Jan 18, 2019

Blockchain: 6 Key Ethical Considerations

Posted by in categories: bitcoin, computing, cryptocurrencies, cybercrime/malcode, disruptive technology, employment, ethics, hacking, information science

Blockchain shows major potential to drive positive change across a wide range of industries. Like any disruptive technology, there are ethical considerations that must be identified, discussed, and mitigated as we adopt and apply this technology, so that we can maximize the positive benefits, and minimize the negative side effects.

Own Your Data

For decades we have sought the ability for data subjects to own and control their data. Sadly, with massive proliferation of centralized database silos and the sensitive personal information they contain, we have fallen far short of data subjects having access to, let alone owning or controlling their data. Blockchain has the potential to enable data subjects to access their data, review and amend it, see reports of who else has accessed it, give consent or opt-in / opt-out of data sharing, and even request they be forgotten and their information be deleted.

Monetize Your Data

Blockchain enables cryptocurrency. Think of blockchain as a platform, and a cryptocurrency as a particular application that can run on blockchain, along with many other applications such as those that can enable data subjects to control their data. Users can be rewarded with cryptocurrencies for opting into, or giving consent to collaborate and share their data. For example, a patient may opt into participation in a clinical trial, and in so doing make their data available for research within that clinical trial. This capability has the potential to provide a direct value feedback loop whereby data subjects can monetize their data. This is a huge leap forward from today where data subjects give up their data free, in many cases unaware, and organizations collecting it make highly profitable businesses out of monetizing data with nary a cent going back to the data subject. However, in enabling data subjects to own, control, and monetize their data guardrails must be put in place around this to ensure that data subjects are fully informed of not just monetization opportunities, but also how their data will be used, any risks, and their rights.

Disintermediation and Disruption

Historically collaboration across a group of organizations has required a central trusted intermediary in a “hub and spoke” architecture where the intermediary is at the center and mediates all interactions across the network. One can see examples of this across many industries. In financial services we have banks and banking networks. In healthcare we have clearinghouses and health information exchanges. In most industries we have supply chains where distributors are the hub connecting manufacturers and suppliers with dispensaries and retailers. Unfortunately, many intermediaries have abused their role and introduced excessive costs, delays, and single points of failure where if they are unavailable collaboration across the whole network is halted. To be clear, where physical goods flow, such as in supply chains, centralized hub and spoke architectures will endure. However, when it comes to the flow of digital goods, including any information, cryptocurrencies, crypto-tokens, or otherwise, blockchain has the potential to enable decentralized collaboration across a consortium of organizations in near real-time, and without the added cost, and delay of the intermediary. Since blockchain is decentralized, it eliminates the central single point of failure that makes hub and spoke architectures vulnerable to attacks on the availability of data or systems such as ransomware or DDoS (Distributed Denial of Service). However, with this disintermediation and disruption the common assertion is that many will lose their jobs. Actually, with blockchain there is a different role for an intermediary around training, system integration, support, governance, consensus building across the consortium, and so forth, so there is an opportunity for intermediaries of today to evolve, adapt to blockchain, and even leverage blockchain to their benefit.

Hyper-Efficiency and Job Loss

Today many common types data are maintained redundantly across silos. Think of the last time you changed your phone number or address and had to visit hundreds of websites to update it. Did you visit them all? Probably not (who has time), and so many of the copies of your data are old, inaccurate, etc. This system results in massive collective cost and causes major inefficiencies. Rather than maintain common data in one place,
and update it once as needed, and share it near real-time across the consortium of organizations that need it, the cost to maintain common data is multiplied by the number of organizations that have copies and maintain it independently. Further, inconsistencies in this data cause friction and additional cost in the system, and frustration. If your address is not updated mail goes to the wrong place, needs to be forwarded, or maybe you didn’t do forwarding and so you lose it and absorb whatever the impact. In healthcare if records are inconsistent across payers and providers, medical claims can bounce causing delays in payment and so forth. So blockchain having the potential to help solve this sounds good, right? Well, what about the millions of people whose job it is today to maintain redundant copies of information across these organizations and silos. In using blockchain to pave the way for secure, and hyper-efficient maintenance of common, shared data, we may inadvertently disrupt the jobs of millions of people doing mundane, redundant data maintenance today. This is not to say we should not move forward with blockchain and realize its benefits, but we should do so fully aware of the impacts and help those impacted proactively adjust, retrain and move onto more useful, interesting, and higher paying roles.

Environmental Impacts

Public blockchains such as bitcoin span untrusted networks, with untrusted participants, and so must use conservative consensus algorithms such as PoW (Proof of Work) which require mining. To be competitive in mining one must invest in massive amounts of hardware that use massive amounts of electric power. This is a considerable environmental and ethical concern. For public blockchains to be feasible going forward we must find new ways of enabling blockchain consensus in ways that do not require massive amounts of hardware or electric power. Key clarification: this challenge is associated with mining and public blockchains and the consensus algorithms they use, whereas private / consortium blockchains, which represent the vast majority of blockchains used in industries such as healthcare, don’t typically have mining, but rather validation of transactions and blocks which does not require any significant additional hardware or electricity. Therefore, while this is a challenge for public blockchain applications such as bitcoin, it is not an issue for private / consortium blockchains.

Anonymity, Cryptocurrencies, and Crime

Ransomware is enabled by anonymous payment methods such as bitcoin. An attacker can infect your system, encrypt your data, and demand payment in bitcoin, and you can pay them with nary an idea of who attacked you, nor the ability for you or law enforcement to identify them. While cryptocurrencies and crypto-tokens have incredible potential for good, they are in this respect a double edged sword since they also pave the way not only for ransomware attacks, but DDoS, any many other types of crime. On the other hand, blockchain has incredible potential to help mitigate many types of fraud related crime so blockchain and crime is a multi-faceted ethical consideration. For more on this see Blockchain as a tool for anti-fraud.

What other ethical considerations are you seeing with blockchain? I post regularly on blockchain, cybersecurity, privacy, compliance, AI, cloud, and healthcare on LinkedIn and Twitter, and welcome collaboration on these fast evolving fields. Reach out and connect to collaborate.


  1. Blockchain CyberSecurity – What You Need to Know to Avoid a Breach
  2. 8 Opportunities to Advance AI in Healthcare Using Blockchain
  3. Food is Medicine – Will the first large scale production use of blockchain in healthcare be food supply chain?
  4. Blockchain as a Tool for Anti-Fraud
  5. Healthcare Blockchain Privacy
  6. Accelerating AI and ML in Healthcare Using Blockchain
  7. Blockchain in Healthcare: The Potential and Limitations
  8. Blockchain in Healthcare Webinar: Patient Privacy & Cybersecurity in DLT Architecture, Planning, & Adoption
  9. BlockRx Asks the Experts: David Houlding, Intel Health & Life Sciences
  10. Will Blockchains Deliver Healthcare Interoperability?
  11. Blockchain, Cryptocurrencies, Smart Contracts, Artificial Intelligence, and Machine Learning in Healthcare
  12. Healthcare Use Cases for Blockchain — 5 Key Factors for Success
  13. Healthcare Blockchain: What Goes On Chain Stays on Chain
  14. Healthcare Blockchain: Does Your Chain Have any Weak Links?
  15. Will Your Healthcare Blockchain be Available When you Need It?

Comment — comments are now closed.

  1. Rochelle says:

    Hi David,

    I read your post, and am appreciating how you framed out your thinking and these issues. I think you define a number of the issues well, (privacy, power dynamics, efficiencies) give good illustrations and analogies (hub and spoke), and your pragmatic orientation felt very grounding to read.
    I hadn’t thought of the consortium approach to private blockchains, and am really glad to for the extra details here after hearing you speak about it at J-Lab. And I agree heartily to guardrails about risks and rights to how subjects’ data is used!

    Some thoughts that occurred to me while reading your piece, for what they’re worth:

    I agree that selling ones data and being remunerated for it in some way is an improvement over ones data being taken without remuneration — for sure. My concern is that a consequence of this is that for those with a certain level of disposable income, privacy is a choice in the sense that the fallout from choosing not to sell it is nearly nothing. Meanwhile below a certain income, a consequence of not selling one’s data could well mean not being able to feed oneself or worse, one’s children. By contrast, if the lived consequences of a choice are relatively equal for everyone, I would consider that to be more of a true choice. When the same choice results in major hardship for one person, and nearly no difference in life-standard to another person, that feels like it falls short of the ideal of freedom of choice, particularly when the consequences weigh much harder on poorer folk – that raises a flag for me that there’s probably room for deeper design work.

    Who is included and excluded in decisions that effect large swaths of humanity, who decides who’s included, are questions I’ve been grappling with lately. My sense is that there is more intelligence in the collective than we mostly know how to access and make coherent sense of, though there is interesting experimentation going on in this area (S-Labs and theory U out of MIT, for eg). I sense one of the challenges of diverse inclusion is making a coherent space out of which collective intelligence might emerge. It is fairly standard that a struggle for dominating the narrative is the result when diverse groups get together without adequate context setting and facilitation that can handle emergence and cohere collective intelligence.

    This is a long reply – if you’re still reading, thank you for hanging in!

    One more thought ramble in response to the increased efficiencies of private blockchains:

    I thought your explanation of how blockchains can serve a consortium by reducing the cost of keeping records up to date, since the record is updated for everyone nearly simultaneously, was really strong. And I appreciate having this spelled out, and the pragmatic efficiency of it feels liberating.
    I was thrilled that you also forecast that job-losses for redundant record-keeping labour could also result from this efficiency. It shows a kind of clear-headed systemic thinking and willingness to look for problems that a proposed solution might inadvertently cause – ie, unemployment. The other piece of this from an ethical standpoint is who decides who benefits, and how much, from these cost savings?
    These kinds of governance decisions, as well as laws such as fiduciary duty to shareholders, seem to me to be ground zero for whether we interrupt the extract, abstract, accumulate systems that reduce sustainability and anti-fragility, or forge something inconceivably new in the heat of this convergeance. (I’m borrowing from on this)
    And, thank you for pointing out how ransom can be collected from crypto. I know some adherents who praise crypto for it’s safety, and appreciate the ballast your example provided.

    I’ll end on what intrigues me about our current moment are the emerging experiments to create environments that allow for de-siloing, and for emergent collective intelligence to become more of a reality. Often the ‘other’ (other sub-cultures, other fields of expertise, other people of whatever stripe) provokes a kind of psychological immune system response. How to lower the psychological immune reaction of a sub-culture enough so it can actually be shaped by a plurality of perspectives – and have coherent, co-ordinated forward motion result — is something that interests me. Experiments like S-Lab (MIT), Robert Kegan’s work (Harvard), and what my own organization is doing with our annual ParTecK, for example, I feel are ripe for growing the new ways of participating in human evolution that current crisis and problems demand of us humans.

    Alas, I reckon now I’ve said more than enough – at risk of being thorough I may have over-indulged your listening / receiving generosity! Thank you for receiving my impressions and thoughts to any extent you have, may some being somewhere be served by our exchange : )