Bitcoin Governance 2.0: Let’s Block-Chain Them

Journalist:
October 13, 2014

Governments all over the planet are scared shirtless of Bitcoin because it interferes with their ability to watch us from the cradle to the grave.

But who said that they have the right to watch us in the first place?

It’s time to flip the tortilla. The politicians and their hordes of bureaucrats are our employees, paid with our money, and they are supposed to do what they are told. If someone has the right to watch, it’s us who have the right to watch them. Let’s force Big Brother to operate on a public blockchain where we can watch him.

Let’s Block-Chain Them!

Fairy tale? Science fiction? I don’t think so. This crypto Governance 2.0 proposal can’t be implemented next week, but I am persuaded that it could be implemented in one or two decades if we prepare the way.

Just imagine.

Imagine there’s no stealing,
no robbers and no theft.
Imagine all the people,
breathing down their neck.

Imagine that a cryptocurrency is the sole legal tender of the land and the government operates solely on the Bitcoin blockchain, or something similar. All government expenses, contracts, payments and salaries are permanently recorded on the blockchain and open to anyone’s scrutiny. All elected politicians and appointed bureaucrats, from the highest levels to the lowest, are required to sign waivers to surrender their right to privacy and accept this form of public surveillance (alongside more traditional forms) for the privilege of serving the community.

Gone are the days when a bureaucrat could buy office supplies at 100 dollars a pencil from the company of his brother-in-law, created for the sole purpose of selling to the government at inflated prices.

Gone are the days when a politician could take a fat bribe to pass a bill that benefited the company of her sister-in-law, while damaging the competitors and the rest of the citizens.

Gone are the days when scammers with buddies in high places could take public money for doing useless (and never actually performed) studies and consulting projects, and writing reports that nobody reads.

Watching the government on the blockchain is a productive hobby for people with free time to spend usefully, for example senior citizens. I imagine all sorts of cross-referenced monitoring tools to easily spot administrative misbehavior in real-time, or retroactively. I imagine public whistle-blowing message boards with outraged cries of “Look at what I’ve found on the blockchain this time!” A planet-wide Wikileaks.

All call for tenders and bids are recorded and timestamped on the blockchain. The citizens watch contract award decisions with particular attention and their whistles ready. Alternatively, the people can award a public contract themselves, with Kickstarter-like smart contracts where citizens pledge directly to their favorite proposal. The entire world is becoming a Distributed Autonomous Organization (DAO).

Of course, the politicians and the bureaucrats are not stupid – they (sorry, some of them) try to cover their back with untraceable addresses, dark wallets and whatnot. But we are smarter. Hobbyist government watchers and whistle-blowers are given powerful and easy to use network analysis tools to counter the tricks of the bad guys, and rewarded if they find evidence of fraud.

What About Taxes?

Another reason politicians and bureaucrats hate Bitcoin is that it complicates taxation. That seems a valid argument, because the government needs money to spend for the public good.

But what if the blockchain could make it easier for the government to collect taxes?

Imagine that all taxes are replaced by voluntary contributions, recorded in the blockchain. Citizens are encouraged to contribute what they can afford, depending on their income.

Of course, some people try to cheat. But remember that every financial transaction is permanently recorded in the blockchain, and open to anyone’s scrutiny. If that guy down the road who drives a red Ferrari gives only 50 dollars a year because he says he can’t afford giving more, you know that there’s something odd, and blow your whistle. Tax evaders are immediately spotted and subject to public scorn and investigation until they give in and contribute.

If peer pressure is not enough, the system can retaliate automatically. For example (adapted from ideas presented by Nick Szabo in 2001), a smart road built with public money can refuse access to the smart cars of known tax cheaters. The red Ferrari itself can refuse to start if its owner is on the list of confirmed tax evaders.

Music by John Lennon, images from Shutterstock.

Last modified (UTC): October 13, 2014 17:10

Giulio Prisco @giulioprisco

Science writer, software developer, Bitcoin/crypto enthusiast.