Could a blockchain be used to promote more ethical consumption?

Hi all,

I’m following a blockchain class and this idea came to my mind. Could a blockchain be used to encourage buyers to choose better merchants? Many people I know buy from online shops like Amazon only because it’s handier, without thinking about how their choices affect small economies. I read of many town shops and even big shopping malls that closed because of Amazon.

There’s nothing wrong with choosing the merchant that better fits your needs. I’m not criticism big e-commerce companies, but rather I’m thinking about a way to enable many small merchants to compete against very few giant e-commerce corporations.

The idea that came to my mind is this blockchain cryptocurrency that rewards customers for buying from local shops or small e-commerce merchants. The emission of new coins is granted as a prize for such transactions and the judgment on whether a particular transaction is ethical or not is left to the network, through the classical vote mechanism.

The way I imagine the voting system is that each user holds two lists: a white list (good merchants) and a black list (bad merchants). These lists are saved within the node and when a transaction to be validated comes, the node will look into these lists. Of course, the user won’t have in their lists all the merchants in the world. So a default behavior could be defied by each user. For instance, they might set to accept as good merchant each merchant from where they have already purchased something. Or set an always good or always bad default rule.

In standard consensus-based blockchains, you need to reach at least 50% + 1 of votes for the transaction to be approved. You might not get so many votes and of course, the system must always allow you to complete a transaction. To solve this issue I think the prize could be proportional to the number of votes. More people voting for a merchant means a higher reward. If none or very few are voting then the buyer won’t receive any new coin.

This system would be completely decentralized so the judgment would be left entirely to the network, with no central interference. In this way, the user could find more convenient buying from a local store, which might offer less ease but would grant a high cashback.

The small merchants could promote this cryptocurrency as a way to compete against big corporations, for instance by offering discounts for payments in crypto coins. The network could be potentially used to authenticate reviews, which now are centralized and cannot be easily validated.

How do you see it? What do you think about it?

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My question with all proposed blockchain tech is ‘how is this better than traditional techniques’ and ‘why would people use this’? Saying ‘blockchain’ three times doesn’t prevent vote and review buying, for instance.

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My question with all proposed blockchain tech is ‘how is this better than traditional techniques’

If the cashback should be proportional to the consensus then people must cast a vote. How would you do it with a fiat currency? You may create a platform for people to vote but then it would be centralized and not transparent. Also, in this way the cashback is paid by the emission of new coins. Of course, that would need some regulation to preserve stability.

Saying ‘blockchain’ three times doesn’t prevent vote and review buying, for instance.

No, but it would be more transparent. For instance, only reviews linked to a previous transaction could be approved. But that wouldn’t be the main scope anyway, just a possible extension to focus on a second moment.

It gives the appearance of transparency. This doesn’t fix the problem of buying reviews or votes so there is no reason to trust and thus no reason to use this tool.

I have no idea what you are trying to achieve.
If Amazon joins in, it will get millions of good reviews because millions are using it on a daily basis.
Small merchants on the other hand will struggle to get recognition, if they somehow manage to even implement this blockchain into their service, which I REALLY doubt many would know how to do, given a blockchain isn’t exactly easy to understand.

Though let’s actually keep the technical stuff on the side an focus on the actual implementation → because that’s a mess.
For a start, how would I actually use this? Go to a shop, try to pay, then send a request to this blockchain and… what? Could the chain deny my transaction? Would it send me a message saying “This merchant got a bad rating, maybe consider cancelling your transaction”?
How would offering a discount through this system be different from a normal discount? If I don’t use the blockchain, am I getting worse deals?

Right now I make a conscious decision to not buy stuff from Amazon. I once bought some fabric online to make a costume and got a severe delay which meant I couldn’t make my costume in time for the convention I wanted to wear it on. So I went without costume. It was annoying, but that’s my decision and I don’t mind.
If I ordered it via amazon, I would have gotten it in time.

Your system cannot adress that.
Your system cannot adress the actual reason people use amazon or other services that might be considered “bad”. Because your system still relies on people rating the services via their actions - which is the exact same thing happening now, only with a blockchain thrown into the mix.

If your system can only enforce more ethical consumption by people being more ethical in the first place - it’s destined to fail. Because most people choose convenience over morals.

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And many people might not even consider a certain thing to be a moral problem, to begin with.

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Here’s what I really like about your idea: You started with a problem and are thinking of a way to solve it. A really common mindset we see with technology “innovation” is what we call “a solution in search of a problem”. People want to make something specific or want to use a new piece of technology, but they aren’t really filling a need. You have identified a problem that people want solved: how to spend their money ethically, within their financial constraints. I think that most people who are engaged in the cultural discourse in industrialized nations are aware that this is a popular concern. I also know that it’s an area that technology companies are currently trying to capitalize on, because I work for one of them. (Which also means that I have some insight into how complex assessing the social and environmental impact of purchasing choices is.)

Your general idea reminds me of a few initiatives that have been tried. Some communities have built custom “currency” and encouraged local businesses to offer discounts to promote local spending (local currencies have been created in Ithaca NY, Madison WI, Santa Barbara CA, and Corvallis OR). It also sounds like it’s using some of the same ideas as countries that use carbon emission credits.

It does sound like the actual mechanics of making your system more ethical would need a fair amount of work and research. As Jeremy pointed out, there are some real risks associated with determining merit via a pure voting system. Anyone who has ever tried to make a purchase based on Amazon reviews has probably been frustrated by the widespread corruption of that kind of system. And since you’re proposing a tool based around the premise of ethical consumption, one major factor that you’ll have to consider is the impact of your own product. What are the potential ethical, environmental, and economical impacts of your cryptocurrency? How much energy consumption does it represent relative to traditional currency? What are the risks and implications of economic deregulation? How might your currency be used to facilitate tax avoidance, money laundering, or black market transactions? Could it inadvertently provide further advantages to people who already have economic privilege? What risks are your users assuming in the event of a security failure?

Like I said, I think you have identified a real world need. You have brainstormed a potential solution, but the next steps are to ask yourself critical questions like “Am I really solving the problem, or am I making it more complicated?” and “What would I need to be able to practically apply this solution?” It sounds like you’re still a student, so in all likelihood anything this ambitious that you’re coming up with now is several years from seeing the light of day and will require a lot more research: both technical and ethical.

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For a start, how would I actually use this? Go to a shop, try to pay, then send a request to this blockchain and… what? Could the chain deny my transaction? Would it send me a message saying “This merchant got a bad rating, maybe consider cancelling your transaction”?

As I wrote on the thread head:

You might not get so many votes and of course, the system must always allow you to complete a transaction. To solve this issue I think the prize could be proportional to the number of votes. More people voting for a merchant means a higher reward. If none or very few are voting then the buyer won’t receive any new coin.

And

How would offering a discount through this system be different from a normal discount? If I don’t use the blockchain, am I getting worse deals?

You’re right, the normal discount wouldn’t be different. But there’s a sort of cashback. I wrote:

The emission of new coins is granted as a prize for such transactions

If the merchant wouldn’t offer a discount the buyer would still get a cashback.

Your system cannot adress that.
That’s true, but that’s not what it should aim for.

But that means your proposal is adding a lot of complexity and energy consumption without targeting the root mechanisms that drive consumer choices about which retailers to use.

The powerful sellers still can buy votes and now these votes ‘mean’ they are ‘more ethical’. The powerful sellers still can offer deeper rebates. The powerful sellers still have all the power.

Thank you all for the replies.

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So I agree with @ArielLeslie when they say this is a good thing to think about. I’m confused as to what benefit it gives though.

I get that aggregation of control by a few large companies, pushing out smaller (possibly more specialised) businesses, that seems like a problem (I say “seems” because you need to be extremely careful that you’re not [completely or partially] misidentifying the problem).

Which one, local shops or small e-commerce merchants? Those are drastically different problem categories.

How do you define central interference? The network is made of servers, the average user is likely to have little input. Are you not just replacing one central controling bloc with an ad-hoc one?

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