Cryptocurrency Innovation is Leaving Governments Behind – Article by Martin van der Kroon
Martin van der Kroon
Technology is leaving governments behind, and we should be on-guard that they are scared.
Nobody will be surprised by the phrase that ‘technological and scientific innovation is growing exponentially’. This is not even a new notion. What is new is the routes it will take. Predicting the future is really difficult, hence the gargantuan task the U.S. Transhumanist Party attempts to undertake by anticipating the possibilities. Here the U.S. Transhumanist Party might also fail at times, but we try, we try hard, and do our best.
We can also see that the vast majority of governments are well behind on technological innovation. Cryptocurrency has been around for a while, but governments for the longest time have brushed it off as some niche make-belief method for transaction. Now that cryptocurrencies are starting to sprout like weeds, and more people start using them, paying with them, trading them, do we see various governments’ responses.
Small intermission: In an ironic twist of fate, cryptocurrency is based on trust, a notion brought to life through the Nixon Shock in 1971 when the U.S. Dollar was decoupled from the gold standard. Allegedly part of the reason was because the Netherlands was converting U.S. Dollars to gold to add it to their own gold reserve. Hence, cryptocurrency is in a way an (r)evolution of Nixon’s Shock, just not how governments might like it.
Governments are reacting in a manner of panic. Suddenly the United States, the European Union, and China all want to roll out digital versions of their respective currency. As cryptocurrencies of the blockchain are decentralised it means governments have no control over these currencies, cannot exert control with those currencies, might not be able to track and can’t control the flow of these currencies. One of their key tools of old-fashioned power is suddenly being threatened. It of course also threatens their revenue model, namely taxes.
At the same time they see an opportunity to tighten their grip, digital centralised currency can easily, and very specifically be tracked, analysed, blocked, frozen, wiped, and could even uproot and wrestle control from the banks. Mind you, a centralised digital currency in itself is not necessarily bad, but rather what those in power can do with it without proper controls in place. One country in particular might illustrate this (ab)use of power sooner than others.
The important aspect of introducing centralised digital currencies, which will happen, is to ensure effective, specific, and immutable restrictions on what control and exercise of power governments can exert, and privacy for citizens. That they will collect information is practically a given, although limits on that also ought to be advocated, but most important what can be done with that information. It is however essential that people are allowed to use decentralised currency, or the evolution of cryptocurrency. Large institutions in power have a tendency to gravitate towards stagnation, be it the Roman Empire or the British, unless they keep being challenged to change and innovate.
But why is this important? Aside from an unmitigated amount of privacy issues, and potential for abuse of power, such a system could be prone to malicious actors, or if the power goes out. It also becomes a problem for the human mind. Unlike how the ideal society is envisioned by those in power, people will exhibit acts of defiance, or minor criminal behaviour such as paying a neighbour for babysitting, or some minor repairs without reporting it for tax purposes, washing cars or selling lemonade at a stand. It might appear strange, but being able to do such things that defy authorities is important for the development of the human mind and creativity. There is a reason people become extraordinarily ingenious to subvert or find workarounds to actions that are deemed unwanted or undesirable, or just make it harder for those in power to achieve what they want.
Here cryptocurrency is a good example, along with encrypted messaging services like Signal, Element, and Briar, decentralised and federated networks like Mastodon and Matrix, and even decentralised alternatives to YouTube like Odysee.Governments might argue that the space of cryptocurrencies is a mess, with thousands of digital currencies out there, and that they are volatile. They’re right; it is a mess, for now. It’s the process of innovation and discovery. It will settle over time; some will disappear; others will grow, stabilise and be trusted. Innovation can be scary; believe it or not, the first train was scary, electricity, home-computers, the internet, all scary, and yet we now can’t envision a world without them. Governments at some point will, kicking and screaming, have to contend that times are a-changin’, but until then they will fight tooth and nail to maintain the status quo.
As a species we need this freedom to sometimes do and go where we aren’t ‘supposed to’. This is quite literally the first story in the Bible/Torah/Quran involving humans that exemplifies this need for defiance. We would not be where and how we are without defiance.