Dubai Government To Disappear Because Of Blockchain Tech?

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The Cryptoverse

5 min readSep 24, 2018

On Today’s Episode of The Cryptoverse…

You may already be aware of the government of Dubai aiming to become the world’s first blockchain powered government by 2020.

I say I hope they know what they are doing because this is a one way trip.

Once everyone gets used to the certainty and transparency that blockchain technology provides, the government won’t be able to go back to privacy if they don’t like it.

Watch or listen to the episode right in the article!

Episode Transcript & Notes

And just to be clear I’m totally in support of the government moving all their services onto a blockchain.

The latest step they have taken is DubaiPay which is an online payment portal using blockchain technology for real time reconciliation and settlement of transactions.

Their goal is to increase the efficiency of the government.

Again, the ultimate end to that process would be to end up with little or no physical government at all and govern everything autonomously using a blockchain.

That’s why I said I hope they understand that and are happy to move in that direction.

The only thing that makes me question it is that organisations don’t generally undertake projects that end up making their organisation irrelevant.

Maybe they won’t go that far. Maybe they’ll stop at the point where there’s still a small government organisation and have the rest of it automated.

What is the ultimate benefit to Dubai of doing this though?

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Continuing With The Show!

In my view, they are making Dubai an increasingly seductive environment for entrepreneurs to start businesses there.

Governments have everything to do with how appealing it is for companies to setup in their country because governments set the laws, tax rates and regulations.

Governments are also the organisation you have to register your company with and report financials to.

The better deal the government offers to being based in their country, the more companies will want to be based there.

As ever in the world of cryptocurrencies it’s all based on incentives.

That is one of the biggest lessons I have learned from the cryptocurrency revolution.

If you want a group of people to exhibit a certain behavior, the only sustainable way to do it is to create an incentive. Trying to get people to do things by force is ultimately doomed to fail.

Thinking you can somehow brainwash people into letting go of their self interest is going against nature. So don’t try. Appealing to their self interest in such a way that they do what you want them to do, by giving them what they want.

In terms of which country you choose to setup a company, the founders want to make the most money possible with the least amount of effort.

If Dubai becomes the place that offers the best balance of tax rates, laws and ease of setting up and reporting to the government, it will no doubt increase the number of businesses that go there.

This is my whole philosophy on tax.

The lazy government approach to increasing revenues is simply to keep increasing the tax rate, taking more money from the same people.

That is ultimately doomed to fail because one by one the companies making the good money will reach their limit and leave the country, thereby causing the government to lose ALL of that tax revenue.

That’s what happens when you get greedy and try and take the money by force.

By contrast. a government could generate way more tax revenue by taking a smaller percentage of a much larger amount.

Say for example if a government had a 10% tax rate across the board.

It would be much better to take 10% of $10 trillion than 50% of $2 trillion.

And even if the government ended up with less money overall, the country would still be more prosperous because the government would have to leave more services to be provided by the free market.

So whichever way you slice it lower taxes are better for everyone.

One thing I should say is that Dubai in particular are able to offer things like zero income tax because the government is largely funded by oil revenues which is something few other countries can rely on.

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Outro

And that’s all I’ve got for you today…

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Other than that I’ll be back with the next episode of The Cryptoverse, so until then it’s me Chris Coney saying bye for now.

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