Governments to “adopt” blockchain
Many innovations, at first considered great, turn out to be somewhat destructive to humankind, outcome-wise, once the government has its grip on it. I have been thinking that blockchain and crypto will not escape the same destiny if a government would adopt them as a part of its monetary system.
For any government, the ability to print money and charge its citizens for various types of economic and social activities is considered to be essential for a specific country’s economy and society’s prosperity, as well as its survival. In essence, the government makes the budget where it decides how much and where money will be spent, covers the budget deficit, if any (and as we know most of the time it’s likely there will be one) by printing money or borrowing it. Governments are also run not by pure technocrats, but rather public officials who got elected by people and have certain economic and social agendas. Thus, government spending is always, to say the least, biased.
In other words, the government will always need to print money and make the budget to enforce its policy with various monetary rewards to succeed. If the government cannot increase its military budget for whatever reason, its existence can be threatened. That is one example of why many governments of a specific country can’t afford to lose control of money printing and spending. There are many other examples to prove this point as well. Thus, any cryptocurrency and blockchain technology if to be adopted as part of a specific country’s monetary system will have to be based on the government’s sole control of the issuance of the cryptocurrency of that blockchain and the ability to control the spending of it. This, of course, would require a centralized blockchain and most likely unique types of smart contracts that will lack transparency, at the very least.
That by itself doesn’t paint a very optimistic picture, at the first sight. However, it opens very interesting future possibilities to the actual improvement of economic activities such as spending, for example. Take Japan: deflation put one of the strongest booming world economies for years on the back seat of world economic growth. The sole reason was the Japanese population saving money rather than spending it. Now let’s imagine that a digital Yen would be delivered to the Japanese population via electronic wallets where those funds have specific rules by when they have to be spent and even on what type of products those digital funds can be spent. After the deadline expires, the funds will be “burned”. This kind of new monetary system, where the government can speed up economic recovery by delivering funds to those eligible to spend them without mediators and with specific rules applied, can change the speed of any economy’s growth and efficiency very rapidly.
All you need to have is a centralized blockchain with access to every participant, burn protocol, and a complete lack of transparency, yet with many use cases. Sounds like a typical government ecosystem, yet with a future twist.