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Blockchain technology, a tool to strengthen democracy

Blockchain technology, a tool to strengthen democracy
Blockchain technology, a tool to strengthen democracy

Bitcoin, blockchain and decentralization

Within this set of new technologies that have emerged in the last decade, the so-called stands out. blockchain or Blockchain, which in simple terms is a decentralized digital ledger that securely records transaction data across numerous computing devices distributed over the network.

Because its popularity has been fueled by the rapid degree of global adoption of bitcoin, possibly in the collective imagination the concept of blockchain is associated exclusively with anarcho-capitalist, libertarian and cyberpunk currents, different from each other but united by a common denominator: their rejection of centralized entities of any kind.

The ingenious The original design of bitcoin is based on on a few effective pillars: strong economic incentives for those who validate transactionsits decentralized nature, the immutability of its records, its pseudo-anonymity, the possibility of making transfers 24 hours a day, 7 days a week to any place on the planet, as well as its limited and predetermined issuance.

For its creators and promoters, Bitcoin is much more than a speculative asset; it is the standard-bearer of a new and still diffuse model of society.

The document published by Satoshi Nakamoto in 2008 that gives life to bitcoin expresses in its first paragraphs one of its objectives: replace (centralized) financial institutions so that this new asset can be transferred securely between peers without intermediaries.

But the story does not end there. The limited and already predetermined issuance of bitcoins that maximalists describe as “deflationary in nature” also points to to counteract what they interpret as the mother of all evils, the uncontrolled and inflationary issuance of money by central banks.

Broadening the focus and in the same team of questioned centralized entities play The big technology companies, for example, the so-called most popular social networks globally, that use artificial intelligence and big data tools to make a profit, processing and monetizing large amounts of information that should be private.

Defects of centralized entities

You don’t have to be a libertarian to realize that some of these arguments against centralized entities have some merit.

Traditional financial institutions, beyond the heavy regulatory burden they face, They have not known how to adopt and adapt new technologies that they allowed him improve user experience in financial services such as payments, credits or investments.

Just as an example, even today making cross-border transfers in traditional banking can take days when blockchain technology allows these movements to be carried out almost immediately.

For its part Some central banks and governments have operated in recent years by privileging sectoral interests. instead of acting responsibly for the benefit of the majority of the population.

Likewise, the profitability of large technology companies, that live in applications on our cell phones, has grown exponentially at the expense of violating privacy, manipulating and developing algorithms that generate addictive behaviors in the entire population, especially in the youngest

Diverse views

It is in this fertile field for the disenchantment of the population that libertarian ideology takes hold by proposing a solution. as simple as it is dangerous: gradually eliminating the actions of the State which they describe as tyrannical, whether it is China, the United States, Norway or Argentina.

The obvious defects in the functioning of centralized institutions cannot be cured by an absent State or an omniscient one. Maximalist absolute anonymity is a step towards the disintegration of the State which can only lead to a more chaotic, violent society, dominated by the powerful in power, excluding the vast majority of the population.

Therefore, in this scenario of new demands from society, it is necessary to find a balance between the existence of a present democratic State and the maximum possible respect for privacy and individual freedoms.

It is in this framework that technologies such as Blockchain can play an important role in redefining the concept of democracy, helping that citizens are empowered getting higher levels of self-determination, knowledge, participation, control and trust in their relationship with public and private institutions.

Blockchain and the crypto ecosystem

While the deployment of technology blockchain It originates in the bitcoiner universe, antagonistic to the public sector, its multiple subsequent developments have allowed it to become a tool used by governments to promote innovation, make state action transparent and efficient.

Following the consolidation of Bitcoin, cryptographic networks with new logic and functionalities began to emerge in the crypto universe. The most relevant was the Ethereum network based on so-called smart contracts, self-executing programs that navigate on these platforms.

From blockchains and other similar distributed ledger technologies A vibrant crypto ecosystem was built with numerous layers, decentralized (and not so much) platforms, digital products (called tokens) and operations that impacted all sectors: productive, financial, social, artistic, health, educational and politicalproviding concrete solutions.

In this scenario, it cannot be lost sight of that, as happens in the physical world, blockchain is used in the digital environment also to commit criminal maneuvers such as scams or frauds of all kinds (including tax fraud). Its lack of regulation and pseudo-anonymous design facilitate the possibility of rapidly mobilizing funds transnationally outside the radar of States, greatly complicating the actions of justice in the face of increasingly sophisticated cybercrimes.

However, the ease with which tokens, digital representations of any asset, can be transferred on these platforms and the ability of blockchain technology to create immutable records opens up endless possibilities which, depending on how they are processed, can either weaken or help strengthen modern democracies..

Technology for democracy.

There are numerous examples of how, through public (and private) initiatives, blockchain technology can strengthen our institutions.

  • The blockchain It can be a secure tool for digital identity management, being able to store, concentrate and validate personal information of all kinds. When it comes to privacy, new tools such as so-called “zero-knowledge” technologies can help verify people’s identity and personal data without exposing such information to prying eyes.
  • Blockchain can help these new technological democracies to make voting systems transparent or Thanks to its traceability, it allows citizens to know exactly where their taxes are being deposited. being able to follow online each expenditure of the State (whether national, provincial or municipal) at the same time that it is executed through immutable platforms.
  • Blockchain can be used for public digital currencies to facilitate cross-border transactions and help further financial innovation and inclusion through smart contracts.
  • It can also automatically issue all types of public record certificates: birth, marriage, death, educational certificates, driver’s licenses. It can keep records of movable and immovable property.as well as implementing secure purchase or sale operations of any of these assets digitally and immediately.
  • It can be used for improve the functioning of the health system Storing and concentrating with high levels of privacy the complete medical records of each citizen in a single place and making the citizen the owner of that record to display it to whomever he or she wishes.

There are many specific cases of blockchain use in the public sector globally.in digital nation states such as Estonia, it has debureaucratized procedures, the Basel Bank for Settlements (BIS) is working with a group of countries on a project called “mbridge” to make cross-border payments more effective, Brazil in collaboration with the private sector is creating a public digital currency (the DREX) as an innovation tool, and even in our country it is used with an incipient degree of development in initiatives such as the Argentine Federal Blockchain or QuarkID in the Autonomous City of Buenos Aires.

Conclusions

The new technologies They constitute a reality that translates daily into new patterns and ways of relating. The effective application of technologies is not neutral. Without giving them meaning, they can alienate and impoverish us.

That’s why it’s necessary forge leaders capable of interpreting and channeling the profound cultural change generated by the digital society in the population and especially in young people.

Blockchain technology can be used both to further degrade our coexistence and to build societies more empowered, democratic and participatory, reducing the asymmetry between administrators and those administered.

Former President of CNV and Professor of Fintechs, Bigtechs, Cryptoassets and Digital Currencies. University of Buenos Aires

Source: Ambito

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