Blockchain Nation States

Comments (Archived):

1. Blockchains are 80% about governance and new models. The other 50% is technical. Check out https://bitnation.co/ for the latest on nations governance on the Blockchain.

   1. 130%

      1. Ha ha!

      2. That extra 30% is part of the secret of block chain!

         1. Alchemy? 🙂

2. The US (and other post industrial capitalist countries) are anchored to the existing system of value extraction and basic theft. This system has created a true 1% of vultures who are impossible to prosecute, unaccountable to any government or judge, and care little for the society they are extracting from.I was struck this week by the wells fargo CEO’s testimony in congress. This man presided over what basically amounts to a $200M robbery and could not give a toss. The next headline was that we should now expect monica lewinsky to be in the front row to intimidate hillary at the debate on monday. This was just last week…This is a shocking new reality that my 3 children will inherit. This is the perversion of a capitalist system, and the extraction and open theft of its resources.This is why blockchain and other open protocols are the greatest threat to this country’s future. Those in power have a vested interest in preventing these innovations from taking hold. They still have their paws in the honey pot. Other, more open and socially responsible countries will emerge as the fore bearers of what i hope is a more caring, peaceful and less material future for my children.

3. Argentina. http://mobile.nytimes.com/2…

   1. Nice try! But as an Argentinian I have my doubts. I am working in this space and on the one hand Argentina has very talented blockchain developers working on amazing and well known projects, the new government is very interested in innovation (last week YCombinator partners were here, US ambassador and local authorities included), and I prepared a presentation about blockchain for a minister of industry BUT on the other hand it is almost impossible to move the needle in our prehistoric legal system run, mostly, by lawyers here. So, the local blockchain engineering scene is vibrant but its impact is outside the country.Regarding the article, almost nobody uses Bitcoin as a currency in Argentina and now in 2016 we can, again, use banks for receiving our international payments. At the end using Bitcoin is more expensive when you need to exchange it for the local currency or dollars.BTW, come to the Latam’s Bitcoin and Blockchain Conference in Buenos Aires in November.

4. The greater point is whether the nation state model can survive the blockchain revolution. Their economies are built on the central bank system, which contradicts the characteristics of this wave of new tech.The Great Wall of America (and not a Trump in sight) is coming by default?Coincidentally I was in an art gallery yesterday, and Yelena Popova’s video projection of euro notes also got me thinking on blockchain. Also bought a hard copy of Noam Chomsky’s Occupy from the gallery’s shop. Hadn’t been to a gallery in ages. I should go more often.

5. the nation state system is already dying, the only question is what comes next. there are two options:1. world government in the form of another layer of government on top of the nation-states2. governance by internet communities whose boundaries are delineated by their currency#2 is obviously the path that leads to greater fortune for all, though it will require something more akin to a revolutionary mindset.

   1. Don’t we already have 1? The framework of World Bank, IMF, UN, et.c.?

      1. Yes, and we can see how well they work.LE’s remark is on target: The bigger the group, the more difficult it is to come to consensus. E.g., this current globalization push is another moonbeam dreaming nonsense chattering class fad.

         1. nonsense chattering class fadExactly. It’s like you when you watch CNN (or really any news program) and they say things like “and questions are now being raised about…”. [1] [2] Everything on CNN is “breaking news”. It’s like the use of “FREE” in advertising, pavlov for “stay tuned”.Example I had last night was with those tapes being released on the shooting in Charlotte. I mean honestly how many people really need to see this this early? It’s infotainment plain and simple. Where else do you see the government and police bend over such as this. This is all fed by the news business has nothing to do with ordinary citizens and what should be important to them or what is important to them.[1] A tip off that a statistically insignificant group of people actually care about the issue. Or that the media sees it as “merchandise” for achieving their goals.[2] Notice how Trump has adapted this in many statements that he makes. He uses the “people are saying” quite liberally to mean “someone said it somewhere at some point” understanding how the media has long done the same to further it’s goals.

      2. Yes, that is true — the framework is definitely there. There is still a notion of national sovereignty and strong national governments. When the hype around national debates shifts to a world president inauguration/coronation, then the shift will be complete. Unless another path is chosen…

   2. world government in the form of another layer of government on top of the nation-statesThe larger the group the more difficult it is to share common goals. Even the States have different ideas of when a kid should be allowed to drive a car, or whether you can pump your own gas, get an abortion, get married, have sex and so on.

      1. nah it won’t be so hard. if you disagree you’ll just be labelled a terrorist and dealt with accordingly……

   3. > boundaries are delineated by their currencyWhy are exchange rates such a bad idea?

6. It’s all maths.https://uploads.disquscdn.c…Given that, in recent years, the likes of FB and Twitter have been copying WeChat and Baidu has made notable breakthroughs in speech recognition it’s becoming clearer that the Chinese model of technology (including Blockchain) is going in very interesting directions.

7. My money is on a smaller, more homogenous country (< ~5MM population) exhibiting a practical problem that blockchains can solve today. In the first group I’d put Estonia & Singapore: Estonia because of its innovative initiatives around e-government and Singapore as a strong financial & banking center where there’s enough concentrated talent from today’s finance to tackle supply chain optimization that blockchains can trigger. On the other hand, Botswana & Namibia could champion easier remittances (again on top of the blockchain) and are better-suited for that everyday use by non-nerds example. I’d very much like it to be someone in Africa.

   1. > supply chain optimizationis often regarded as a problem in stochastic optimal control. Where is the valuable role for a block chain?

      1. Supply chain verification is probably the better term – my idea here is much more basic 🙂 It’s knowing and authenticating every step along a chain of hops/transactions: for example w/ remittances from originator through recipient. We see this challenge in online advertising a lot and the desire to be able to track and attribute accordingly every ad exposure/impression. We describe it as supply chain and it’s a similar concept in financial services or any type of multi-handoff activity (like those common in everyday government).

   2. I think long term this is unsustainable as it is with the current encryption scheme. At some point, sooner rather than later, someone will build a really large quantum computer, making all blocks forgable.I also am not shocked by early choices in activity. More than half the countries involved have interesting capital issues. It’s hugely telling that 2-3 have currency instablitiy issues/have had currency instability issues/will be shortly (china, zimbawe,rwanda), another 2-3 are countries where finacial markets play a huge role for those countries with currency issues (hong kong, uk), and another 2 countries listed are famous for their bank secrecy laws or ease to set up a shell company (Singapore, Barbados, Switzerland)Take out Canada, Japan, Estonia, and Georgia and this list looks like a great way to shift money around without people who need to audit to audit.

      1. Interesting perspective. Assuming relevant regulatory orgs (and this is a big assumption) came up to speed on new tech wouldn’t auditing be simpler on blockchain-based transactions?

         1. No, because you could blockchain transactions alongside cash transactions inside bank secrecy laws to moneylaunderPerson in China cashes in and sells via the blockchain in one account to a shell company in Barbados. The shell company in barbados then cashes out via one account, and recashes into the blockchain through another account. (or transfers the block directly to another account) Shell company in switzerland then buys via the blockchain from barbados 2. meanwhile, china guy is actually the owner of all the shell companies, shows up in Switzerland, and cashes out.So he basically trades with himself to get reminibi out of china. Since shell accounts can anonymously transact, and since they are shells in place with bank secrecy laws, how are you going to track through the blockchain itself that someone traded with himself

         2. Also, lovely bloomberg article about how it is possible to moneylaunder with blockchainhttp://www.bna.com/blockcha…

      2. Quantum computing that can solve blocks can be coded for the idea of a 51% attack and a decentralised database being attacked by a quantum computer seems a problem that doesn’t exist yet. Software will fix it. There’s no need to be worried about new or better “renegade ” hardware.

   3. Do not discount Canada being on the forefront of this evolution considering we’re being led by quite the liberal, our prime minister Justin Trudeau who is also a BIG believer in tech. Additionally have one of the most exciting and prospering technology ecosystems in Toronto and outlying Waterloo, where talent is very aggressively sought after.

8. If you missed this: https://joi.ito.com/weblog/…

9. If the US is not leading the way, will we begin to subvert the tech at some point?

10. The USA can’t afford to sit on their laurels in this new world we are entering into or they will lose their lead; and then they’ll definitely need to clamor for “making America great again” LOL!

    1. Everything comes at a cost. If the cost is to high we will have to lose our lead. It’s a matter of priorities and keeping your eye on the ball.

       1. That’s the incumbent’s mindset that always allows disruption to occur.

          1. Actual “disruption” requires more than an “incumbent’s mindset”. E.g., there is a huge “incumbent” industry building cars with gasoline powered piston engines. If I were in that industry, I’d be laughing out loud at “disruption” from gas turbines and electric power. Similarly for a lot of, most of, huge “incumbents”.E.g., one of the pillars of Buffett’s success is to invest in companies where he is quite sure the company will continue to have good market position with good customers giving good revenue and earnings for at least the next 20 years — that is, he wants to invest in “incumbents” largely immune to “disruption”. So, Buffett definitely has an “incumbent mindset” and tens of billions of dollars in personal wealth to show for it.Disruption is possible, but it takes more than an “incumbent’s mindset” and, say, some batteries and electric motors.Where are some examples of disruption? (A) Computers with microprocessors from Intel instead of mainframes from IBM. (B) The Internet instead of dial up into AOL. (C) Electronically controlled auto engine fuel mixture and spark timing instead of carburetors and centrifugaladvance distributors. (D) Drywall instead of lath and plaster. (E) Laser printers or inkjet printers instead of impact printers.There are lots more good examples from the US military and medical care.E.g., last night I watched again the movie Midway. There Halsey was in the hospital with a skin disease. They gave him oatmeal water baths. Well, now we would say that he had worked too hard and got a case of the autoimmune condition eczema that is usually nicely handled by some suppression of the immune system with some steroids. Why? An oatmeal water bath was just a wild guess. The autoimmune cause and its suppression with some steroids had some real science and solid causal logic behind it — good lesson for some approaches to “disruption”.We can go on and on understanding how successful disruption works. Again, an “incumbent’s mindset” is rarely a sufficient condition for successful disruption.

             1. Got it. Thanks for taking the time.

       2. If more people in the States had this attitude, we’d be in a much better place.

11. Change happens from the edges. Small states will lead the way in nation state transformation. Why? Follow the incentives. Check out Estonia’s e-citizenship program: http://www.dw.com/en/could-….Kaspar Korjus, Estonia’s e-residency program director: “E-residency in the larger context is the new nation state; we are building a whole new digital nation for global citizens. That means that every person on this planet can become an e-resident of this nation. By becoming an e-resident each person gets a digital identity, contained in a smart ID card. Once you get a smart ID card you can log in to the nation state services, you can digitally sign everything and you can be part of this new community.”Why did Estonia decide to adopt this method? “E-government has been in Estonia for the last 15 or so years… Now we’ve just opened the borders to everyone else, so that everyone can be part of this… The reasons are twofold: firstly, it’s purely economic, so that Estonia can be bigger. Estonia has a population of just 1.3 million and the internal market compared to Germany for example is so small that we just need more customers outside of Estonia. Secondly, it doesn’t add too much cost for us to open these things.”Point: Small states are economically incented to disrupt the concept of residency, and nimble enough to execute in a meaningful timeline.Implication: Large states are economically incented to resist and leverage broad power to slow the change (mute the advantage of the small state). This leads to conflict. In this case it could very well follow a similar pattern to the battles around international taxation (Malta, Cyprus, Panama, Ireland, England, Seychelles, etc…).Result: Sadly, like all innovations that could promote a “better good”, we lack the global change management vehicles to facilitate a sensible process of adaptation and adoption. Until we fix that problem, every innovation means years of conflict, as the parties pick sides and draw their lines in the sand, until generational turnover brings sanity to the table.This Entrepreneur’s Big Ask: Let’s all of us in the “Global Innovation System” invest more in innovations that grease the wheels of change… The leverage would be massive.

    1. And yet Estonia has a very very unfriendly attitude to bitcoin activity.

12. Agree with Fred. They who control the money controls the game. It is early in the game. The other maxim is they who control the network, control the game. Where is the Bitcoin/Blockchain network deepest? Toronto is certainly on the spectrum. Singapore has a lot of government support.Like Fred, I think that the city/nation that controls the bitcoin network in the 21st century will dominate development. Having a regulatory state that stymies development will cause the network to set up somewhere else.If we think about entrepreneurial ecosystems, Brad Feld has said they are entrepreneur lead. Agree, but entrepreneurs need money-which is why Silicon Valley has stayed so powerful. Plenty of risk capital there that attracts entrepreneurs which builds the network which attracts more capital. Virtuous cycle.Ecosystems cannot get started without money.Risk or Settlers of Catan are great ways to try and conceptualize how to build the Bitcoin Ecosystem

    1. Re”Ecosystems cannot get started without money” … I’m in a situation where, in SF, a startup advisor gave a $8 million pre-money valuation for my system and in London it’s $400,000 post-money.Please see BBC’s recent coverage on “Why hasn’t UK produced a Google / Facebook etc”:* http://www.bbc.co.uk/news/b…* http://www.bbc.co.uk/news/t…https://uploads.disquscdn.c…https://uploads.disquscdn.c…This entire argument about which city/nation controls Bitcoin network is dichotomous since the moral philosophy appended to the technology, following 2008 Crisis, was it is that NO NATION STATE, FEDERAL BANK or BIG BANK controls it because they couldn’t be trusted.Trust should be transferred to “the people” (in this case, a clique of developers/miners).Yet it seems to be looping back to “Whichever bank / city / nation has the most capital freedom” will dominate and win the end-game.The UK is less likely to be the FinTech powerhouse it was now that Brexit is happening.Singapore has a huge sovereign

13. Since a block chain is supposed to be decentralized, where is the big advantage for a particular country or economy?

14. From this (Gallery writeup):http://www.petzel.com/exhib…At a moment when public debate spotlights a global governance system that seems to ignore the needs of many of its participants, starkly contrasting visions for alternative political systems are emerging. What would a world look like where the collusion of an elite few would be rendered technically impossible? Can a truly inclusive global future exist?Elite few? Who? The people who can afford to buy (and support) art in galleries that are located in high rent areas like the Chelsea Art District? Or that live there? Everyday people (even those without jobs) aren’t talking about alternate political systems. They simply want their basic needs taken care of and/or want to go back to their factory jobs and have a beer at the end of the day. As far as the elites in other countries, and how they operate, that is not ours to meddle with or attempt to change. I am sure I am missing some of the point here but since the gallery took liberties in defining the problem I will do the same with respect to what is important locally (which this country has ignored for to long because apparently ‘it’s not what we are about as Americans’).

    1. “As far as the elites in other countries, and how they operate, that is not ours to meddle with or attempt to change.”One could say that is what US foreign policy is all about.

       1. US foreign policy can be summed up by two primary goals (of course there are others).a) Keep the oil flowingb) Bribe everyone so we can get what else we need when we want it and have things the way we like and the way we see fit and view the world. (Turkeys at Christmas care of the mafia in other words).So for sure “do the right thing/leadership” does not operate equally and everywhere. Nobody really cared what happens to girls as only one example in those congo countries.http://www.cnn.com/2015/04/…

          1. Yep, it is asymmetric and no matter if it is right or not in a moral sense, that is the way it works. People in survival mode all over the world don’t have the time and resources to lobby for their rights or interests. That is why activism and philantropy is important in my opinion.How blockchain based e-government could change that? Maybe because it would give more visibility, transparency and trackability to the system. But I doubt that is all that is needed. Religion gave us moral frameworks in the past. We need contemporary moral frameworks to move on.

             1. In case you haven’t read it, you might be interested in ‘Confessions of a Economic Hit Man’ by John Perkins.https://www.amazon.com/Conf…

             2. Thanks Girish, added to the list. I should read more, because the list is growing.

             3. Of course you know that reading more will cause the list of ‘to-read’ to grow at a even faster pace :-).Think of it as the Lindy effect as applied to reading.

15. What? Blockchain technology? But there isn’t such a thing. Blockchain underlying protocols? What?? A blockchain is just a bad data structure with blocktime and blocksize no more no less!Then a blockchain as a support inside a protocol such as Bitcoin is just a component, not a revolution. The innovation from Bitcoin is the autonomous distributed consensus which doesn’t exist somewhere else even Ethereum is macro-centralized. Understanding this is important to understand that states are obsoletes structural governance systems.

16. The Vatican. Extremely wealthy and influential and with a huge global network.

17. CONTRIBUTORS:We are long on the entrepreneurial skills and the origination of innovation from the United States or influenced by people educated in the United States.There has always been some sort of regulation in every Democratic country and businesses usually navigate any impediments or obstacles to the success of the company. Many companies have done it and will continue to flourish inspire of the perceived obstacles and overlooked benefits that we all embrace.

18. I’ve trouble imaging how you could get regulation ahead of the tech, or what a permissive regulatory framework would even look like. You concerns echo Steve Fuller’s in the below article about regulation in the US holding us back from innovating at the rate of other countries, even when we develop the tech here. CRISPR is the example he uses, where China, which he describes as “ethics-free”, can innovate more quickly on US-borne tech because of their lower constraints. He says the solution is to get policy makers to anticipate that tech innovations will happen and set up strategic policies to get ahead of them. Unfortunately the interview is short on insight as to what that would look like http://bit.ly/2d24u7l

19. It sounds strange to me that Common Law countries need Regulations and/or “Legal Sandboxes” to address the Blockchain “issue”. What I can observe, as a result, is that some of the most exciting projects, even global ones, are just avoiding these unsecured and not-agile jurisdictions.

20. In today’s news… “Global Banks Partner to Form Blockchain Payments Network” http://www.coindesk.com/glo…

21. As decentralised governments emerge with better democracies I suspect it will be smaller states and places in conflict zones- Balouchistan , Myanmar etc The UN clearly want transparency and immutable records – this bodes well for emerging states and those in conflict? Prehaps ..

22. http://www.wsj.com/articles… one of the greatest economists ever, George Stigler, did a lot of research on regulatory capture-getting a Nobel for it. Too bad we don’t follow his theory and just watch it being played out over and over again, industry after industry. I don’t see many of the countries on the list as less corrupt. Anytime there is big government, there will be corruption. Singapore for example is a weird dichotomy. Sort of a benevolent dictator.

23. regulatory captureA certain amount of this is acceptable. Just like radiation on airplane flights. Just like crime. To eliminate is vastly more expensive and impractical than simply controlling to an acceptable level.It feels like a significant part of our entrenched inequality hereCan you give examples of this?

24. Front page story about the Clintons and regulatory capture NYT: http://www.nytimes.com/2016…Stigler freshwater economist. [1][1] https://en.wikipedia.org/wi…

25. 8 years is to long. I will agree to 2 years if you support my pet project.Decent idea but might be friction and end up having even less capable people work in the government (as if that is possible to over exaggerate).And doesn’t this then become an illegal non compete? Even if law my guess is Scotus wouldn’t hold it up.

26. Are taxpayers going to be excited to pay regulators an 8 year gardening leave? Otherwise no sane individual would ever take that deal.

27. Glenn Reynolds advocates for a revolving door surtax. I am for it. I’d like to see government significantly smaller-no regs needed. Charlie, you might be becoming a free market Liberal a la Friedman! I agree 1000% with you.