Could a Blockchain Based Reputation System Prevent a Dystopian Future?

An influencer today, a pauper tomorrow. You shouldn’t take your online reputation for granted. It is only borrowed.

Unless you’re Donald Trump or Joan Jett, chances are you actually do give a damn “bout’ your reputation”. We all do. In fact, it’s in our DNA. The very survival of our tribal hunter-gatherer societies relied on reputation. One of the major reasons languages were invented was to enable us to gossip:

“See that guy over there? He and another dude were out hunting when this giant sabretooth tiger jumped them and you know what that coward did? Ran away!”

A person’s whole life depended back then on what was rumored about them, on whether they were perceived by the others as courageous or rather cowardly. At the same time, it’s the gossip again that paved the way for tribes to cooperate, survive and evolve into the stable societies we thrive in today.

Reputation Isn’t What It Used To Be

With the accelerated globalization and digital nomadism of the 21st century, personal reputation has certainly lost its social sway. We have no single universal reputation score that is tethered to our online identity. Instead, we are able to have multiple identities with different reputations on various platforms and in all kinds of online communities that don’t really talk to each other or exchange data.

If we manage to screw up our reputation on one platform or in one community, it likely won’t harm us elsewhere. There’s nothing stopping us from simply erasing our profile and creating a new one with a fresh email address or phone number, thus effectively resetting our negative reputation score to neutral in a matter of minutes. The most it will cost us is some extra time and effort. A fair price to pay for completely reinventing yourself, isn’t it?

Such leniency in reputation-building can be a double-edged sword, however. On the one hand, it allows people to enjoy their online freedom and get digitally “reborn”. “To err is human” as they say and we should be able to evolve and to change on the internet, as well as in life.

On the other hand, such an uncontrolled environment means that any reputation system can be rendered useless by bots and fake accounts. Social media feeds are the main source of information for most of us and it is quite scary to grasp that not a single account is exempt from hacking or manipulating, and thus no one is trustworthy.

As Ursula Le Guin said: “Words are events, they do things, change things. They transform both speaker and hearer; they feed energy back and forth and amplify it.”

As we already witnessed, fake news and trolling are proven to be capable of overthrowing whole societies and political systems.

Fake It Till You Make It

Ebay, Amazon, Fiverr, Yelp and even social media platforms such as Twitter and Instagram are often the target of malicious users or competitors that attempt to alter and distort real reputation value. Multiple instances of falsified and manipulated reputation ratings are causing e-commerce platforms and service marketplace users to doubt the veracity of existing online reputation systems. Large amounts of followers or likes are also easily manipulated nowadays.

This egg has more “reputation” than you. Feel sad. Don’t follow it.

Remember the ongoing probe into Russian meddling into the last US elections. Controlling public opinion through armies of bots and trolls is not science fiction. It is happening today.

Google it.

All trust in those systems is irreparably damaged. This leads to companies losing the very incentive to provide high-quality products or services in order to cultivate legitimate reputation scores. The same goes for public figures in social media. They can just buy reputation. Everyone is doing it anyway! It is even more cost-effective for businesses to buy fake ratings or to deploy bots that will keep their reputation, at least at first glance, healthy and their brand trustworthy. According to new research, US brands lose an estimated $200m USD every year to fake social media accounts, claiming to be influencers. In 2017 the social media spendings amounted to $2.1b USD and 11% of the profiting accounts were illegitimate. In this situation:

Centralized reputation systems essentially become redundant, despite the best efforts of platform operators to manually discover false ratings and accounts.

Throw It On The Blockchain

Unsurprisingly, when it comes to matters of trust on the internet, it’s usually an opportunity for blockchain to step into the spotlight. Blockchains could indeed offer specific advantages over traditional reputation tracking systems that are hosted in a private database.

Imagine that you are a freelancer that provides services to hundreds of clients and has, throughout the years, developed a reputation as a serious professional on a certain platform. The more reputation you gain on the platform, the more dependent you are on its existence and the whims of its operators (and those above them). If the freelance platform goes away for any reason, your hard earned reputation will go with it. Moreover, you are also completely dependent on the platform’s policies, which change frequently. If the owner of the private database that stores your reputation decides so, they can completely erase your profile together with the hard-earned trust you have generated.

These private databases are a single point of failure for you. Public blockchains are created to address the shortcomings of centralized trust depositories.

The case is identical for social media platforms. The so-called “influencers” that are rewarded by various companies to promote their products are completely dependent on the platforms they operate on. Go against their policies, intentionally or not, and you lose your “digital standing”.

You don’t see much of this guy anymore, do you?

Recently “Infowars”, the brand of U.S. conspiracy theorist Alex Jones, was removed from Facebook, YouTube, Spotify, Twitter, and Apple. The show was found to violate the behavior policies of the services. PayPal also cut its ties with the show a bit later, removing an important source of revenue for Alex Jones. All of these services have supported the show for years. In the words of Daniel Kreiss, a professor at the school of media and journalism at the University of North Carolina at Chapel Hill:

This has potentially a massive effect on the reach of Infowars and the political power of Alex Jones. This significantly limits Infowars’ visibility in the public sphere. [Source]

Without commenting on the quality of the content that Alex Jones produced, this case reminded everyone that we are all “tolerated” by the third parties whose platforms we use.

Our reputation is completely owned by third parties.

Blockchain platforms, especially interoperable ones, could change this. At the very least, they provide a new kind of infrastructure on which new types of reputation systems can be developed. Infrastructure that is not owned by a single entity, that is immutable, transparent and that is based on crypto economic incentives. This provides for an excellent foundation of new types of reputation systems — those natively owned and controlled by the users.

Decentralizing reputation tracking removes the possibility of websites that are hosting reputation-sensitive content to delete, inflate or deflate reputation scores in order to serve their own interests. The public nature of [most] blockchains allows any user to determine the origin of another user’s reputation by following all public transfers (transactions) that created the reputation. This transparency enables users to make informed decisions about, say, a manufacturer of a product, a provider of a service or an author of a review. Of course, as in all cases, it is a matter of setting up the rules of the system and aligning the incentives of all users that will use it. This requires R&D and that is precisely what blockchains are about.

Much of the value generated in the token sales explosion will go to precisely this kind or research — creating sustainable systems for healthier human interactions.

Outside Influence

Reputation systems, depending on the way they are designed, may or may not exist on the blockchain (on-chain). If they are developed to function on-chain — all interactions, for example upvoting, following, liking, sharing, etc will be recorded in the blockchain and will become fully traceable. This, however, will require more scalable blockchain systems.

Accommodating scalability at the expense of decentralization is what some of the next-generation blockchain platforms have decided is the best way forward. They will fail. We already have scalable platforms — the sole owners of our reputation.

What we need is reputation systems built on scalable, open-source, decentralized, censorship-resistant infrastructure. There is no innovation in “microwaved ideas”.

How about the reputation systems that operate partially off-chain? Can reputation scores be updated on the blockchain when they are generated by off-chain sources? Yes, this is possible with the so-called oracles. Oracles are data provider mechanisms that can be implemented as off-chain entities connected to a blockchain node. Oracles could be users (or machines) that perform various actions from verifying that some piece of data is correct and that an event has happened in the real world, to answering specific questions, performing various actions and settling disputes. They can listen to query transactions on-chain, fetch answers from the real world and post them back to the blockchain. Oracle providers add an important function to blockchain platforms and could play an important role in the creation of a reputation system.

Blockchain OraclesOracles are essential for the realization of the blockchain-based sharing economy. blog.aeternity.com

Using blockchain technology, oracles can be registered with the blockchain to answer queries directed at them. Users or smart contracts pay to ask an oracle for, say, someone’s current reputation score, and then the fee (paid in tokens) compensates the oracles for their effort in interfacing with the outside world.

Augur

There is already one oracle-enabled reputation system working on a blockchain. It belongs to Augur, the trustless, decentralized oracle and predictions platform. The Reputation token (REP) is Augur’s native token. Users stake their REP tokens when choosing the outcomes of predictions and, in return, receive settlement fees from the market. The REP token holders who “report” on a market (by staking their REP on one of the market’s possible outcomes) are called reporters.

Augur’s reputation system is designed to ensure that honest, accurate reporting of outcomes is always the most profitable option for reporters.

The Augur oracle allows information to be migrated from the real world to a blockchain without relying on a trusted intermediary.

ChainLink

Another interesting example of a reputation system on the blockchain is ChainLink, a decentralized oracle service that takes information that is external to blockchain applications and puts it on-chain. It records and publishes user ratings of oracle providers and nodes, offering a means for users to evaluate oracle performance holistically. The creators of ChainLink envision a reputation system that includes a basic on-chain component where users’ ratings would be available for smart contracts to reference and will also be easily accessible off-chain where larger amounts of data can be efficiently processed and more flexibly weighted. In their own words:

High-reputation services are strongly incentivized in any market to behave correctly and ensure high availability and performance. Negative user feedback will pose a significant risk to brand value, as do the penalties associated with misbehavior. Consequently, we anticipate a virtuous circle in which well-functioning oracles develop good reputations and good reputations give rise to incentives for continued high performance.

Tokenizing Reputation

DREP

There’s an interesting blockchain project that is trying to solve how decentralized reputation works. It’s called DREP. The DREP team is developing a technology layer that quantifies, monetizes and aggregates reputation value of users across different platforms, including e-commerce, gaming, content, social networking platforms. One of their developers explains:

A user’s reputation value is calculated based on the desirability of their behavior on a platform using DREP’s existing reputation calculation algorithm templates, which are also customizable to platforms’ preferences. Platform tokens are then awarded to the user; tokens awarded have a positive correlation to reputation value. This is how DREP Foundation tokenizes online reputation: tokens awarded increase with reputation value, an indicator of frequency and quality of positive behavior on the platform.

Confused? Learn how it DREP works in detail here.

Since each reputation value of a merchant or a vendor is recorded by the transfer of a token, the ratings of vendors cannot be manipulated or inflated without spending large amounts of capital and resources. Attempts to create fake accounts, orders, and sales are detected by DREP Foundation’s Fake Account Identification Solution, assisting users in spotting vendors with malicious intent and preventing users from obtaining products or services from merchants with illegitimate reputation.

A solution to the fragmentation of digital communities and the polarisation of digital identities across platforms, a universal immutable, public ledger (or interoperable ledgers) offers a verifiable, single reference point for reputation.

All of this may sound great to some and it seems like decentralized reputation will actually solve a pressing online problem, but are there any drawbacks?

Are We Getting Closer to a Digital Dictatorship?

To answer this question, one need not look much further than the social credit score currently being implemented in China. Possibly the largest social engineering project in modern history, this reputation system is being built by several Chinese tech companies in partnership with the communist government. This nationwide credit scoring system is, in fact, the perfect way for Chinese elites to exert control over 1.4 billion people. Millions of surveillance cameras will use artificial intelligence and facial recognition software to add or subtract social points according to the physical and digital behavior of each individual citizen. This real-world data will then be aggregated with information collected from individuals’ government records, medical, financial, and internet browsing histories and distilled down to a single number, a personal credit reputation score. This number can oscillate in real time from good to bad, depending on the person’s behavior and on the reputation scores of people that person associates with. It is easy to predict how the Chinese government could use these reputation scores to justify the blacklisting of citizens it deems “disruptive” to society.

The system is completely centralized of course.

This was supposed to be fiction…

Like an episode of Black Mirror, a universal reputation scale intersecting numerous digital communities, while addressing the bot epidemic, leaves no room for human error or the ability to press the delete button and start from scratch.

Monitored from every angle, now more than ever, our digital activity poses an ever-increasing threat to our reputation.

Government involvement and the monopolization of our information by tech giants threaten to take full control of both our public and private digital space. Actually, currently, there is no “private digital space”.

Well, it can’t happen in the west, can it?

What if the nightmare dystopian scenario that is about to occur in China could also be happening in the west right now, albeit in a different guise? What is Facebook but an enormous database of 3+ billion users’ private information and social activities? How much does Google or Apple already know about your daily routine just from your smartphone? Are your private data and online reputation going to be sold to the highest bidder? What if the highest bidder is your own government?

Isn’t this the part where blockchain swoops in to save the day? In theory, yes.

The new kind of infrastructure that is being built must take all the above considerations into account. It must be created with the goal to be resilient to precisely such attacks. Now is the time to assess our digital behavior and ensure that our communities, identities, and reputation are not owned by the highest bidder.

Crucially, we must ensure that we are not unwittingly building the infrastructure that could eventually imprison us.

Blockchain technology will be misused much like any other powerful tool. However, we need to make sure that resilient alternatives are always available. The open, public blockchain is a good hedge against a single point of control, but how long can it stand its ground against the governments and giant corporations? It is far too early to provide a definite answer here. The great thing is, however, that we have been shown the way forward.

If 2018 has taught us anything, it is that we must not only embrace but fight for a decentralized reputation barometer. Open blockchain offers the rare opportunity to take back control from centralized authorities. We should endeavor to take this chance and remedy the flaws of centralized control rather than staying the course to a dystopian future.

Get interested in blockchains! Your reputation is at stake!

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This piece was prepared in collaboration with George Koynov