Black Mirror Social Credit & Blockchain Technology

For those of you who do not know what Black Mirror is, we suggest that you go to Netflix and watch Black Mirror - Season 3, Episode 1 “Nosedive”. The episode takes place in a future society where people self-curate and constantly seek validation through likes and ratings from social media platforms. If Black Mirror could be summed up in one sentence, it would go along the lines of “Technology is exciting, but people are awful.” Today we dive into China’s take on the Social Credit System and how our future can quickly become a real-life Black Mirror episode.

It is no surprise that China has a dilemma. Going back a few centuries, the Roman Empire encountered a similar situation and had a rough time keeping their empire intact. Thankfully for China, they have progressed greatly in technology and came up with something called the internet and blockchain technology.

By 2020, China wants to have a system to assess a person’s creditworthiness. Credit is still relatively new in China as Chinese citizens do not have a credit card, a mortgage, or other bank loans. Since they are basically starting with a clean slate, China officials has decided to not only take financial credit information, but also legal infractions or anti-social behaviors into account for their Social Credit System. Things like parking tickets, jaywalking, not sorting garbage in the appropriate bins, too much gaming, too much smoking, can now have a negative impact on your social credit score.

China’s social credit system aims to reward honesty and integrity, while punishing the lack of trustworthiness in various aspects of life for individuals and enterprises. Officials are still trying to come up with a way to calculate credit scores and how social behaviors will be factored in. For now, the system is more like a digital archive of past misdeeds.

What type of information is included in China’s Social Credit System so far?

Financial credit information from People’s Bank of China
Creditchina.gov.cn is a database for enterprises that records administrative penalties, various blacklists and also “red lists” for good deeds such as filing taxes on time.
The National Tourism Administration’s blacklist for “uncivilized behaviors” names tourists and operators who misbehave or causes a disturbance in public abroad.
In Shanghai: Jaywalking, traffic violations, refusing to visit elderly parents, not sorting out garbage into the appropriate bins or dodging train fares could all be recorded on social credit files. Credit expert Hu said these infractions should be scrubbed from records after a few years.

What are some punishments for bad social credit?

Authorities can impose a wide range of penalties because they can block a person’s ID card number, which is required for daily activities in China such as boarding a flight or registering a new social media account.
China currently has a blacklist known as the Chinese Supreme Court’s list of “discredited” people and entities. Those on this list are banned from taking airplanes, high-speed trains, buying high-end products or houses, and even prevents them from going on tours and vacations.
For serious offender, some cities already force people to repay debts by switching the person’s ringtone, which could begin with the wail of a police siren, followed by a stern message, “The person you are calling has been listed as a discredited person by the local court. Please urge this person to fulfill his or her legal obligations”. Only after repaying the debt, are the offenders taken off the blacklist.

How is Blockchain Technology and Cryptocurrencies related to this?

As discussed in our previous article, society is now filled with Internet of Things (IoT) technologies which we interact with daily. If a government or enterprise who has access to all your records, both good and bad, wouldn’t you at least want that information to be immutable? Due to the nature of blockchain technology being immutable and ideally decentralized, blockchain technology is required for China to fully implement their vision of a Social Credit System. Having immutable information prevents malicious parties from changing past events to improve credit score, but also protects innocent parties from being framed for things they did not do. Moreover, with a Social Credit System, smart contracts would be one of the most important innovations that is required to carry out automatic consequences. Especially with a population with more than 1.4 billion people, the Chinese government would need to rely on automated code to enforce their vision without the need of human intervention.

What are some cryptocurrencies that have possible use cases for China’s Social Credit System?

There is a misconception that China is banning all cryptocurrencies. This is for the most part false. Rather, they have chosen to have tighter regulations and control over a select few they deem are “good”.

Here are a few cryptocurrencies that can have a big impact on China’s future:

DeepBrain Chain ($DBC)

DeepBrain Chain pools together computer resources from all over the world to provide computational power to artificial intelligence companies. This helps AI companies significant cut down the costs of computational resources, allowing them to become more effective in prototyping and practice. With China on full throttle with AI, investing more than $150 billion into AI technology, DBC can potentially become a huge asset in furthering the use of AI. The more computing power AI has, the more information China can gather on its citizens. China has already implemented AI to have facial recognition, so that on top of your phone tracking your daily habits, they now use cameras around the city to get real-time video of what you are doing. When a person jaywalks or does not pay the fare when entering the train station, the AI sees you and can automatically dock you down on the Social Credit System. This is just one of the few use cases this technology can have. Yes creepy, but it’s unfortunately our reality moving forward.

Waltonchain ($WTC)

Waltonchain has uses that go beyond China’s Social Credit System. Please read this very insightful article for Waltonchain’s Bigger Picture. For our purposes today, we will talk about how RFID technology is required for for the Social Credit system. IoT, Internet of Things, connects everyday items to the cloud so that information can interact with each other. So in the examples stated earlier about gaming too much or smoking too much, how does the government know? If your everyday items were tagged with RFID, guess what, the government now knows how often you’re picking up that controller or spending online playing Fortnite. Same thing applies if you’re smoking too much. They can now track how many packages of cigarettes you are smoking by tracking your purchases. The government doesn’t have time to manually look at each case though, so this monitoring would have to occur through automated smart contracts on the blockchain. Seriously, there’s so much you could do with RFID technology that possibilities are endless!

Neo ($NEO)

NEO is a blockchain platform, similar to Ethereum, and is used to create decentralized applications (Dapps). Often touted as the Chinese Ethereum, NEO has steadily been rolling out new Dapps. If a cryptocurrency does not exist yet that could help implement China’s Social Credit System, Chinese officials could choose to create a Dapp on top of the NEO blockchain to solve that whatever issue they may run into. Think of this as your Itunes App store, just like Ethereum.

Hopefully all this new technology does not come back to bite us in the butt. Governments are already accepting the use of blockchain technology and it is only a matter of time until we see real life utility use for a lot of the cryptocurrencies out there. We just hope we don’t end up creating our own Black Mirror episode with all these innovations.

Cheers,
The Blockchain Musketeers

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Disclaimer: The information provided by the Blockchain Musketeers is our own opinions and should not be taken as investment advice, financial advice, or any other sort of advice. Nor should this information be used to determine if you should buy, sell, or hold a cryptocurrency. Please conduct your own due diligence and consult your financial advisory before making any investment decisions. Only invest money which you are willing to lose, as cryptocurrencies is not suitable for all users.