RE: The Goverment Is A Reputation System On Steroids
It is very expensive to set up jails, courts, etc. But anyone can start a new church, club, coop, company, or political party. Your reputation may be Trash with the Democrats, but you could be a god among the Republicans.
I think all can be quite expensive to found and maintain. it all depends how they are marketed. Jails for example can be expensive but can generate massive profits, especially when the convincts work for free. As for reputation, so far it has been demonstrated throughout history that it is all about early adopters.
Since each individual could simultaneously be a member in dozens of communities with a combination of positive and negative reputations no one community has control over an individual.
Communities though will have to compete and maintain a set of rules. Eventually all of them will come to follow some specific ones that will exclude the deviant ones. We see the same thing today with Facebook, Twitter and Tumblr all teaming up and agreeing with "hate speech rules". Even if they are in direct competition they inner networkings can handle sacrificing the outcasts that probably have accounts with all of them.
The free market will end up creating competition for the best community and the best currency. It would be like opening up a new virtual frontier. If you don't like the current systems, start a new one.
Which is exactly what most goverments offer right now. We have a planet with many different "markets". You can join any state you want if you follow some rules. The blockchain will only offer more solutions to the competition, it won't change the status-quo.
The only problem is when everyone wants to fight over control of an existing system rather than start their own. It is the entitlement feeling. The desire to steel the network effect created by those in power and desiring to have that power for yourself.
I think that is always the "problem"?For most is an inevitable path that has to be taken. This is how some things evolve and how some others die out.
Stop thinking in terms of "one system to rule them all" and start thinking in terms of "competition among systems".
I was never in favour of "one system to rule them all". If you check the comments below you will see that I answer this very specifically. All systems are good. Every single one. The question always is not of "what system is best" but "how a system is marketed".
All on-line communities seem to start out as, or degenerate into, a nomenklatura on the one side and most of the rest on the other, with a small rest group of oddballs being ostracised, so little competition there, for want of choice; if you vote with your feet, you'll never stop walking. Supposing that the "free market" will solve this is just as much magical thinking as assuming that a God will solve it. In countries, some nomenklatura may be more democratic, benevolent, open, honest, tolerant, etc. than others, but this is usually brought about by internal pressure, be it evolutionary or revolutionary, not by competition between countries. I expect more from criticism from within than from competition from without.