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Blockchain Can Be An Anti-Corruption Tool, Even In A Deeply Corrupt Government System Like Ours.

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The other words for blockchain technology are world-changing. The world has now started to realize the true potential of blockchain technology. This technology has now been used in a wide array of industries including finance, supply chain, agriculture, voting, climate, and medical.

Blockchain technology was supposed to remove the possibility of any temper with the records of digital transactions as records entered in the blockchain are transparent and immutable. The technology was later repurposed for thematic areas other than digital currency. Now blockchain can also store public registries other than the digital transaction.

In the past, experts predicted that blockchain technologies would end poverty, eliminate corruption, and provide financial inclusion for all. Realizing these features of the technology, development organizations and anti-corruption communities are turning towards this technology. But how it can actually serve as a true anti-corruption tool.

Blockchain As An Anti-Corruption Tool

Blockchain technology is a distributed presentation of data, where records are duplicated among several nodes. Each new record in blockchain is connected to the previous record by the cryptographic method. To make legitimate changes in data, all the previous records have to be tempered accordingly. This means blockchain technology inherits anti-corruption capabilities in its structure.

Corruption is often associated with centralization and misuse of power. In centralized systems, any corrupt actor can easily alter the records, or can simply destroy these records. The current database and information systems are typically located in one or two locations. Such centralized databases keep the possibility of a single point of failure. Furthermore, conventional systems are sensitive to cyber-attacks.

Blockchain brings new dimensions to the decentralization of power, where not a single person or organization has the power to control the systems. This decentralization brings two main strengths to blockchain technology: security and removing a single point of failure. The decentralized nature of blockchain can allow corruption reporting platforms to be manipulation resistant.

Until now, blockchain technology has been used mostly used by the private sector to provide secure and efficient financial services to customers. What about its use in government affairs.

Blockchain for Governments

Misconducts and financial corruption have always been a headache for central governments around the world. But the very little has been discussed about the use of technology to deal with this deep-rooted challenge.

According to a paper published in 2019 OECD Global Anti-Corruption and Integrity Forum in Paris, the development of innovative technologies like blockchain provides state-of-the-art opportunities to reduce corruption in public administration.

The paper features a Delphi study about the use of blockchain in nine anti-corruption mechanisms. Out of nine, the study identifies three key government areas where blockchain can be used as a potent tool against corruption: fair elections, financial reporting & accountability, and records management.

The paper reads:

“One of the most frequently mentioned use cases of blockchain is its use for online voting. Unlike conventional technologies, blockchain allows us to bring end-to-end transparency to the voting process and results with strictly protecting the anonymity of the voters.”

Governments can leverage DLT for transparent financial reporting and accountability. The transparency and non-reversibility features of this technology allow governments to achieve transactional transparency and accountability in financial operations.

Record management and the integrity of the information it stores is the stand-alone feature of blockchain technology. The technology eliminates opportunities for falsification and the risks associated with having a single point of failure in the management of data. According to a publication by Stanford Social Innovation Review (SSIR), “it also helps overcome the data silos in traditional bureaucracies in which public entities are reluctant to share information among themselves.”

The publication reads:

“Blockchain is particularly suited to fight corruption in the registry of assets and the tracking of transactions such as procurement processes. By leveraging a shared and distributed database of ledgers, it eliminates the need for intermediaries, cutting red-tape and reducing discretionally. Governments around the world have started pilot testing a variety of blockchain-based applications to strengthen public integrity.”

Conclusion

Blockchain technology has the potential to make a critical contribution to fight against corruption and the integrity of the public sector as it can provide more transparency with disintermediation, immutable accountability, and distribution of power.

But it is not feasible for all anti-corruption mechanisms because of scalability and privacy issues. The technology is still in its infancy and has a long way to go. More importantly, the success of the blockchain-based anti-corruption systems depends on the surrounding infrastructure and the political context rather than on the technology itself.

Related sources

https://ssir.org/articles/entry/will_blockchain_disrupt_government_corruption#

http://www3.weforum.org/docs/WEF_Blockchain_Government_Transparency_Report_Supplementary%20Research.pdf

https://www.oecd.org/corruption/integrity-forum/academic-papers/Z-Aliyev-I-Safarov-Blockchain-anti-corruption.pdf

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Francisco d’Anconia and Satoshi Nakamoto Assert the Moral Case and Viable System for Sound Money

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The concepts of justice and money were highlighted in the May 1st article featuring economist Paul Krugman of the New York Times, and government strongman Wesley Mouch from Ayn Rand’s 1957 novel, Atlas Shrugged. The relationship between justice and money is critical because the nature of justice and the nature of money are essential to Western Civilization.

Much like sound money and objective law are corollaries, soft money and subjective law are also corollaries. For any form of money to be sound, it will pass three tests. As a medium of exchange, it must be widely accepted as payment for goods and services. This happens when it is also a unit of account, meaning that producers can easily negotiate prices in terms of that money. In our postmodern era, the US dollar is the best global example.

Most important, sound money must be a reliable store of value. If money is expected to lose purchasing power over time, it will become less acceptable as a medium of exchange. This attribute of sound money transcends the here and now of trading values, and enters the fourth dimension of time and space. It becomes transferrable wealth, anywhere in the world, at any time.

The moral foundation of sound money is the productive work of its creator, stored as wealth, that has not been spent on other material values. Its moral purpose is to trade values with other producers, making it the keystone of civilization. In the modern and premodern eras, gold was the best global example.

While gold can be minted in many size-values, what makes it an ideal form of money is its durability and the difficultly and expense of producing more. This last attribute is gold’s very low flow-to-stock ratio, meaning the flow of new gold into the existing stock is very small and predictable.

Conversely, paper currency has the advantage of being easy to transport and secure cheaply, but it’s also very easy and cheap to produce. Corrupt and incompetent political elites are happy to mint their unlimited counterfeit money because they don’t produce anything else, and they’ll be dead before the money collapses anyway. To hell with that store of value, time and space thing, its for the public good.

As a result of their extremely soft money and morally subjective law, large Western democracies are now all welfare states. It began with their war to end all wars, funded by public debt (World War I), that led to even greater mass atrocities. Today, social justice warriors are demanding free health care and education because their government monopoly currency has inflated costs to criminally expensive levels. In Atlas Shrugged, copper fortune heir Francisco d’Anconia declared,

Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion; when you see corruption being rewarded and honesty becoming a self-sacrifice, you may know that your society is doomed.

Perhaps the only way for moral justice to resume, and ignite a radical change in the dominant philosophy of American culture, is to create a new form of sound money. For a new currency to be accepted globally, it must first become a reliable store of value. To achieve this, it must be very difficult and expensive to produce, solve the portability and security issues of gold, and make the foreign exchange markets irrelevant.

This is a mind-boggling challenge, by orders of magnitude, and one accepted by the infamous Satoshi Nakamoto. On November 1, 2008 Satoshi announced the birth of Bitcoin to the world. According to economics professor Saifedean Ammous, Nakamoto (a pseudonym) sent an email to a cryptography mailing list claiming “that he had produced a new electronic cash system that is fully peer-to-peer, with no trusted third party.”

What this means is a totally decentralized system (peer-to-peer) with no institutional control (trusted third party). Network verification replaces trust. As statistician Nassim Taleb explains,

Rational markets do not require any individual trader to be rational. In fact they work well under zero intelligence. A zero intelligence crowd, under the right design, works better than Soviet-style management composed of maximally intelligent human beings.

Of course, the idea of maximally intelligent human beings concentrated in government is beyond absurd. Regardless, the design is known as Blockchain, and it is specifically engineered for Bitcoin. Its process for mining and recordkeeping is highly complex, expensive, and slow. For example, when Ammous published his 2018 book, The Bitcoin Standard, he estimated the computing power dedicated to Bitcoin mining to be the equivalent of 2 trillion laptop computers. Additional costs and infrastructure include the electricity and high speed fiber-optic cable networks needed to run the computers.

The complexity of the Bitcoin network reminds one of the human mind itself, and according to d’Anconia’s thinking, it may be no coincidence,

Men had always thought of wealth as a static quantity, to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. The words ‘to make money’ hold the essence of human morality.

To make money belies the efficient deployment of capital. Under rational circumstances, capital investment is funded by wealth saved for future consumption, and owned by people with a lower time preference than political elites. They are willing to postpone consumption now for greater possible wealth to spend later.

Human beings are unique in that they can envision and shape their futures. Long-term thinking is imperative for investors, for entrepreneurs, and for civilization. Government induced, artificial, short-term incentives destroy that. Francisco relates,

They start by destroying money, for money is men’s protection and base of moral existence. Destroyers seize gold and leave its owners a counterfeit pile of paper. This kills objective standards and delivers men into the arbitrary power of an arbitrary setter of values.

Fortunately, Satoshi Nakamoto has a different plan, as computer scientist Ralph Merkle explains,

Bitcoin is the first example of a new form of life. It lives on the internet. It lives because it can pay people to keep it alive. It can’t be changed. It can’t be argued with. It can’t be corrupted. If nuclear war destroyed half of our planet, it would continue to live uncorrupted.

Until Bitcoin matures, it is merely a volatile trading vehicle for crypto speculators. Ideally, it will become a lousy investment, a reliable store of value, a tool for moral justice as gold has been for centuries, and inspire echoes of Ayn Rand laughing all the way to the bank.

 

 

Don’t Pay Taxes. Buy Things That You Want The Government To Do.

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Local governments do many things, and those things are generally funded by taxes, rather than user fees. The largest categories of local budgets are education and social welfare, but there are also lots of mundane things like building maintenance, pothole repair, and cutting the grass at the city park.

The usual story in policy studies is that the state “must” supply public goods, because markets can’t. The technical details are that public goods are non-rival (if I use some, there is no less for you) and non-excludable (if you don’t pay, you can’t easily be prevented from enjoying the thing).

At the local level, parks might be an example: putting up a fence around a large park is expensive, and even then someone could see the park and its lovely trees out the window of a house across the street. To exclude use of the park would be so expensive it would prevent any market provider from making money.

The problem is that “non-excludability” is really just a technological problem, because the ability to charge and withhold access is beyond our reach, at least at reasonable cost. But that’s changing, fast.

Imagine that your community, let’s call it Friendlyville, has the sorts of needs that all communities have: work on the school, work on the park, and fix the sink in the town hall. Anyone who works for the town, or anyone who lives in the community, can suggest that something be added to the “to do” list.

As you walk around town, you can turn on the virtual reality (VR) component of your smart glasses. When VR is activated, the world around you has a superimposed “grid,” with a description of the jobs or activities on the “to do” list. It works like a wedding registry, with the listing (“fix sink in town hall”), the price (a bid from a local contractor) and a name field that lists the identity of the member of your community who has committed to pay for this item.

Operating behind this visual representation is a blockchain app that mimics a number of parts of the “Pokemon Go” game, allowing you to look at virtual “things” and interact with them. You can commit to paying for the mowing job at the park; that grass is looking pretty shaggy. Or the shrubs at the school, or anything else on the “to do” list. When you “look” at the job to be done, or the grid representation, you can just say “commit,” and your name appears on the system as having promised to pay for that local public good.

How will you avoid being taken advantage of, paying the “chump’s” cost of being the only one to contribute? There are two things here that are different from the usual decentralized and anonymous public-goods-provision setting.

1. When you commit to pay for the mowing job, your name is listed for everyone to see. Normally, public goods are paid for out of general revenues, and the “credit” you get for contributing to the community is doubly anonymous: no one knows how much taxes you pay, and your tax money is just put into a big pile so you have no direct sense of contribution.

2. Blockchain! The way the system works, you have committed to pay for the mowing job. You can’t back out; your commitment is enforced by encumbering the funds in your bank account for some set period. But the money is not actually removed from your bank account, at least not until everyone else, or almost everyone else, has also committed. The blockchain uses a consensus protocol, possibly defined along “proof of stake” lines, that doesn’t execute the “contract” until some proportion of taxpayers have stepped up and committed to contribute.

Together, the visual representation of needs, the “wedding registry” system of giving credit for contributing, and the blockchain “smart contract” system for ensuring excludability, can solve a lot of the problems that until now have prevented “public goods” from being provided privately.

In other words, give me the code for a wedding registry, “Pokemon Go,” and some VR glasses, and I can change the world. Local “public goods” can be privately supplied, with software that is available essentially off the shelf.

Of course, you can say that these activities are all just low-hanging fruit, and many difficulties of coordination remain. And that’s right. But it’s interesting to think of just what can be accomplished even on this modest scale. Many of the problems of unaccountability in bureaucracy are solved, because the activities and prices are private bids.

It is notoriously difficult, in standard bureaucracies, to monitor work and fire bad employees. But in the blockchain system the person who paid for the “to do” list item can make sure it is done satisfactorily, and then write a review. These reviews can help weed out contractors who do a bad job, effectively “firing” them.

It’s true that many problems remain to be worked out before this system could be implemented. My point is simply that we are closer than you might think, using existing pieces of software that can be easily adapted, and the ability of people in small communities to cooperate voluntarily, without coercion or inefficient bureaucratic structures.

Welcome To Turn-Key Capitalism And Functional Markets In A Box!

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Adapting to change is the key to survival. Social systems must be able to serve people in periods of stability, by creating predictable patterns of rules and expectations, and to serve people in times of disruption, by fostering innovation and entrepreneurship without breaking down.

In evolution, the tension between these two imperatives—the need to match features to specific settings, and the need to adapt quickly to unpredictable changes in circumstances—is the driving force that explains survival. The dinosaurs ruled much of the planet because they were adapted to the environments they lived; mammals took over because their smaller size, fur coats, and fast metabolism let them adapt to changing circumstances.

In human societies, disruptive changes are internally generated. Competition among societies, and innovation within societies, generates change that has to be managed by institutions. Since these institutions are often the products of the need to generate stability and predictability, managing fundamental change can be a problem.

The Ottoman Empire lasted for more than 600 years; it was stable and internally peaceful. On the other hand, this stability was purchased at the price of economic stagnation, and retarded progress in the sciences, of a dozen nations.  As my Duke colleague Timur Kuran argues, stability and coherence alone are not enough.

On the other hand, the activities of Enron Corporation  showed that rapid adaptation, moving ahead of the ability of market institutions or property rights to adjust, can be catastrophic. The Industrial Revolution wiped out social and cultural institutions and traditions on a wide scale.

Some analysts (including me) are now arguing that we are on the threshold of similarly disruptive changes. The nature of work, our sources of income, and the way we own and use things may be profoundly different in just a few decades.

Saltation

One kind of disruption, which in my book Tomorrow 3.0 I called “saltation,” is mostly—though not entirely—good, because it means that the institutional and legal preconditions for development in poor nations will no longer be necessary. The word “saltation” is rarely used in conversation.  It means an abrupt movement or transition, or (in evolutionary terms) a sudden discontinuous jump in a line of descent.

Much of what we think we know about development, entrepreneurship, and the function of government and markets is based on certain assumptions about institutions and preconditions.  Software will allow even a nation with a corrupt government and police force, rudimentary banks and broken capital markets to produce useful services. Development economists have long told developing nations that they must follow a particular path of rule of law, independent judiciary, financial system, and so on. This essentially material, marginalist notion of “stages” of development is clear in Karl Marx, who said “The country that is more developed industrially only shows, to the less developed, the image of its own future.” (Capital, p. 13).

But what if blockchain apps and cryptocurrency could simply operate on top of a corrupt system? Turn-key capitalism!  Functioning markets in a box! Or an “app,” at least. The reduction in prices, and the availability of an increasing variety of services and activities for free, or for a very low cost, is likely to provide a platform for leapfrogging the traditional stages of development and the usual institutions required for starting and running a business. This jumping will disrupt the banks, the courts, the political entities that try to regulate and control business activities, but it will also allow people in nations that lack financial intermediaries, a system of law, and state capacity to provide infrastructure to become competitive.

Separation

The other kind of disruption, which is already commonly called “separation,” is mostly—though not entirely—bad, because it means that many people will be left behind, in most cases through no particular fault of their own, and will be relegated to second class status in wealthy nations.

I’m not convinced that separation is inevitable; much of the discussion of the “stagnation” of the total compensation of the middle class has ignored the dramatic decline in prices for many goods and services, especially on-line platforms such as Facebook, Twitter, and Wikipedia. Still, it’s true that software is replacing a lot of service jobs, and this may continue for years to come.

I have argued that the key feature of the new economy is the commodification of excess capacity. Like the commodification of labor in the 18th and 19th centuries, this may result at first in a “stretching” of the income distribution.  Those without knowledge of how to gain access to programming skills, and who don’t have durables, such as cars for Uber or houses for AirBnB, may find themselves in a difficult position economically.

The three most important impacts of the new “sharing” economy are likely to be:

(1) a dramatic reduction in the amount of physical stuff, in the form of consumer durables, being produced in factories by workers.

(2) an equally dramatic decline in the cost of having access to a variety of stuff, and a sharp reduction in costs of storage.

(3) an ambiguous, but unsettling, effect on real wages, with both the direction and variance of real wages very much in flux.

Over the last twenty years, two things have happened in U.S. manufacturing: The total number of jobs in manufacturing has fallen from about 18 million to just over 10 million. But the total value of manufacturing has increased steadily.  This increase in productivity is good; in fact, it’s great!

The problem is that it means that there are fewer people working in these kinds of jobs. In the past, the service sector has taken up the slack, but it’s not clear that will happen this time. The reason is that, as Marc Andreessen famously said back in 2011, “Software is eating the world.”

I don’t have a crystal ball, and I have shown in the past that I am terrible at making predictions. So I won’t make you laugh by drawing conclusions. But I will say this: if there is a way to encourage saltation,  because it levels the differences between developed and less developed nations, we should explore. And if there is a way to mitigate the harmful political effects of separation, we should explore those, too.

People fear change, because they don’t know what to expect. As a society, if we can ease the adaptation to changing circumstances, we may be able to do a much better job of accommodating a future that is coming whether we like it or not.

 

This article appeared at AIER.org on May 1, 2019.

The Blockchain is Helping to Curb Foodborne Illnesses

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Each year, roughly 48 million Americans fall ill because of foodborne illnesses. Of those who fall ill, 128,000 are hospitalized and 300 die. For most of human history, determining the source of the contamination has been extremely difficult, if not impossible. And even if tracking down the origin of contamination is possible, it is a timely process that can take weeks, in which time many people could potentially be harmed. But thanks to the blockchain technology, contaminated produce that could potentially result in widespread foodborne illness is now easier to trace and thus, easier to prevent than ever before.

By the end of January 2020, California-based produce companies wanting to do business with Walmart and Sam’s Club will be required to incorporate a blockchain-based supply chain into its standard operating procedures. These companies include giants of the produce world like Dole, Taylor Farms, and Fresh Express.

Frank Yiannas, Walmart’s vice president for food safety, said:

“We’re requiring our suppliers of fresh leafy greens to be able to trace back their product to the source, to the farms, in seconds and not days or weeks.”

It makes perfect sense for Walmart to make this move. Just last spring, Arizona-based produce manufacturers were hit hard when romaine lettuce that originated there was found to be tainted with E. coli. The contaminated lettuce impacted 205 people in 36 different states. Ultimately, it ended up claiming the lives of five people. Consumers felt almost powerless in the situation, as they realized just how hard it was to find out where their produce originated.

After a lengthy investigation, only one farm could be traced back to the spread of the illness, though experts know from experience that it is rarely just one farm implicated in contaminations of this magnitude. But without the proper apparatuses in place, it is extremely difficult to get to the bottom of these types of produce scares. It is for this reason that the tainted romaine lettuce went on to harm consumers for several months, lasting from April to July. In fact, it was the deadly produce outbreak that had struck the industry in modern times.

Yiannas continued:

“The time is now for a better way to tackle the issue of food traceability. There’s a strong public health case as well as a business case for doing so.”

In the digital age, where blockchain has made it possible to share information with the public within seconds, there is no reason for contamination on this scale to continue.

The Blockchain and Consumer Safety

For almost two years now, Walmart has been experimenting with blockchain technology to see how it could help prevent future outbreaks of foodborne illness. Big name companies like Nestle, Danone, Unilever and Driscoll’s berries have participated in these pilot programs, and almost all have a vested interest in doing so.

By incorporating blockchain, these companies have almost nothing to lose and everything to gain. Not only does this help prevent being at the forefront of a future contamination crisis, but it also shows that these brands are dedicated to using technology to ensure food excellence—something all consumers can get behind.

As described by the Los Angeles Times, the incorporation of blockchain technology would work by:

“The first block of the chain would come from growers providing information by smartphones, or in some cases via preprinted boxes and labels. Next, packers and shippers would enter information on every lot of produce they process as it passes through their facilities to trucks and enters the Walmart distribution system.

Each move is known to other parties, who must verify the activity in a system in which no one knows everything, but everyone knows every move. (That has earned blockchain the dual nicknames of the Internet of Trust and the Internet of Distrust.)”

But the industry has more to gain from this than just food safety. Blockchain will help expedite contract payments and also help supply more information to potential buyers.

Foodborne illnesses end up costing $152 billion in health care costs each year, but by utilizing blockchain’s decentralized capabilities, grocery retailers and consumers will be able to know where their food is coming from so that they may be able to avoid any harmful produce. And when an instance of contamination is detected, it can be stopped before causing widespread damage.

The fact that this type of technology can be used to ensure our food safety is just further proof of blockchain’s revolutionary implications. Even though government regulatory agencies have existed to “protect” consumers from these types of instances, the government is not by any means, a foolproof way of protecting consumers. Foodborne illnesses still spread each year in spite of the existence of these regulatory agencies. But by decentralizing information and making consumers more informed about their purchases, the market is becoming a safer place to do business.

Blockchain Is Now Protecting Voters from Fraud and Corruption

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The world may be filled with many prophets of doom and gloom as of late. But when we actually take a look at the state of our civilization, we find that things are actually getting better. Not only are people enjoying more wealth today than they have in previous eras of history, but technology is also empowering the individual in ways we have never seen before. The latest example of this comes from Sierra Leone, where blockchain technology is being incorporated with voting, to verify electoral votes.

A History of Corruption

Sierra Leone has had its fair share of troubles. In addition to a deadly mudslide and an outbreak of Ebola that killed thousands, the nation is still trying to recover from the deadly civil war that claimed the lives of 50,000 Sierra Leoneans. You can see, then, why so much was at stake during the elections that took place in early March.

While previous elections had been peaceful, there were acts of violence committed at political rallies leading up to the March elections, resulting in at least one death. Sierra Leone only gained its independence five years ago. And since its early years have been plagued by misfortune, its leaders were eager to find alternative solutions to traditional voting methods in order to guard against political unrest. 

In the wake of President Ernest Bai Koroma stepping down after serving two five-year terms, the country is hoping for a peaceful transition of power. But Koroma’s legacy has been marked by allegations of corruption. In fact, during the Ebola outbreak, when 4,000 people lost their lives, it was discovered that $14 million of the funds allocated towards eradicating the virus had gone mysteriously missing. This obviously did not sit well with voters who had watched the virus claim the lives of loved ones.  

To make matters worse, the government was also accused of ignoring certain warnings given about the possibility of mudslides. Specifically, human rights organizations claim that Koroma was warned to limit housing on eroding hillsides.  Of course, these warnings were ignored and lives were lost, which did not reflect well on the President. 

But due to the preexisting claims of corruption and a bloody civil war, the country tried something new this time around. To ensure that the voting, and the tallying of the votes, went as smoothly as possible, Sierra Leone became the first country to utilize blockchain technology to help verify votes and avoid fraud. 

Blockchain Empowering the Individual Voter

Agora is a new Swiss company that promises to “bring voting systems into the digital age.” On its site, it describes itself as:

“Agora is a blockchain-based voting ecosystem allowing anyone anywhere to vote online from a digital device in a fully secure, easy and certain way.

Our end-to-end verifiable voting technology eradicates fraud and corruption by creating an immutable and publicly-viewable record of the election on a custom blockchain.”

And by utilizing blockchain technology, Agora helps to make elections tamper-proof, transparent, and private in geographic areas where peaceful elections do not always occur. This, in turn, helps to ensure that contentious elections operate as smoothly as possible.

In March, Agora’s services were provided at 280 polling locations within Sierra Leone’s Western District. Typically, the country’s National Electoral Commission is responsible for giving the final numbers. But this year, that responsibility was delegated to Agora. After the votes were in, each was read out loud and then stored on a joint, which is essentially a private blockchain network that can only be accessed by designated Agora employees. The votes were validated in real time and then posted on Agora’s site for the whole world to see. 

This solves the age-old problem of voter fraud and manipulation by reducing human error, whether intentional or not. 

Agora’s CEO, Leonardo Grammar stated:

“I strongly believe that this election is the beginning of a much larger blockchain voting movement.”

And while voting might not be the end all be all when it comes to safeguarding individual freedom, inhibiting big governments from meddling in elections serves to give further power to the individual by ensuring their unique vote is properly accounted for.

This is just the beginning of blockchain being utilized in elections, but in geographical areas where elections are synonymous with corruption, Agora offers a viable and affordable solution. Just imagine what would have occurred if this technology had been available during the Iranian elections in 2008? Agora is once again proving that through blockchain, individuals are empowered and governments are restrained.

The Next Generation of Ridesharing Is Giving Uber a Run for Its Money

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When Uber and Lyft first hit the market, it completely revolutionized the concept of “hailing” a cab. And while the ridesharing industry has offered us safe and reliable alternatives to the outdated cab industry, innovation is constant.

As civilization becomes evermore digital, young consumers, who generally flock to the sharing economy, are seeking services that are both peer-to-peer and tokenized. And one burgeoning startup is giving Uber and Lyft some unexpected competition.

Creating Competition in the Ridesharing Sector

Arcade City is proof that the market always finds a way. At the end of 2015, new regulations in Portsmouth, New Hampshire mandated that each rideshare driver had to register with the city as well as comply with outrageously rigorous background and screening processes before they could accept payment in exchange for rides. Any driver who failed to comply would have to face the legal ramifications—$2,000 or up to one year in jail. This drastically decreased the availability of ridesharing within the city.  

Already dissatisfied with Uber’s treatment of its drivers, as it had just slashed the percentage of take-home pay each driver saw, and unwilling to jump through the new regulatory hoops, a group of former Uber drivers, led by Christopher David, decided to create their own startup.

Launching its services on New Year’s Eve, Arcade City offered free rides within Portsmouth and asked only for donations in exchange for their services. Since the rides were donation-based and no actual fees were charged, the bold new startup was able to operate under the radar and gave over 30 rides that first night.

And after it had gained attention from the locals in New Hampshire, the startup found its home in Austin, Texas. When Uber and Lyft pulled out of Austin after new regulatory laws were passed, Arcade City moved its operations to the city, capitalizing on the new void created in the ridesharing market. And Austin, known for being delightfully eccentric, was the perfect place for the widespread adoption of this “disruptive” ridesharing service.

Arcade City: Ridesharing of the Future

“Drivers are angry and rightfully so. Their take-home pay was just slashed up to 40% by some nerds in San Francisco who don’t even drive. Arcade City is here to do things differently,” Christopher David boldly commented when the startup first began. David was committed to using the Ethereum blockchain to help facilitate a better relationship between riders and drivers by eliminating the need for an intermediary, like Uber. In David’s model, this is done by using smart contracts between all parties. This also eliminates any potential contention that may arise between the middleman and the drivers since everything is already agreed upon and facilitated through an algorithm, rather than fallible humans.

David said:

“We think Ethereum-based crypto-equity can solve the labor problem facing companies like Uber and Lyft, who are engaged in exploitative relationships with their drivers and face numerous lawsuits about their labor practices. Instead of begrudgingly allowing drivers to organize after a court-ordered Uber to do so, a newer rideshare should proactively encourage drivers to self-organize into groups and co-ops.”

And this is exactly what Arcade City has done with its institution of guilds. Guilds are voluntary groups within the app that set certain quality specifications. While anyone is welcome to sign up as a driver with Arcade City, guilds do require certain criteria be met prior to joining. Guilds might have their own charters or even specific policy practices, but membership is completely voluntary. And, if a driver is not meeting the standards set by a guild, they can be asked to leave. Likewise, any dissatisfaction with the company itself can be addressed by these guilds, rather than a court of law.

Additionally, unlike Uber, Arcade City is not responsible for setting fares. Instead, each driver is supplied with information regarding local supply and demand and is free to set their own rates. This puts the driver in control and allows for a closer relationship between consumer and driver. It also prevents disputes that may arise between the driver and the company. Arcade City also allows its drivers to determine what form of payment they will accept, which could be anything from venmo, cash, or even Bitcoin.

And as far as building the relationship between driver and riders is concerned, Arcade City is utilizing technology to help build relationships between the consumer and the drivers. After the app is downloaded, riders select filters that help connect them with drivers that meet their specifications. If, for example, you wanted a Spanish-speaker who accepts Bitcoin and had a preference for a truck over a sedan, you could arrange to have Arcade City pair you only with drivers who meet your requirements.

But the next step is where the app itself really differs from Uber. Uber and Lyft only require a few taps of the phone before you are matched with a driver. But Arcade City is looking to really build customer loyalty. The startup hopes that you enjoy your driver so much, you will want to keep using them in the future. For this reason, Arcade City lets you arrange future rides as well as on the spot rides with one driver consistently, instead of being randomly matched with a driver each time you use the app. But it also gamifies its system to reward drivers who have returning riders with its own token, Arcade Token (ARCD).

Speaking of its unique peer-to-peer payment system and gamification, David commented:

“At launch we will offer two payment modes: peer-to-peer and gamified. Peer-to-peer mode will let drivers accept whatever payment methods they want to work out with their customers. They can take cash, credit cards through Square, PayPal, Bitcoin, whatever they feel like supporting — and keep 100% of their fare. Or they can use gamification mode, which requires payment through the app and offers perks and prizes for ‘leveling up’ your driver or rider profile. Think Habitica meets Uber.”

While some might prefer Uber’s quick matchup between rider and driver, the market thrives on choice. And for some riders, building a relationship with their driver is important.

“John” is an Austin resident who uses a service dog. Prior to finding Arcade City, he remembers the worry he experienced after ordering an Uber or Lyft and not knowing whether or not the driver would take issue with his dog. But with Arcade City, there is no need for John to worry since he already knows ahead of time that his driver knows all about his situation. Therein lies the beauty of community building within the rideshare market.

This type of model actually builds relationships between the rider and driver. Unlike Uber and Lyft, if you really like your Arcade City driver, you can arrange to use them as often as possible, further guaranteeing a positive experience. It also further incentivizes the drivers to offer you a quality experience. While Uber uses its star ratings to reward drivers with positive track records, it doesn’t necessarily help build a client base. As an Uber customer, the odds of me having the same driver twice are slim. But if really enjoy a particular driver there is no reason why I shouldn’t be able to continually use their services. With Arcade City, this is possible.

And since Austin prides itself as a haven for all things weird and unique, Arcade City quickly became a popular alternative when Uber and Lyft left. Of course, both ridesharing giants eventually returned to the city. But that doesn’t mean Arcade City has lost any of its momenta.

Can’t Stop, Won’t Stop

Since its creation in 2016, Arcade City has expanded to 27 U.S. cities and over 155 countries. This growth has been nothing short of disruptive given its relatively young status. It has also learned to swoop in and meet consumer demands when Uber

Recently, the up and coming ridesharing startup broke into the Southeastern Asia market after Uber suspended its services in  Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

Christopher David said:

“Uber is withdrawing from the world stage at an increasing pace. Arcade City is happy to continue filling the void Uber leaves behind. Drivers and riders all over the world are excited for a true alternative.”

Competition is an amazing concept; it is what brought us the entire ridesharing sector to begin with. And while Uber and Lyft were the most innovative services on the market years ago, the sector is evolving and as a result, we are getting even more innovative ideas. Where cabs once demanded we have cash, Uber corrected this by allowing users to pay with PayPal or their debit card. Now, thanks to Arcade City, you can pay for your next ride in crypto.

In This City, Blockchain is Now Helping to Alleviate Hunger and Reduce Waste

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Consumers throw away about 133 billion pounds of food every single year. And while it is up to each consumer to decide what to do with their food after it is purchased, how many of us would be willing to donate it if there was a simple way of doing so? Luckily, the Goodr is revolutionizing the way we approach food waste.

Years ago, Jasmine Crowe began hosting pop-up dinners for the homeless in Atlanta, Georgia. As someone who experienced food insecurity firsthand, Crowe wanted to do what she could to make sure this didn’t happen to others. And she is doing this entirely on her own without the government’s help.

Crowe said:

“Having experienced that first hand really shifted perspective for me, because for years I was feeding members of our homeless community. I didn’t understand that the face of hunger was readily changing.”

But in addition to feeding the hungry, the app also helps address the fact that food waste accounts for 27 percent of our landfills. People were so touched by her story and her mission that a video about Crowe’s work went viral in 2016.

Many viewers wanted to know how Crowe was able to provide enough food to feed all her guests. Individuals wrote to her asking which restaurants she had partnered with but in reality, Crowe was supplying most of the food by simply asking for donations from others. She commented on this saying, “And the reality was that no restaurants donated the food. I literally was just taking volunteer donations and spending sometimes my last money to make these things happen.”

But Crowe knew there must be an easier way to do this. In 2017, she developed an app called Goodr that helps connect businesses with extra food to local nonprofits who specialize in feeding the homeless or others who are struggling to afford sustenance. But the app’s functions do not simply end there.

Everybody Wins

Whether it be a restaurant or catering company, businesses that routinely find themselves with extra food are also wasting money, and this is a problem that needs to be solved in order to run as efficiently as possible. And by using Goodr, companies are also getting a consultation on how they can reduce waste.

As reported by CNBC:

“The company uses blockchain to keep a data ledger for their clients of how much food businesses waste, and where they might be losing money. Data collected by the company includes information on what food gets wasted the most, community connections and environmental impacts.”

Goodr is able to earn money and sustain its model by charging the restaurants to use its service. Since the restaurants are also able to potentially save by estimating their waste, everyone wins, including those who are the recipients of the free food.

“Our hope is definitely like most social good companies, is that we’re able to work ourselves out of business,” Crowe said. Additionally, Crowe has garnered additional funding by participating in local and national business accelerators competitions. According to Fast Company:

“So far, she’s used local and national business accelerators and incubation competitions to bootstrap capital. That includes winning the United Way Spark Prize for $15,000 in funding, and Miller Lite Tap the Future contest for another $21,000, among other top finishes. In February 2018, Goodr was accepted into the virtual accelerator Techstars Anywhere and continues to work on how to expand and grow revenue.”

Crowe once commented that “hunger is not a scarcity issue. There’s more than enough food. It’s actually a logistics issue.” Luckily, Crowe has found a way to solve this problem while helping to reduce waste at the same time.

Jasmine Crowe is showing all of us that one individual is capable of making a huge impact. And by utilizing blockchain technology, Crowe’s fight to end hunger has become an unstoppable force. Since Crowe launched the app, 900,000 pounds of food have been diverted from landfills and have instead provided about 850,000 meals to those in need. While Goodr is currently restricted to the Atlanta area, Crowe hopes to branch out and expand her services Seattle, Chicago, Los Angeles, Washington D.C., Miami, Dallas, Houston and San Francisco by the end of 2019.

Individuals Need to Practice Constant Vigilance against the State

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There can be no doubt that tech is empowering the individual. From securing our email and keeping our digital correspondence safe from government surveillance through encryption, to blockchain being used to ensure that elections are protected against government corruption, tech is restoring the balance of power between us and the state.

But as great as things may appear to be getting, it is important to remember that when we are up against a foe as formidable as the state, we must practice constant vigilance. And the latest Bitcoin news to come out of China is a perfect example of what we are up against.

The Chinese Crypto Community Gets Dealt a Blow

According to the Managing Director of Dhanua Capital, a California-based venture capital fund, Dovey Wan, the Chinese government just gave an official order to ban all cryptocurrency related commercial activities. A ban on all crypto trading and exchanges was already put into effect earlier this summer. When the first bans went into place, the Chinese government expressed concerns over the crypto world merging with the world of finance and insisted that only government-issued currency is permitted. But this new ban takes things even further.

Rather than restricting actual cryptocurrency transactions, this new ban prohibits the spreading of information related to cryptocurrencies and blockchain. WeChat, one of China’s most popular messaging apps, has already been asked to terminate the accounts of crypto news outlets. Within the first few days of the new rules going into effect, eight crypto news outlets had had their accounts closed on WeChat. The Cyberspace Administration of China cited a violation of new policies as the primary reason.

The new rule came as a result of the Cyberspace Administration’s “Temporary Regulations on the Development and Management of Public Information Services for Instant Messaging Tools” guidelines, which were instituted in early August.

These new rules are completely dystopian in nature and seek to control the actions of individuals as is evidenced by an excerpt taken from the new law, which reads:

“Users of instant messaging tools serving in public information service activities shall abide by relevant laws and regulations. For instant messaging service users who violate the agreement, the instant messaging service provider shall take measures such as warning, restriction, suspension, and closure until the account is closed, and save the relevant records and fulfill the obligation to report to the relevant competent authority.”

WeChat’s parent company, Tencent, stated that the accounts were shut down because they were “suspected of publishing information related to ICOs [initial coin offerings] and speculations on cryptocurrency trading.” The new rule forces private messaging services, like WeChat, to comply and also sites “national interests” as a reason for the new crackdown.

The Fight Continues

Many of us believe, and rightfully so, that blockchain and cryptocurrencies can help individuals maintain a balance of power with the government. But China’s attempts to block not only blockchain-related activities but actual news and information is downright terrifying. But it is also a sign that governments truly fear the potential blockchain and cryptocurrencies hold for a decentralized future.

It is likely that China will not be the only government to take such extreme measures against crypto-related activities, but just because we receive pushback from the powers that be does not mean we should abandon our quest altogether.

The Civilizational Moment When Blockchain Adds Billions Of Entrepreneurs To The Private Property Economy.

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We are living in a civilizational moment of great promise and great consequence. Patrick Byrne expressed this opinion in a conversation about blockchain and his new property rights register for people whose lack of such rights condemns them to inescapable poverty.

Blockchain Offers Us The Potential For Institutional Innovation.

Blockchain stands at the nexus between technology and institutions. Our institutions are failing us and we are losing trust in them. Without trust, the institutions are no longer valid. They are no longer fit for the function for which they evolved to perform.

Financial institutions provide us with a glaring example. Big banks exercise an intermediary role between lender and borrower, between buyer and seller, and between other financial counterparties. It’s important that we trust them to perform this role with integrity, safety, confidentiality and impartiality, and to act to cut out financial risk. But that trust level is eroding. Banks take our deposits and give us a claim on that deposit in return. Then they lend out those deposits to borrowers nine times over in a process called fractional reserve banking. Now not one party but 10 parties believe they have a claim on the deposited amount. The bank makes the bet that all 10 claims will not come up at the same time.

Such a monetary system is facilitated by the central bank, a joint venture of the big private banks and government. When the Federal Reserve creates money and expands credit, the benefit goes first to the institutions who are closest to the source. This includes the big private banks. They get money at the lowest possible cost – close to zero interest rates. Elsewhere in the economy, credit card borrowers are paying 20+% interest, and small business borrowers and pay day loan borrowers may be paying 30+%. The distance between Wall Street financial institutions and everyday borrowers is unfathomable.

The Scourge Of Wall Street.

Patrick Byrne has been called the scourge of Wall Street. He sniffed out specific corruptions in financial institutions and reported on them in a website called Deep Capture. But more important than his condemnations of the financial institution status quo are his efforts to create an entirely new set of institutions. If you can’t beat them, innovate.

Initially, Byrne was both a thought leader and execution leader in Bitcoin and blockchain. He was early to see the potential of Bitcoin as an alternative currency, likening it to a return to the gold standard that provided the stable financial support for the greatest age of innovation and growing prosperity we have so far seen. “It’s like online gold”,  he was quoted as saying. “The supply of the digital currency is controlled by software running across a worldwide network of computers, and its value is decided not by the feds or the big banks, but by the people. It can make our country more robust.” He saw the civilizational potential before anyone else did.

His company, Overstock.com, quickly became the first major online retailer to accept payments in Bitcoin, letting people buy everything from patio furniture to smartphone cases with the fledgling digital currency. Byrne himself converted many of his US Dollars to Bitcoin. His commitment is not merely philosophical.

The Unleashing Of 5 Billion New Entrepreneurs.

Now, Byrne has advanced the idea of blockchain as a civilizational moment to a whole new level. His goal is to bring 5 billion more people into the private property entrepreneurial economy. He believes that doing so will alleviate poverty, grow wealth and turn back terrorism all over the globe.

His partner in the enterprise is Hernando De Soto, one of the most influential economists of all time, and possibly the most important in the world today. In his book The Mystery Of Capital, de Soto established that the capability of capitalism to achieve adoption in any individual country and to raise the GDP per capita and living standards in that country is governed by the legal structure of property and property rights. Every developed nation in the world at one time went through the transformation from predominantly informal, extralegal ownership to a formal, unified legal property system. In the West we’ve forgotten that creating this system is also what allowed people everywhere to leverage property into wealth.

Formalizing property rights can unleash economic power among financially subjugated people. Generating strong formal property rights not only alleviates poverty, it counters the militant terrorism that can take over poor, undeveloped nations. People stop operating in black markets, where terrorists thrive, and start new businesses based on self-reliance and enterprise in a private property economy. De Soto demonstrated this in Peru, where his property rights registration campaign kickstarted an economic miracle.

His method was painstaking. He distributed leaflets to individuals throughout the country, inviting them to bring evidence of informal property ownership, and converted the information into a standardized database, so that individuals can protect their wealth, identify themselves, and to use their assets as guarantees, as investment tokens, and as a means for corporate organization.

Transformational Technology.

Today, the powerful technology of blockchain can be utilized to bring efficiency to De Soto’s method, and to add digital scaling and network effects.  This is where Patrick Byrne comes in, bringing his blockchain expertise and the power of large investment. He believes the solution will change the world.

That’s why he calls the adoption of blockchain and Bitcoin a civilizational moment. From a world in which elites control the creation of money, as well as the intermediation of all money based exchanges and financial institutions, and all the permissions required to do business in such a world, he sees a movement towards a people’s money, and disintermediated peer-to-peer exchanges anchored in a secure private property economy registered on the blockchain. If he is successful in bringing 5 billion more individuals into the entrepreneurial economy, elitist corruption and control will be highly diluted and the black-market fueled violence of exploitative terrorism will be thwarted. A civilizational moment, indeed.

 

Image courtesy of Wired magazine.

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