. They are a bridge between an informed citizenry making confident electoral decisions or the widespread distrust of 'a self-serving, arbitrary, corrupt institution'. Furthermore, transparency and accountability are ever so more important as corruption keeps eroding the legitimacy and credibility of democratic governments worldwide. According to Pew Research Center, in the US public distrust of the government and elected officials has eroded to reach all-time lows [83]. This has been highlighted with the rise of civil unrest, violent protests, and frequent demonstrations against government policies, politicians, and media organizations [84, 85]. The erosion of public trust in government and news media can be attributed to numerous factors, many of which relate to the honesty, openness, and confidence, or lack thereof, in the information that is disseminated.

In 2011, the US launched a comprehensive digital government strategy aimed at building a 21st century digital government [86]. The Executive Order highlights:

*"Government managers must learn from what is working in the private sector and apply these best practices to deliver services better, faster, and at lower cost. Such best practices include increasingly popular lower-cost, self-service options accessed by the Internet or mobile phone and improved processes that deliver services faster and more responsively, reducing the overall need for customer inquiries and complaints. The Federal Government has a responsibility to streamline and make more efficient its service delivery to better serve the public."*

#### *Bitcoin and Ethics in a Technological Society DOI: http://dx.doi.org/10.5772/intechopen.96798*

However, ten years later we can still find proof of the Government's slow response to technological shifts. For instance, on December 2020, the Cyber-Security and Infrastructure Agency revealed that a yearlong hack had affected US private firms, government agencies, and critical infrastructure entities [87]. These included: the US Treasury, Department of Homeland Security, Department of State, Department of Defense, Department of Commerce, National Institute of Health, Center for Disease Control and Prevention, and the Justice Department among countless others. In total, it is estimated that 18,000 entities fell victim to the Russian hack. This relatively unknown hack is expected to cost American businesses and taxpayers over \$100 billion dollars [88]. These types of attacks targeting the common citizen are so frequent that the ethical aspects of these actions blur against all the other consequences of these scandalous activities which ten-fold with time.

#### **7.1 Building trust with bitcoin: now is the time for a blockchain reformation**

Similar to the transformative nature of the internet, a public blockchain has the ability to revolutionize government processes by providing greater transparency and auditability as well as a super-efficient "Universal Source of Truth" data management platform that can be used to restore trust, authenticate data, and significantly reduce costs. This has become true after the publication of the 2008 Bitcoin Whitepaper by Satoshi Nakamoto which presented solutions to long-standing issues such as the scaling obstacles among other [89].

Bitcoin was designed to be the foundation for an open and honest system, one that is public, has a series of checks and balances, as well as an incentive for participation based on Proof-of-Work. On the Bitcoin network, every transaction is recorded on a public ledger maintained by a small-world network of specialized distributed nodes called transaction processors. As transactions are broadcasted, processors gather, validate, timestamp, and add each transaction as it is received in a series of hash-based, agreed upon chain of events, secured in blocks of immutable information.

As explained earlier, contrary to much of the popular belief, Bitcoin offers more than just a transfer or store of financial value. Bitcoin establishes a Universal Source of Truth, where information can be stored, validated, shared, protected, and authenticated. This can be used in conjunction with traditional systems or new hybrid options utilizing cloud to chain solutions. Not all data has to be stored on chain, but rather information can be authenticated simply by hashing it in the cloud and storing a copy of that hash on-chain. This would ensure that the data stored in the cloud, or elsewhere, could be simply authenticated to confirm it has not been changed.

Restoring the Bitcoin original protocol by removing the real centralization bottleneck, has allowed true innovation and unbounded on-chain scaling to occur. On May of 2020, the Bitcoin SV blockchain processed a world-record size block of 369 Mb which contained 1.3 million transactions. In fact, the network has already eclipsed almost 4,000 transactions per second (tps) and is expected to reach 50,000 tps later this year. Through scaling comes cost efficiency and Satoshi's vision remains unmatched in its ability to transfer micro – even nano-transactions with a median transaction fee of 1/100th of a U.S. cent. With safe, instant, low fee transactions of Bitcoin SV, government organizations can significantly reduce costs associated with financial and data transactions. These savings may be compounded by a reduction in the associated costs with auditing, cybersecurity, and networking hardware.

#### **7.2 Bitcoin can help governments restore transparency and trust today**

Bitcoin SV stands ready to fulfill the promises of an era of blockchain reformation by providing complete transparency and efficiency to the public sector. Although government entities would only need to begin with a common Request for Information, traditionally, the procurement stage has long been considered one of the greatest barriers to connecting government technology needs with vendors who are able to integrate the latest emerging technologies [90]. The consequence is that many small firms and industry outsiders are shut out entirely from participating due to how complex, time consuming and costly the process can be. In contrast, a myriad of transformative blockchain solutions await to contribute to a more ethical society by improving transparency and restoring trust. Some of these are:

**Financial Transaction Management** – As a distributed ledger, Bitcoin offers an accounting of valid transactions that occur within the network instantaneously. For a small transaction fee (.00011 per byte), transaction processors will record an entry onto the secure ledger. Compared to the cost of modern transaction management systems, Bitcoin offers unmatched savings, auditability, security, and interoperability with the integration of smart contracts and tokens. *Example:* **Tokenized** [91]

**Regulatory Compliance** – As transactions are validated and publicly recorded to the Bitcoin blockchain, they are secured by an immutable Proof-of-Work. This allows regulators, news media and government watch-groups real-time access to compliance-related data that can be shared and trusted. In return, this eases the burden of reporting and auditing on government agencies, reducing cost and improving transparency. Smart contracts for government procurement opportunities would ensure compliance, fairness and improve the overall speed of implementation. *Example*: **nChain** [92]

**Identity Management** - Unlike centralized government databases, Bitcoin provides a much more secure distributed data management platform that could empower citizens with the ability to easily sign and authenticate their identity for official government documents or benefits. This would also reduce the time and resources needed by the government to verify identities and protect sensitive data – especially across restrictive inter-agency data silos. *Example:* **Legally Chained** [93]

**Registries** – The ability to manage any type of record or registry through Bitcoin's unique data management network removes the overall complexity for governments to manage and authenticate data efficiently. This would remove the friction of processing land titles, company registrations as well as every other type of record including birth, marriage, divorce, criminal or death. The ledger would serve an honest, universal source of truth that can drastically reduce fraud and corruption. Example: **Elas Digital** [94]

**Blockchain Voting** – As we saw during the 2020 US Presidential election cycle, it is important for citizens to believe in the integrity of the voting process. Doubt in returned results, whether due to error, fraud, hacking, corruption, or lack of transparency can create an atmosphere of distrust among voters. Bitcoin's tamper-proof public ledger is perfectly suited to eliminate election fraud in the future – when combined with an identity-based token, a voter could easily cast their vote using any type of device removing barriers and increasing participation. Example: **Layer2 Technologies (B-vote)** [95]

**Supply Chain Traceability** – The Coronavirus pandemic has demonstrated to all how fragile our global supply chain can be during a disruption. Government agencies competed to locate, purchase, and distribute medical gear, supplies and personal protective equipment. This created panic among the populace as medical care was either denied, delayed, or compromised through the reuse of protective gear. The lack of traceability of the supply chain continues to plague COVID-19

#### *Bitcoin and Ethics in a Technological Society DOI: http://dx.doi.org/10.5772/intechopen.96798*

relief. As traditional government vendors begin developing vaccine distribution and contract tracing technologies, many citizens are concerned about how their personal medical data will be stored and used in the future. Bitcoin solves these issues by improving trust and privacy among parties that need to share valuable data across an entire value chain. Example: **UNISOT** [96]**, VXPass** [97].

