Blockchain Nations: A New Look at the Governance System
The world as we know it is changing rapidly. Largely thanks to technology, globalization is already happening, the digital nomad lifestyle is trending, online work is taking over, and it seems like we will start erasing borders sometime soon. And with the emergence of Bitcoin and the blockchain, some of the most inspiring and rebellious individuals discovered a new way to organize the governance structure that could become a perfect match for specific groups of people. If anyone can create their own currency, why not create a nation?
When you think about it, nation states are quite a young concept that has been around for only a couple of hundred years. The idea of cultural boundaries matching political needs doesn’t really work that well in practice. With the rise of globalization, it became even more obvious that a universal governing system is unrealistic: our world consists of a multitude of nationalities and minorities that have been migrating and, at the same time, following their own laws for ages, so a one-size-fits-all model cannot possibly satisfy everyone.
But is it possible that blockchain can offer a legitimate alternative to the current imperfect system? What is a crypto nation and can it be the answer? Let’s take a closer look into the world of crypto anarchy, cyberstates, and pirate utopias.
Bitnation
Founded in 2014 by Susanne Tarkowski Tempelhof, is a pioneering project dedicated to reframing the established governance system and suggesting a fresh alternative which they call Governance 2.0. It is the first Decentralised Borderless Voluntary Nation or the Pangea Blockchain Jurisdiction.
By combining smart contracts, peer-to-peer mediation, and arbitration (powered by an AI-curated reputation system), this new blockchain jurisdiction gives anyone the opportunity to create crypto nations and crypto communities all over the world. It may sound odd, but creating your own nation starts with downloading an app. Bitnation uses an encrypted chat as their main user interface as no agreement can be reached without talking. Technically, it’s a ‘built on an off-chain mesh network’ for creating smart contracts. And even if you happen to end up in a third world country or your internet connection is far from great or almost non-existent, you will still be able to participate.
At the moment, only the Ethereum blockchain has been integrated, but the team will introduce other blockchains in the near future. The mesh network allows users to choose between various third-party blockchain services contributing to an effective competition model. Basically, you can already get notarized services for an incomparably low price with Bitnation, like registering an ID or even a birth. Or how about getting married on the blockchain using a smart contract?
The reputation system, as well as contract enforcement mechanism, is driven by the XPAT ERC20 token. Users can also receive sub-tokens in exchange for their contribution: making and completing contracts, arbitrating disputes, building nations and communities, and developing and updating smart contracts. When you get enough sub-tokens, you can exchange them for EXPAT. It’s also interesting that users are not allowed to rate each other to exclude the possibility of popularity contests, that’s why AI does this job for the people.
Although the whole concept of Bitnation’s united crypto community may seem rather anarchistic, it’s not looking for a fight with governments. Their idea is to become ultimately better and provide better and cheaper services, and become an alternative people would eventually want to choose.
Estonia E-Citizenship
Apparently, not all governments see virtual governance as a threat. Estonia is one of those thinking and technology-oriented countries that has already partnered with Bitnation to offer blockchain notarization services to its e-residents.
The country’s e-residence solution is a perfect example of how governments can endorse and simplify international business. Anyone can apply for Estonian e-residence, register their company, sign documents, open a bank account, and accept payments entirely online. E-residents can then choose between a variety of service providers from accounting and legal firms to virtual office providers and banking solutions. And by applying the blockchain, e-residency has every chance to drastically change the way we control and authenticate identity data.
Liberland and The Floating Island Project
When trying to use the blockchain and cryptocurrency to set up a new government structure, different people apply different approaches.
One of those so-called crypto states is the Free Republic of Liberland, a self-proclaimed sovereign state located between Croatia and Serbia. The story behind Liderland sounds almost like a movie plot. Neither Croatia nor Serbia had claimed a seven square meter piece of land between two Balkan countries on the west bank of the Danube River. For years it remained uninhabited until a former Czech politician Vít Jedlička proclaimed the territory to be an independent state and elected himself the president.
No surprise that it thrilled neither of the two Balkan countries, and Jedlička was arrested for an illegal attempt to enter the disputed territory. So how exactly it is connected with crypto, you may ask. Because of the fact that hardly anyone officially recognizes Liberland as a state, traditional donations in fiat currencies are clearly not an option, so the rebellious republic accepts Bitcoin, Litecoin, and Bitcoin Cash instead. Additionally, the official currency of the crypto state is Liberland Merit and we must admit that the dramatic story of Liberland has managed to capture the minds of crypto libertarians from all over the world.
But Liberland is not the only freedom-seeking cryptocurrency state that is looking for cryptocurrency donations. The Floating Island Project , the brainchild of the California-based non-profit Seasteading Institute and Singapore-based startup, Blue Frontiers, promotes the idea of sustainable floating cities in French Polynesia. All funding is raised via crypto by Blue Frontiers without using any local or French taxes. The funding is powered by the use of Varyon, an ERC20 token. According to the plan, they will put up a number of eco-friendly island-like platforms built-up with houses, offices, shops, and public spaces.
The philosophical idea behind the project is to make governments act as services providers instead of holding a monopoly on the land and establishing their own rules. However, the further development of this grandiose project remains uncertain as the French government has used the fact that the agreement between French Polynesia and the Seasteading Institute has expired and stepped away from the initiative.
The Bottom Line
We can hardly deny that the existing governing model is far from ideal, to say the least. Technological progress and globalization on one side of the scale together with a third-world countries’ population deprived of civil rights on the other, beg to take action. Blockchain cannot possibly be the sole answer as the technology itself obviously has its limits and cannot be treated as a magic pill.
However, when you use it wisely, it may become a powerful tool for establishing a healthy environment in which governments would have to compete with other organizations and communities for the right to provide security and legal services for people all over the world regardless of their location.
Unfortunately, there is a big obstacle in the way of this bright future in the form of governments. As is typically the case, these gigantic bureaucratic machines with people in charge often do not have our best interests at heart, wishing only two things — more money and power.
It is yet not clear what can become a driving motive for the world to change and put together these two forces: authorities and blockchain activists. Perhaps, crypto states should figure out their own stablecoin-like approach that will satisfy governments and help take the first step towards new reform.
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Originally published at https://blog.lumiwallet.com on July 4, 2019.
