Governance in the Blockchain Era: The Smart Social Contract

Abstract

Since the emergence of bitcoin, 14 years ago, cryptocurrencies and the blockchain technology that underpins these virtual currencies have experienced a rapid growth, with a plethora of applications emerging. While most popular applications of blockchain technology are in the business field, its main features – such as decentralization or enhanced security – make it suitable to redesign social, cultural and political realities such as the social contract that regulates the relationship between states and citizens. Blockchain-based applications have the potential to change social values and the social contract itself. This paper aims to discover if smart contracts and blockchain technology can bind the social contract between the state and its citizens in such a way as to reduce corruption and increase efficiency of service delivery. Further, the emergence of a new type of social contract will be investigated: the smart social contract. This new concept aspires to enhance Jean Jacques Rousseau's social contract with the benefits inherent in blockchain technology. It involves an automatic execution of the obligations that a government assumes through a certain program, determined by consensus by all the members of society. In case of non-fulfillment of the obligations, the persons /institutions responsible are sanctioned appropriate penalties. We implement and evaluate a prototype of a smart social contract in Solidity, finding that the contract is capable of automatic execution upon the achievement of predetermined conditions, such as the fulfillment of an obligation by a local government official.