A Decentralized Market or State Sovereignty?

            As corporations become larger, more powerful, and fluid, our centralized institutions seem to be challenged more and more. The idea of impermeable states, with regard to economic corporations, has already been challenged by technology, data collection, and sheer spending ability, but decentralized institutions may pose an even larger threat. The blockchain, and what it can provide to states, represents the ultimate cost benefit conundrum: should we allow for even faster transactions, or preserve state sovereignty?
            As a public distributed ledger, the blockchain allows for limitless potential for lightning fast transactions across borders. Utilizing tokenized blockchains, microloans can help farmers in developing countries gain access to funds without the need for massive debt or interest offered by the IMF. Decentralized ledgers allow for better, transparent data collection which would greatly benefit companies and their ability to market. The blockchain also creates a sense of equality and anonymity among its users, which allows for greater trust and personal control. If the question is efficiency and economic growth, this technology is the answer.
             On the other hand, blockchain can be seen as a direct affront to national sovereignty. Countries like China have gone as far as to make tokenized blockchain exchanges illegal, while countries like the US create hefty tax laws to curtail their use. These countries fear a technology that not only acts as a medium for exchange, but also doubles as a currency. This could directly impact the country's currency, removing power from the state. Countries like Venezuela and Dubai, on the other hand, have openly expressed interest in adopting cryptocurrency to either augment or replace their currencies. This could be a radical adaption of technology, or a way to circumvent economic sanctions. At what point do these cryptocurrencies and their respective businesses become autonomous from the state, or part of its arm?
             Countries such as Ethipoia have expressed a desire to partner with certain blockchain technologies to improve the agriculture sector. This is a great use of the technology, without completely absorbing the "electronic currency" associated with that technology. Proper use of the blockchain can lead to a hybrid role between company and state, which allows the institution to be transformed by the technology without becoming the technology. The question of state sovereignty will still be tested with these emerging blockchains, tokens, and all else involved, but it is possible to envision mass adoption without a complete relinquishment of sovereignty.

Comments

  1. Venezuela has the highest inflation rate in the world, and its economy is in turmoil. With the value of their bolivar tanking, they have turned to Bitcoin. The Venezuelan President has even accepted policies allowing Bitcoin to flourish. Venezuela has really gotten behind Bitcoin, even mining it, and it has begun to integrate into their economy. I would say that in their case, it is becoming a part of their arm as you mentioned.

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  2. Isn't it interesting that the industrialized countries are those most opposing these new technologies and corporations which threaten traditional senses of democracy. Meanwhile, rising nations are considering these new options as ways to get ahead economically in a very western centralized market. Do you personally think the US will evolve to incorporate new definitions of sovereignty? Or is this something rising nations will champion first?

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