Use Case: Blockchain Can Shrink Government and Help Poor Countries | The Weekly Standard
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People like me are always praising the value of limited government (and we’re right). But exactly how limited can it get?Even the most radical of small government advocates usually agree on that government should be in charge of protecting private property, defense, and things like roads.
However, with Blockchain’s growing list of uses even that list might soon start getting even smaller. In fact, as many Blockchain followers already know, one country has already started using Bitcoin’s Blockchain to track title to property.
Private property provides title owners the assurance they need in order to invest in and protect their property from abuse.
Without ownership, when property is common or shared, those resources are likely to be abused. For economists this is called the “Tragedy of the Commons.
”For instance, if nobody owns a common area where ranchers might let sheep graze then the incentive is for each rancher to maximize how many sheep they put on the land—without regard to how it effects other ranchers or the land.
As more sheep consume the land’s resources, it will eventually become unusable. In the real world this has led to fish being overfished, and increased the amount of pollutants from farms. Lack of private ownership becomes a lack of responsibility.In places where property rights are strong, capital investments in those resources can thrive.
Compared to the rest of the world, we have very strong private property rights in the United States, and those rights are one of the drivers of our economic growth as well our economic freedom.
Hernando De Soto has been working to provide private property rights to developing nations, which will unlock trillions in dead capital, he predicts.
“Dead capital” is a home that isn’t formally owned or a farm that isn’t formally titled and because of that these assets have several liabilities: They can’t be used to secure a business loan, they’re much harder to sell, and there’s no rule of law to defend them from people who might take them.
The problems De Soto faces in providing land titles to developing countries are numerous. Political instability, corruption, and distrust in government are just the start. Fortunately, Blockchain might be able to solve all of these problems.Blockchain is a publicly maintained peer-to-peer ledger of transactions, where each transaction is added after the last in a "block".
Each block that is added helps secure the rest of the chain by making it harder to change. Ironically, the fact that Blockchain is peer-to-peer technology and therefore “common” is what makes it such a good solution to the tragedy of the commons.
The Blockchain can’t be changed merely because someone new has taken control of the government, the Blockchain doesn’t need a stable government to run it, and since everyone owns the chain, it provides the ultimate form of trust: sunshine.
The first country to jump on board was Georgia in April 2016. One year later, Georgia had registered more than 100,000 documents on the Blockchain. It is the beginning of unlocking De Soto’s $20 trillion in dead capital.
And that is just the beginning. The use of the Blockchain in Georgia is also saving people time and money. According to April 2017 Forbes article:
More form Weekly Standard here: http://www.weeklystandard.com/blockchain-can-shrink-government-and-help-poor-countries/article/20105...
However, with Blockchain’s growing list of uses even that list might soon start getting even smaller. In fact, as many Blockchain followers already know, one country has already started using Bitcoin’s Blockchain to track title to property.
Private property provides title owners the assurance they need in order to invest in and protect their property from abuse.
Without ownership, when property is common or shared, those resources are likely to be abused. For economists this is called the “Tragedy of the Commons.
”For instance, if nobody owns a common area where ranchers might let sheep graze then the incentive is for each rancher to maximize how many sheep they put on the land—without regard to how it effects other ranchers or the land.
As more sheep consume the land’s resources, it will eventually become unusable. In the real world this has led to fish being overfished, and increased the amount of pollutants from farms. Lack of private ownership becomes a lack of responsibility.In places where property rights are strong, capital investments in those resources can thrive.
Compared to the rest of the world, we have very strong private property rights in the United States, and those rights are one of the drivers of our economic growth as well our economic freedom.
Hernando De Soto has been working to provide private property rights to developing nations, which will unlock trillions in dead capital, he predicts.
“Dead capital” is a home that isn’t formally owned or a farm that isn’t formally titled and because of that these assets have several liabilities: They can’t be used to secure a business loan, they’re much harder to sell, and there’s no rule of law to defend them from people who might take them.
The problems De Soto faces in providing land titles to developing countries are numerous. Political instability, corruption, and distrust in government are just the start. Fortunately, Blockchain might be able to solve all of these problems.Blockchain is a publicly maintained peer-to-peer ledger of transactions, where each transaction is added after the last in a "block".
Each block that is added helps secure the rest of the chain by making it harder to change. Ironically, the fact that Blockchain is peer-to-peer technology and therefore “common” is what makes it such a good solution to the tragedy of the commons.
The Blockchain can’t be changed merely because someone new has taken control of the government, the Blockchain doesn’t need a stable government to run it, and since everyone owns the chain, it provides the ultimate form of trust: sunshine.
The first country to jump on board was Georgia in April 2016. One year later, Georgia had registered more than 100,000 documents on the Blockchain. It is the beginning of unlocking De Soto’s $20 trillion in dead capital.
And that is just the beginning. The use of the Blockchain in Georgia is also saving people time and money. According to April 2017 Forbes article:
More form Weekly Standard here: http://www.weeklystandard.com/blockchain-can-shrink-government-and-help-poor-countries/article/20105...