The Digital State

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The Prime Minister of Malta is all in on blockchain.

Joseph Muscat gave an impressive speech to the United Nations during their meeting in New York City last week. Here are some of the notable comments:

  1. “Blockchain makes cryptocurrencies the inevitable future of money.”

  2. Muscat said blockchain can promise “that no one is deprived of their legitimate property because of compromised data,” that corporations “become more accountable to their shareholders,” and that states “move from hoarding information on their citizens to regulating an environment where citizens trust the handling of their own data.”

  3. Muscat referenced those that have taken negative stances against blockchain and cryptocurrencies when he said, fighting technological advancement was “as myopic as those advocating for horse carts not to be replaced by automobiles.”

  4. Muscat is interested in those that “pair the new digital economy with a new state — a digital state.”

This idea of a “digital state” is interesting to think about. Imagine a country that had the following:

  1. Entire money supply composed of digital currencies — Citizens would have transparent insight into how much money existed, what monetary decisions were historically made, how the system was designed, and what was supposed to happen in the future. If the currency was Bitcoin or a similar digital currency, the disinflationary nature (and eventually deflationary nature) would increase each citizen’s financial position over time. Lastly, citizens could see every financial transaction completed by their government, which would hopefully lead to decreased corruption and bad decision making.

  2. Digital identity system — Citizens could remove their reliance on physical identification cards, governments could increase the accuracy of identification, and it would become much easier to immediately detect fraudulent use of a person’s identity.

  3. Digital supply chains — Governments could track the food supply, medicine, and other essential supply chains. An example scenario would be during a food recall. The government could immediately identify what food is “bad,” where it came from, where other affected foods currently are, and quickly remove the affected foods from the food supply without having to recall a large amount of unaffected foods.

  4. Digital corporate governance — Rather than trust humans to conduct proper accounting, reporting, and governance, regulators could require companies provide relevant data in near-real time to the proper organizations and/or investors. It may be overly aggressive to have sensitive data presented in a public nature, but it wouldn’t be hard for a regulatory body to create algorithms that identify fraud or red flags much more efficiently than they do today.

  5. Digital voting — Every citizen should have the opportunity to vote. This becomes easier with a secure digital voting system that someone could do from their phone.

  6. Digital health system — The bureaucratic nature of healthcare in most developed nations leads to outrageous expenses. There would be significant financial impact by digitizing numerous aspects of a national system. Additionally, patients could be given more transparency and control over their health data.

These are just a few ideas of what a digital state could look like. In the perfect world, technology would increase a nation’s efficiency, security, freedom, and transparency, all in an attempt to attract citizens.

Remember, blockchain and crypto are an assault on paper and bureaucracy. It is about time nation states join the party.

-Pomp


The “Off The Chain” podcast has been downloaded 70,000+ times in 120 countries. You can listen to the latest episode with Jake Chervinsky now: Click here for Off The Chain podcast


THE RUNDOWN:

Ripple debuts XRP-based crypto product for international payments: Ripple on Monday debuted a new financial product based on XRP, the world’s third-most valuable cryptocurrency by market capitalization next to Bitcoin and Ethereum. The service, called “XRapid,” is designed to enable financial firms and other organizations to make quicker and cheaper international payments. Read more.

Bill Clinton: Over-regulation could kill blockchain's 'golden goose:' Former U.S. President Bill Clinton took the stage at a cryptocurrency industry conference Monday to offer words of warning to lawmakers seeking to regulate what he characterized as a promising technology advance. Clinton noted that "there needs to be an intelligent effort to identify the downsides" and that "you can't apply [an] old regulatory regime to a new technology." "You end up killing the goose that laid the golden egg," he went on to add. Read more.

ConsenSys invests $6.5 million in former R3 exec's blockchain startup: Ethereum development studio ConsenSys has invested $6.5 million in a blockchain startup founded by a former R3 executive. DrumG Technologies, formed by Tim Grant, R3's former head of business development, is also adding ConsenSys founder and CEO Joseph Lubin to its board of directors. The investment comes as a Series A minority funding round in which ConsenSys is the sole participating investor. Read more.

South Korea's largest venture firm backs first blockchain startup: Korea Investment Partners, the largest venture capital firm in South Korea, is investing in its first blockchain startup. KIP is investing an undisclosed amount of money into Temco, a blockchain-based startup that aims to revolutionize supply chain management systems for small- to medium-sized businesses using blockchain technology. Read more.

France accuses intelligence agent of selling state secrets for Bitcoin: A French security official was arrested last week on charges of selling state secrets on the dark web and accepting bitcoin in return. An unnamed agent with the Direction Générale de la Sécurité Intérieure was indicted and taken into custody two days later after allegedly peddling economic information and potentially falsifying administrative documents. Read more.

Two of blockchain's biggest consortiums just joined forces: The Hyperledger Project and the Enterprise Ethereum Alliance have agreed to collaborate on bringing common standards to the blockchain space and cross-pollinate a wider open-source community. This joining of forces is notable as EEA and Hyperledger represent two of the three largest and arguably most influential enterprise blockchain communities. Read more.

….and if you’re at Blockchain Week in Los Angeles, check out StartEngine Summit, an event bringing together all the leaders tokenizing securities and alternative assets.

….and I’ll be speaking at the latest Blockworks Group event in NYC on October 10th. You can pick up tickets here: Digital Assets Event


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