Cryto Firms As Governments?
We all realize that blockchain and cryptocurrency is in the process of disrupting a great many things. There are a lot of industries coming under attack from alternatives that are cheaper, faster, and more efficient.
In addition to industry, governments are having to adapt to entirely new business models. As we know, this is a slow process since most governments are trying to utilize regulations from the old model and force them into this new paradigm.
It obviously is not working.
There are, however, a few governments that are experimenting with new ideas. These are the ones that are forging new paths, which could lead to a great deal of success in their areas.
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Nevada is currently one government, led by the innovative Governor, that is attempting to establish some new concepts.
Steve Sisolak has drafted a bill that will allow technology companies, in the State of Nevada, to essentially become their own governments. This includes cryptocurrency firms.
The bill carries that idea that companies which own a lot of land would be able to operate similar to a country government. They would be able to impose taxation, form school districts, and provide services normal to local governments.
This would be done through opportunity zones, a model that has been used to try and stimulate economic development, often in rundown areas.
The Review-Journal, citing a draft of the legislation that has not yet been sent to the Nevada Legislature, said the proposal would require companies to own 50,000 undeveloped acres of land outside a town. They’d also need $250 million in the bank and to dedicate $1 billion in spending across 10 years.
This is an interesting proposition which obviously does not focus exclusively on blockchain firms. According to the above linked article, the target will also be AI and Robotic firms.
It is opening up an entirely new concept. As it pertains to cryptocurrency, this is very interesting in that it provides a geographic area whereby a currency could be the main use for transactions. Obviously, if a firm met the requirements, they would be free to utilize whatever currency they desired. A firm would likely start their own, which would help to foster even greater adoption.
At the same time, it also brings up the question of DAOs. A company is really nothing more than a legal entity, created through the filing process. Thus, it does not exist but "on paper". However, that is given a great deal of power as we know.
Today, companies are run by people. They are headed up by a Board of Directors along with officers. In small firms, they all might be one but they expand as the firms get larger.
Automation is changing the landscape of our world. The introduction of blockchain based smart contracts enable a firm to exist completely without humans. As they say, "code is law".
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If the Governor's proposal is passed, what will this mean for technology firms that exist without people. It would then be possible to essentially set up an autonomous government with each community member owning some stake. There would be humans involved in the process of coding, voting, and other activities but the basis of the "government" would be code.
This is a path that blockchains with foundations could pursue. To start, the foundation would operate as the "company". However, over time, once established, the entity could be converted as the code is expanded to take greater control of the government. Couple this with automation and robotics and we could see a "city government" that is mostly autonomous.
For example, the Ethereum Foundation is sitting on top of a lot of ETH. This has enough value to meet the requirements of the bill. If it decided to become a Nevada "government" by buying the necessary amount of land, it could establish an entire physical community that is tied to what is being developed in the digital world.
Of course, there is a risk in all this. If we are talking about companies like Google, Apple, and Facebook, we could see them getting even greater power. One defense, at least in theory, is they do have to answer to the government on certain matters. This would be gone with the new proposal.
That said, one is not forced to live in said area. Since this would be private land purchased, it would be up to those who are involved with those companies to decide whether they want to be a part of that system. Obviously, those who are not for Facebook might not opt to move there.
Nevertheless, it would be of benefit for blockchain based entities to get involved. Those that are decentralized in nature could be established in such a way as to meet the requirements. Over time, the decentralization process could spread once everything is established.
This could be the beginning of a new form of physical governance. At some point we are going to see the merging of the physical with the digital. How that looks remains to be seen. Here is one idea that starts with the company as opposed to trying to change government.
We will have to see if this bill passes. Nevertheless, it will trigger a lot of conversation.
What are your thoughts? Let us know in the comment section below.
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https://twitter.com/taskmaster4450/status/1358057874115674115
This is becoming relation cause and effect.
In the long run it will form a synergy to bring
more revenue for the state.
Crypto should welcome this shift for protection.
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There are a lot of moving pieces right now which makes things so interesting.
Over the next couple years, the pace will only increase as more is being developed.
Some governments are getting very proactive which will only serve the crypto community well.
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I believe that companies anyhow rule governments and countries so people getting around common beliefs even within the digital work is a possibility. That will have its challenges, but what a revolution would that be...
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That is true although a change in political winds can work against them.
Under this scenario, they are the government so they have full control.
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Embracing change with new ideas looking for positives amongst the confusion. I don't really understand and see where this is heading right now and if things like this will work or not.
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Hard to see where a lot of this stuff is heading since it is innovation and experimentation. We honestly have no idea what will work and what wont.
The key is the discussions are opening as more ideas are tossed out there.
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Very true as the more this opens up the path should become clearer. The pace at which things are changing is mind blowing as if you had said this 5 years ago you would be seen as some nut case. Maybe even today some are looking at these ideas side ways as this is so far out of normal thinking.
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I did say stuff 5 years ago and people thought I was nuts.
Today, they still think that, just not as much.
We are starting to see things clearer and the trends are becoming more obvious. It is up to people to hop on these trends as they start to appear. That is the key. Crypto is just one area that is going to branch out into many different areas of life.
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Lol. Can be seen as a compliment depending on how you look at it. The thing is anything is possible so nothing is nutty depending on how you look at things. If you had said that we would be having lock downs and businesses closing 2 years ago people would have said you are off your rocker. Covid has changed so much and sped up so many things that we should actually thank it and see it as a blessing. Covid has transformed crypto and I reckon could have halved the adoption time.
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I came across an idea like this in A book titled, homo Deus, which spoke about corporations taking the role of government. A world controlled by the technocrats. However, with blockchain technology this can occur without centralising power, which is best for humanity. This paradigm shift is inevitable and we see it play out in the next decade or two.
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There is no doubt that technology is taking over. The only question is who will be in control of said technology.
Right now it is the technocrats which, as we see with Facebook and others, is not a good thing. We need to have people owning a stake in the technology, something that government cannot do.
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The onus now is on the people to decide how they want to be governed going forward. Yesterday I got a mail from Google detailing all the major places I visited in January. That is scary. Many might say this is good for security reasons but that's too much information. Decentralization is the way to go and sooner or later the masses will begin to see this too.
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That is true. We need to get the infrastructure in place. Google and the likes had a big jump on the decentralized world. We are having to play catch up.
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One issue I see with this is that giving a crypto a physical corporation status opens it up to liability. This liability includes 1) taxes and 2) lawsuits. This means it would now be considered plausible to go after specific crypto because it would allow them to take away land. At the same time, I only see an accounting nightmare since the government would want a part of their taxes so how would we resolve this would the rest of the world that wants to tax crypto.
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If the entities were deemed a government how would you take their land? It is like now, you can sue a governmental entity but you dont get their assets. You might get a judgment which pays some money but most times it is really how they are operating.
As for taxes, they will be levying them as opposed to paying them. They will also be providing the services that local governments usually do.
Of course, as always the devil is in the details. We will see how it turns out.
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True the details is what really matters and we do not have that. Personally I don't think they will give the crypto full control over the land. It would probably be similar to a lease so that is why I think they would try to take the land. Either way, depending on the details of how they write their contract, it can be good or bad for the crypto.
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I wonder if at any point a DAO could buy an island and start a new nation? Citizenship could be based on staking. The same token could be used for commerce and smart contracts. It would be cool if they could issue passports. Voting wouldn't be questioned; you either are a citizen or not. Such a government could appoint temporary citizenship. Let's say there is need for security, the DAO could delegate tokens to the talent until they have enough earnings to stake their own citizenship. There are so many possibilities and details to consider.
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If you are bridging the digital with the physical world, I dont see why not. Of course, will all of this be necessary in 30 years or will the nation-state, as a concept, be just about dead. Think about out immersion into the metaverse, what is the necessity of geographic boundaries? At that time, the networks we are operating upon is far more important.
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I'd be interested in seeing a small city run by a server. Government by API. Each citizen could have their own crypto ID. City councils can be elected like we elect witnesses. They'd be required to run a node. Any changes to the city code would require consensus and a hard fork.
Most of the mechanics of a municipality are record keeping. This could be done by a blockchain like Hive with some algorithms thrown in. Do you really need HR staff when you could code in sick leave, vacation, and all the other personnel stuff? With crypto ID, you don't even need to bother with social security numbers and such.
The other big component of municipal government is manpower. You need reliable people to patrol, put out fires, fix potholes, operate the library, etc. Departments could be operated similar to Hive Communities. Witnesses could appoint the directors, who would have admin power of the Communities.
Or, if you scale it up, state government could operate like the Hive blockchain with legislators being elected like witnesses. Then each municipality would operate a community within the blockchain. Some form of subwitness could be devised to run city councils.
It would sort out citizenships too. Many countries already offer citizenship by investment. So, to bring somebody in, you'd need to sponsor them with some of your tokens. They can grow their stake organically. Or, if they have money, they can buy a large stake. Of course, your vote varies with your stake.
I could see this working as a form of international identification. If the Citizen Blockchain has all your banking and serves as your identification, it simplifies swapping citizenships.
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Just thinking , in one side of world, government is banning crypto , curbing the financial independence of people and in other side of world government is giving so much independence to people in form of company.
Autonomy is required for progress and decentralization helps in maintaining transparency.
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There is a massive migration out of California towards Nevada for a reason. Nevada as a dessert is flourishing and this only because of the government.
Not to forget that Steve Sisolak has a strong business background, where he can see needs. He has seen that students need help and he did help them by blocking the raise of fees.
Now coming back to the proposal, the main thing is that is keeping money on a local level, requiring for investment there. Not many companies have $1 billion to spend and most are global, so it is a smart way to bring wealth in the desert. And yes blockchain foundations can benefit from it as they can get a good foothold in Nevada, making the legislation friendly towards them.
Will be interesting if the bill passes.
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damn that's sure innovative but as you say we don't know what might happen when Apple, facebook etc etc get in the same. Also, i made a recent post that somehow is similar to this about the mayor of Miami seeking how to integrate crypto in his city. He said there are 3 paths he wants to follow, paying local workers in btc, paying taxes and fees in btc or other ctypto and invest in cryptos.
How amazing news are these? So reading your post reminded me of this one and that we are getting faster and faster to mass adoption
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Everything the government gets its hands on has an obscure purpose working behind the scenes. However, at times it is necessary to learn to "coexist" in the same space as this enemy.
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