Chinese-style social credit system infiltrates Silicon Valley


Being a powerful economy with one of the fastest growing entrepreneurial ecosystems, China has many positive traits that Western tech companies can learn from and be inspired by. The Communist regime’s draconian social credit system is certainly not one of them.

Sadly, however, many American tech giants such as Uber and Airbnb seem to want to embrace this same dystopian limit and social credit system and tweak it slightly to fit their agendas.

If public awareness of such a blatant abuse of (extrajudicial) corporate power becomes mainstream, this could very well serve as a breaking point for the mass adoption of blockchain technology and its ramifications.

A classic case of Orwellian dystopia?

For those not in the know, the Chinese government implemented the controversial social credit system in 2014 to rank citizens based on their creditworthiness. But this system is inherently different from the three-digit credit score system that is prevalent in most parts of the world, including the United States.

The scope of China’s social credit system is vast and is determined on the basis of a range of measures related to social and personal finance.

For example, a Chinese citizen could improve their social credit rating by donating blood regularly and paying all of their bills by their due dates. Likewise, smoking on a train or even criticizing the government can seriously undermine one’s social credit score.

In conventional credit score systems such as the one in the United States, the ramifications of a bad credit score are strictly limited financially. In China, however, having a bad social credit score could essentially deprive citizens of many of their basic rights such as the right to use public transport, the right to enroll their children in a good private school, or even to be hired for certain jobs.

Those in the rest of the civilized world who are familiar with the Chinese social credit system generally disapprove of this practice, calling it a classic example of Orwellian dystopia (referring to George Orwell’s dystopian novel, 1984).

However, few people know that right under their noses, several Silicon Valley tech giants have already pulled a leaf or two out of the messed up Chinese policy and are now busy implementing it with their customers.

A business-oriented social credit system

The issue was first brought to light by a detailed report from Fast Company earlier this week. The report said that although Western governments have yet to roll out anything in the direction of China’s social credit system, many private sector organizations have already implemented similar policies under the guise of “credit ratings.” clients “.

Chief among these organizations are some of the largest US insurance companies, the report notes. He cited how the New York State Department of Financial Services recently allowed insurance companies to rate clients based on their social media posts, among other metrics.

Essentially, this means that if your insurance company finds out that you are an avid rock climber through your social media posts, they are free to charge you a much higher premium on the grounds that you put yourself at risk more often than you do. ‘a person with a sedentary lifestyle.

Likewise, companies like Airbnb, Uber, and WhatsApp can ban anyone on their respective platforms without even going through the proper procedures or giving you an opportunity to appeal the ban. Note that most of these companies always make it clear in their terms and conditions that they reserve the right to refuse you services without providing any explanation to justify the move.

An arbitrary ban by Uber for fragile reasons will prevent a user from finding a route even in an emergency. Likewise, an Airbnb ban means you could lose access to the more than 6 million listings the company owns worldwide.

Blockchain-based services could be the solution

Because blockchain-based platforms follow a decentralized model without hegemony by an almighty entity, they appear to be the ideal solution against arbitrary corporate policies that violate user rights.

Decentralization has the potential to serve as a viable alternative to Uber and Airbnb by alleviating the need to have a centralized body acting as a clearinghouse. Such a system would be beneficial to both the consumer and the service provider as they will be dealing with a peer-to-peer system without having to pay any third party commission.

Proponents of decentralized applications (dApps) believe that whatever service a conventional platform offers, a dApp can deliver it more effectively with increased security, a much higher degree of transparency and greater user participation.

Despite all the benefits, however, the dApp ecosystem has yet to mature enough to challenge the convenience and familiarity offered by most well-established conventional platforms. But if we are to trust the words of the promoters of the industry, it is only a matter of time before the balance tips decisively in favor of decentralization.

Do you agree that blockchain may be the ultimate answer to all those Silicon Valley companies eager to embrace the Chinese-style social credit system? Share your opinion in the comments below.

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