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Social Credit and The West

When one thinks of a social credit system in many cases one word immediately comes to mind: China. While the Chinese government has certainly been making waves with its new system, it is not the only nation to have explored one, and more definitely not the only nation seeking to fully realize said system. I am not writing of the Chinese system today, but instead the emerging one’s of the West. My intention is not to cause alarm, but instead examine critically where we are now and to stir the minds’ of the present to aspire for what the future should be regarding them.

First off I would like to instill just a little caution into my reader before we proceed. In a lot of the European nations the very concept of resembling China seems obtuse; they feel it would never work with their people nor with their customs. While not an unfair assessment, it is nonetheless a flawed one. To assume the technology will never emerge in the West is both illogical and statistically inaccurate. The technology will undoubtedly emerge, the only question is what it will look like in the nation you reside in. Fortunately, this is something that, as I will detail, if citizens act quickly enough may never end up a facet of government in the same way it has in China.

To dispel any doubt that a system such a social credit could “simply not exist in Christendom” consider the following: If you live in Europe or North America you already live with a social credit system. It is rudimentary yet it controls access to land, commerce, and personal opportunity. You are not obligated to take part in the system but many would find living without it unfathomable. Have you guessed it yet? Everyone permit me to introduce the modern Credit Score. Most people in the West reside in a constant state of debt as a lifestyle which gives the credit score a person has more weight than people think. It can determine what neighborhoods you can live in, what businesses may or may not work with (more specifically income requirement to pay off debt someone already has), what career you can get into, and more. For such a powerful tool most aren’t even aware of its effects on their private lives.

Now that the concept of a Western demerit system has been clearly shown to already exist, let us now turn to what Western governments would LIKE for a future one to resemble. The simple answer is China. The longer answer is: a system that integrates currency and economics, career and education, background, biometrics, and medical records into a single unified theory of how to run a nation state. While the idea is appalling from both the perspectives of privacy and human rights one still must marvel at the uniformity and conformity it would bring. It would integrate economics with morality as defined by the state. It also most likely in state hands would be a system with no option but to participate in. While at first it may be optional and even appealing to use, with time it would become mandatory and progressively more authoritarian in nature. Unfortunately I don’t see a way a social credit system in the Western world could not exist in coming decades. Technology is a breaking wheel; the true instrument of forcing society to adapt or collapse as a result of its developments.

Perhaps my asserting the interest of Western governments in this technology is off putting to you, and indeed it should be. However, this is not something I actively have to speculate on. The Known Traveler Digital Identity project is designed to allow for interoperability between social credit based attestations from government and private entities for allowing people to fly. Another example would be this fascinating article about the transition of the existing Credit Score infrastructure to a social credit system to “accelerate financial inclusion” using “artificial intelligence and social media, instead of paper-based scoring methods”. There are many other, smaller projects and I am only providing these as more generalized examples since they target the West as a whole not simply one nation.

If such a social credit system is inevitable, then of course that begs the question: why am I writing this? Well my esteemed reader contrary to your newspaper I am not here to simply and exclusively sell doom and gloom. In fact quite the opposite. I am here to tell those of you in the West that all is not lost for you, and in fact your best days may yet be ahead of you with this technology at your back. As I mentioned earlier a credit score for Christendom has existed for what is now roughly three generations of people. It is a system that, while flawed, is in the control of companies not governments and has remained useful without being mandated. The very fact that it is optional and can be lived without in Western society actually may be why it thrives. With effort focused on advancing the right projects and technologies we can replicate and exponentially improve upon the success of these privatized social credit systems. If done properly the benefits to individual freedom as well as shrinking government through decentralization cannot be overstated.

First consider the economic aspect. At the moment many nations (including the EU and US) are exploring Central Backed Digital Currencies (CBDCs) which are essentially government money with in built tracking. The downsides of this are obvious. The government could see your every transaction on their private blockchain. They could set your money to disappear if not spent by a certain date. They could set it to not let you buy more than a certain amount of fossil fuels, foods, or even electricity. Above all they would have programmable value and the absolute mountain of data every person would generate using it at their finger tips. In essence for the first time in human history the rulers of a nation could control both M1 and M2 (quantity of money, and how quickly money changes hands for those of you less proficient in economic jargon) all from the comfort of the nation’s capital with all the data on how it is used to boot.

Taking that dream from the claws of nationalism would be primarily cryptocurrencies. The benefits of cryptocurrencies are as stark as the one’s the internet presented back in its time. Much like the internet it also has been critically underregulated as governments scramble to figure out how they even could go about doing so. This is the first weapon in our arsenal that citizens in nations such as China lack. In Europe and the Americas it is far harder to regulate the internet without major backlash from lobbying groups, organizations, nonprofits, local governments, and especially the citizenry as a whole. Even proposed actions to try and censor the internet or ban encryption have been met with such harsh criticisms and severe backlash most in political office take the smart path and forgo the issue altogether. The internet was designed to be permissionless and free to express any view in an environment that does not discriminate. People like that about the internet and unite across political ideologies on the issue making it very hard to touch if you are an elected official. For the unelected in places such as the EU or the US federal government they also also heavily impeded by the rules and laws already on the books. Cryptocurrencies follow in the footsteps on the internet. They are impossible to shut down without taking the internet down with them, making outright bans on them technologically impossible. As for regulation, there have been attempts to erode the privacy of cryptocurrency wallets and even some coins, but so far all these attempts have failed for similar reasons. This makes cryptocurrencies the ideal replacement for a market dominated only by governments since the 1500’s. This also solves the first part of our social credit system as now we have trustless, permissionless, and secure money that benefits both democratic governments and their populace alike. To form our new decentralized social credit this is a must; the backbone of our system (which for the remainder of this I will call our social credits Demerits).

Education is the next big thing many cultures are exploring for integration into our blockchain social credit system. At the moment the Credit Score that currently exists in the West often has its foundations in the upper levels of education. In the United States for example they often issue credit to students to finance their higher education, and this is encouraged as both a means to build their credit score and an investment in their long term careers. In our system, we could choose from a variety of methods. For example we could use our cryptocurrency smart contracting to allow for trustless lending to pay for a student’s tuition. Using some more recent novel technology such as zk-SNARKS we could allow a lending company (or even a literal algorithmic contract) to ascertain all manor of information about someone WITHOUT ever actually sharing the information, thereby preserving both privacy and trust. Another interesting example would be the tokenization of an individual’s education expenses. For this idea the aspiring student would take that same information proof detailed in the previous example, except this time they would be issuing their own token for ownership of their debt. In essence the student trades “stocks” of his education, and much like a small business the market of people buying his debt determines how much money he can get. Both methods above would utilize vouching from other people who know the student in the form of staking their own Demerits. Instead of mere words the student can have anyone he has proven connections to stake some of our new social credits to prove their collective trust. Should the student fail to deliver those Demerits he was lent are erased from the lenders, ensuring the dynamics of our current Credit Score system are observed.

Next we come to career influence of social credit. This is where a system like this really begins to shine. Contracts can be entered into using the same staking system of Demerits. We can track and prove employment history securely and privately. Projects and undertaking of both the state and private entities can offer participation tokens which can be used to easily trace back to the project itself and all of the many details of it. This could be tied to a specific identity, or anonymized while still preserving the authenticity of the employment history. Projects from government bodies could even incentivize completion of a project with Demerits and in addition to the the cost in auctions a Demerit value could also be staked. This would be possible using the politicians’ own social credit status which would allow them to “vouch” for projects that would incentivize a job well done as well as putting the reputation and credit status of the political office holder at stake.

I have only just scratched the surface of the potential and drawbacks of a Western social credit system in these pages. I cannot of course do any one subject full justice that has such a broad scope with mere paragraphs. Instead this is merrily my first foray into the vast implications of such a concept, one that hopefully will be farther elaborated on in my coming works. For now though as evidenced above there is much to explore in this subject. It is my hope as ever that humanity turns their hands and minds to making this technology a net positive to their civilization and dispels the calamitous future that could be unleashed with its improper use. Only time will tell though.