I recently stumbled across an article by Justin Danneman, published on Squawker, entitled China’s Cryptocurrency NEO Will Change the World As We Know It.
Here are a couple of quotes from the article:
“One blockchain to rule them all,” is no longer an obsolete concept in China.”
“If blockchain can scale to the point where governments can ban cash and record every transaction, expect instant tax collection, loss of privacy, threats of negative interest rates, and other cash confiscation schemes.”
(Read the full article here).
Upon reading that article, I had to wonder:
Nearly every government program conceived and touted as helping the people ends up being used as a tool for tyranny, enriching and empowering the government while impoverishing and enslaving the people (I know, I know…that’s the real intent, the true nature of government, surprise surprise, but bear with me here…)
Cryptocurrencies, and blockchain technology, as I understand them, were developed specifically to end the people’s dependency on government—both for their currency, and for supervision/regulation of hierarchical organizations. Cryptocurrencies aside, I have often speculated blockchain will be the technological solution to the problem of the state.
The problem with hierarchies is, you can’t have a perpetual hierarchy. Eventually, someone has to be at the top—and those at the top inevitably use their power, wealth, authority, and relative unaccountability to [gasp!] benefit themselves, at the expense of everyone else. Crime and corruption thrive at the top, simply because those at the top can get away with it. Just look at cops. Look at politicians. Look at Washington. These are all fine examples of people limiting themselves and controlling their behavior in the absence of market forces, financial/economic incentives, and social accountability.
Blockchain, however, creates a permanent public ledger which is accessible by all—so every single traction is subject to scrutiny and accountability by everyone within the organization. Suddenly, everyone has to behave themselves, and the need for multiple levels of supervision—i.e., a managerial hierarchy—simply vanishes.
On the other hand, if governments can seize control of, or develop their own, or outlaw other Cryptocurrencies and blockchains…have they just been handed the very weapons that were initially developed to de-necessitate this “necessary evil”, the state?
A frightening prospect indeed…
“Government, even in its best state, is but a necessary evil;
in its worst state, an intolerable one.”
~ Thomas Paine