While Bitcoin has been described as the antidote to a corrupt financial infrastructure, the wider distributed ledger technology (DLT) ecosystem can be rightly described as a replacement for nation-states. Most people consider that DLT is going to disrupt specific industries such as insurance, housing, travel, social media, etc. While this is true, the overall government infrastructure is going to be overhauled through distributed ledger technology.
The case for nation-states
The case for nation-states was at one time obvious. They were an essential means of defense against other nation-states. Citizens of a particular nation-state would abide by a set of principles and values, and a series of services and amenities would be provided.
To obtain the benefits available in a particular state, an individual would have to pass the criteria, usually with lots of paperwork, and typically gain a form of financial incentive. Once a resident conformed to certain rules and standards within a nation-state, they could avail of certain services.
However, the vast majority of government services are now available without having to be physically located in a particular country. The equivalent of government services is being provided organically by independent market entities providing distributed ledger services. These services are not just surviving without government assistance; they are thriving in spite of widespread government opposition.
Why a nation-state is no longer relevant – education, finance, regulation, defense
There is quite a strong argument that the nation-state is obsolete. At one time, people were bound by geographical location, and they adopted the norms and values that were typical of a specific time and place. But with the rise of the internet and online learning, people are coming together and working on various projects, irrespective of ethnicity.
Education – Traditional schools tend to simply reinforce the norms and dogma associated with a certain country, but through online learning, students have more choice and freedom. People of similar values and views can connect online and contribute remotely. Traditionally, individuals within a particular country would have to adopt the values and principals of the surrounding neighborhood, as there were significant barriers to travel. This is no longer the case for a wide variety of reasons. Additionally, an accredited blockchain university is currently being established by Oxford academics, without any of the significant barriers to entry typically seen in upper-class English institutions.
Finance – The crux of a nation-state hinges on taxation and financial regulation. While there was a point when this was necessary, with the present levels of corruption in the industry that are well documented, this has been removed. Cryptocurrencies provide a safer and fairer system free from manipulation that is fast and free.
Regulation– The regulation of food and water is of primary concern in all countries, and there are many blockchain ICO projects which are aiming to monitor the supply line to ensure adherence to standards. Many of the industries can become self-regulating to a large degree. There are also multiple ICOs geared towards environmental quality, an area where the government has a non-existent track record, aside from increasing oil consumption without looking towards alternatives.
Defense – With the decline in overly hostile relations between nation states and a more peaceful planet, there is little justification with the defense spending. It has become common knowledge that the USA and NATO are simply provoking the rest of the world with unprecedented aggression. The military industrial complex needs to be shut down to prevent a war, as opposed to being kept going in case of one.
It’s already happening with distributed ledger technology
What we are now witnessing is that, slowly and surely, all the services and benefits provided by the nation-state are being removed and replaced with distributed ledger alternatives. Which leaves us to ponder the justification of wealth confiscation typically in the region of 50% for individuals, though often 0% for banks and 12% for corporations.
The monetary system is being removed from government. Turkey and Venezuela are migrating towards Bitcoin, regardless of the efforts of politicians to enforce capital controls. Iran and others will soon follow. What is interesting about these bank-induced hyperinflation scenarios is that the civilians do not have to leave the country. The currency no longer functions, and neither does law and order. So they are turning to a new way of living without government intervention and without leaving their homes, as would have been a historical necessity to avoid a crisis.
In terms of business regulation and incorporation, it is possible to incorporate in Estonia with its e-Residency program. This is going to become more common moving forward, as physical presence becomes less important. It is now possible to travel and enjoy all incorporation benefits.
The stranglehold that Google and social media giants have on user data is being broken up. Nation states failed to resolve (and in many cases exacerbated) the problem. As a result, we are seeing multiple distributed ledger projects which are geared specifically towards giving data back to consumers. There are too many examples to list, but DLT is rapidly providing all government services with a few obvious exceptions, such as policing.
How long does the nation-state have left?
It is a little premature to say that the nation-state is obsolete, at least right now. But what we are witnessing is more options for people to leave the nation-state, and its system, for decentralized options. The necessity for a nation-state is drastically reduced, and this trend is accelerating as technology advances and time/distance/verification barriers are broken apart.
The obvious social disintegration of the USA along with the hyperinflation scenarios in Turkey and Venezuela are further signals that ties to nation-states are lessening, and that states are simply not doing their jobs properly. An increasing number of decentralized autonomous organizations (DAO’s) are emerging which remove the need for states. There are already floating island projects underway based on a distributed ledger infrastructure.
The nation-state is here for now, but we are certainly in a transition into something much more efficient and globally accessible. Sometime in the not so distant future, people will choose their state equivalent, their rules, and their regulations, without being handed a set from birth.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.