Abstract
This article examines ethical risks in cryptocurrency, blockchain, and distributed ledger technology (DLT) research through empirical analysis and proposes eight guiding principles for ethical practices. Key findings reveal widespread undisclosed industry relationships, conflicts of interest from token ownership, and low adherence to institutional review protocols. The study highlights three novel risks—conflicts of interest, risky methods, and inadequate disclosure—calling for sector-specific ethical frameworks akin to bio- or nanotechnology ethics.
1. Introduction
Cryptocurrency and blockchain research merges challenges from computer security, finance, and emerging technologies. Despite rapid industry growth—with billions in annual investment—ethical risks remain understudied. This paper analyzes research methods, ethics disclosures, and survey data from academics to outline actionable principles for responsible innovation.
Core Ethical Challenges:
- Decentralization: Raises unique accountability issues.
- Financial Incentives: Token ownership creates conflicts of interest.
- Novel Risks: Active measurement (e.g., hacking) poses ethical dilemmas.
2. Methodology
2.1 Literature Review
- Scope: Analyzed 79 empirical studies from 2,090 publications.
- Findings: Only 25% disclosed ethical considerations; 58% omitted financial conflicts.
2.2 Researcher Survey
- Participants: 32 active scholars (17% response rate).
Key Insights:
- 47% purchased tokens for research; 52% for personal investment.
- 75% recruited by industry; 44% had undisclosed industry ties.
- 82% aware of ethics guidelines, but only 32% used IRB/REB review.
3. Ethical Risks
3.1 Conflicts of Interest
- Industry Ties: Startups leverage academic reputations (e.g., Ripple’s $54M university fund).
- Token Ownership: Researchers often profit from holdings but fail to disclose.
3.2 Risky Methods
- Active Measurement: Market manipulation or hacking experiments risk harm.
- Security Disclosures: Anonymity challenges (e.g., Bitcoin Cash vulnerability case).
3.3 Disclosure Gaps
- Underreporting: Only 6% disclosed token holdings in publications.
- Whistleblower Risks: Researchers fear retribution (e.g., Nancy Olivieri case).
4. Eight Guiding Principles
- Research Lifecycle Planning: Outline token acquisition/disposal protocols.
- IRB Engagement: Educate review boards on blockchain-specific risks.
- Full Disclosure: Publish financial/non-financial conflicts openly.
- Use Testnets: Minimize real-asset risks in experiments.
- Secure Methods: Destroy dual-use tools post-research.
- Vulnerability Disclosure: Alert developers immediately.
- Minimize Value Exchanges: Limit token purchases to necessities.
- Lab Guidelines: Develop internal ethics standards.
5. FAQs
Q1: Why is token ownership an ethical issue?
A: It creates financial conflicts of interest, potentially biasing research outcomes.
Q2: How can researchers mitigate hacking risks?
A: Use testnets for experiments and adhere to responsible disclosure protocols.
Q3: What’s the biggest disclosure gap?
A: Industry ties—44% of researchers had undisclosed corporate relationships.
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6. Conclusion
Cryptocurrencies and DLTs represent a new normative class of technology, demanding tailored ethical frameworks. Proactive adoption of the eight principles can align innovation with accountability, reducing systemic risks as these technologies integrate globally.
Acknowledgments: NSF grant #1634202.
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