Blockchain is the New Democracy
The democratic ideal of rule by the people is coming full circle. The direct democracy of 5th century BC Athens–the world’s first–was an anomaly that nonetheless had a seminal effect on geopolitical development, despite its short lifespan of about a hundred years.
Many have cooked up napkin constitutions for proposed blockchain-based governance systems. Abortive attempts can be found detailed on blogs and news sites. The possibility of software-driven self-enforcing governance shared within large interest groups is tantalizing but no one so far has been able to claim an ascendant meme in blockchain governance to the extent Bitcoin has with assets. Even Vitalik Buterin’s Ethereum, which has “smart contract” governance built in, has yet to prove suitable for the care and feeding of a nation state.
But ETH has gone further than any other token ecosystem toward putting direct democratic power into the hands of users. Yet it lacks any functionality that addresses directly the plight of the poor, which if we aren’t careful, could further depress their economic isolation. A ground-up design for voting and governance is a more likely winner of the contest for the creation of Governance 2.0–the killer app that will join tokens, the blockchain, and the body politic.
No one has ever succeeded in designing and defining a functioning large-scale economic infrastructure from scratch, with the arguable exceptions of the Soviet Union and other totalitarian states that have claimed collective rule. Most other models have developed in ad hoc fashion. Many historical and fantasy-land economies have borne the fatal flaw of central planning and functioning. They have had no remedy for catastrophic inflation and ill-measured currency manipulation by political forces.
The United States’ representative democratic format creates some of the same deleterious effects as other centrally planned economic governance systems. The Federal Reserve of the U.S. centralizes control of the economy with two powerful tools; it sets the interest rate of overnight loans to banks, known as the “discount rate,” which in turn is marked up and offered to businesses and then the public. In recent years these rates have been relatively low due to slower-than-desired economic growth keeping inflation in check.
The second tool of the Fed is the money supply. Complex formulas tell the Fed how much money to print, in order to “grease the wheels” of commerce. This tactic has been seen as progressively less effective over recent decades.
Decentralization onto the nodes of a blockchain is a new alternative financial and fiscal solution for the creation (mining and issuance) and distribution (by transaction or grant) of funds for both progressive elites and the unbanked poor alike. Simply put, crypto is presenting a monumental opportunity to undo wrongs in both the traditional economy and the emerging ecosystem of specialized currencies and other token stores of value, including some that may at any juncture spring forward and go for the jugular vein of the current failing political system of vulnerable and nonproductive representative “democracy” that frankly smells more like an oligarchy at this point than a true democracy.
No sea change in control of the economy can happen without an equivalent replacement of the failed system of representative government that has repeatedly brought social injustice and severe economic stratification to the people of Earth’s dominant pseudo democracy, that of the U.S.
My idea of a decentralized direct democracy in the U.S. would include:
Replacing the U.S. congress with liquid democracy agents hired and fired by stakeholders on an at-will basis.
Allowing a straight up or down vote by the entire polity on issues of the greatest interest and importance such as waging war, levying taxes, picking judges and setting and evolving the rules of the democracy itself.
The abandonment of central banking in favor of crypto token stake and liquidity controls shared among all.
The formation of a Universal Basic Income that pays all citizens an equal bounty as consumer participants in their own economy. In this manner, the poor are lifted by the success of the entire U.S. enterprise and rich folks will have no grounds to complain because they will receive the same amount of national bounty as everyone else.
- Constitutional amendments to cover all of the above.
Most crypto participants recognize the need to include the unbanked in the creation of “magic Internet money” and the new direction in governance as a whole. Universal Basic Income as a special class of blockchain currency will become essential as the already-privileged enjoy greater income and social status due to the advent of cryptocurrencies. Those of us existing and profiting by having one foot in the fiat economy and the other in the new economy have a responsibility to include the underprivileged in the economic miracle we already enjoy.
First, we take on the unfair U.S. system of economy and governance, then we take on the world.