It’s taken a decade for the world to catch up with Satoshi Nakamoto and the revolutionary ideas held within the bitcoin whitepaper. The blockchain and the cryptocurrency it supports have spent the post-Satoshi years crawling out of the shadows of their inception into the mainstream. Today, these symbiotic technologies have earned them rightful places alongside some of our most foundational systems of societal organization, particularly state-backed money and digital technology.
Big business has already recognized the potential in these new decentralized technologies, as evidenced by organizations like the Enterprise Ethereum Alliance. Now, governments and international organizations around the world are beginning to comment with greater regularity and specificity about both blockchain and crypto. To better understand when the US might act, and what that could potentially look like, ETHNews spoke with Vinay Gupta for his take on the intersection of government, technology, and disruption.
Using Enterprise to Drive Change
“Getting this kind of stuff going is sort of one part science, maybe four parts money, and about twenty-five parts political will,” said Gupta. “It’s not hard to guess which one of these things happens to be the weak link right now. This is actually a big part of what led me to the Ethereum space.” Gupta knows a thing or two about political will and has been generating it in regard to the blockchain and cryptocurrency for years. Although his experience goes back as far as the cypherpunks of the 1980s, Gupta has maintained a cutting-edge understanding of how these technologies have evolved. As such, Gupta was responsible for explaining “how to sell ideas” at the original Ethereum Devcon. Moreover, as the anchor that the blockchain community relied upon to explain the tech’s potential to the European Union Parliament, Gupta gets how and why governments need to grasp this tech as soon as possible. But instead of waiting for change to come from them, he takes his lead from one of the United States’ most popular businessmen, Elon Musk.
“I had closely watched Elon Musk’s stuff unfold. It was obvious that he was being incredibly effective, relative to everything else being done. To the extent his success is replicable, I guess you build a capital base and then from that base of capital, you go out and start self-sustaining businesses to solve the problems you want to solve. You build your global problem-solving machinery in the marketplace rather than attempting to build it inside academia or government.” Like Musk, Gupta is a foreign-born technologist who came to the states and, like Musk, Gupta is a renaissance man. While Musk’s interests span from space exploration to electric cars, Gupta has businesses centered on venture capitalism, consultancy, and the future of legal property rights. Gupta continued elaborating about governments adopting these new technologies, “It is fundamentally about power. You need power to solve problems and, right now, power has gotten spread so thin across the world that it’s very difficult for anybody – no matter how well-intentioned – to assemble enough resources to get things to change. Even very powerful people inside the government can’t get government to do what they want government to do.”
Outlook of Adoption
“The US has not taken a federal position on any of this stuff,” remarked Gupta. “The states are largely being left to fend for themselves. Some states are more progressive, some are more regressive, some states are basically ignoring it. I don’t think the federal government has come to an opinion but I would not be surprised if you saw things like social security on blockchain in five or ten years, probably ten. You could take all the social security spending, stick it on chain and it makes it really easy to see where all the money is going, creating the kind of radical transparency that could then be used for cutting costs.”
Although several countries are exploring these new technologies with so-called “regulatory sandboxes,” Gupta believes the US is biding its time for a reason. “The US kind of does have a sandbox. It’s called the rest of the world ... It’s not unrealistic that US regulators have decided that they’re going to go last because they can use existing regulations to keep Americans out of trouble. The SEC patrols very judiciously ... The US can see how things go everywhere else and then they make a decision how they want to do it. Once the US has decided where they’re going with this, the global standard is established. In that sense, you could see why US regulators would want to give things some time to mature.”
A Theoretical US Blockchain
Gupta continued, “In a US context, what does a blockchain do that the US government can’t do with a big database? I think the answer is that the government is not really a well-integrated item. Imagine a situation where you had a US chain and all of the state governors had signing keys. You’d wind up with something, run by the state, for transparency in the federal budget. It’s not that you simply wind up with the only equilibrium in America being a federal chain, you could have a chain run by the state governors which would be used to track and manage federal spending.” According to Gupta, there could even be fifty distinct varieties of chains, one for each state. Since America has a relatively complicated legal framework between the federal and state levels, Gupta asserts that this area is ripe for disruption. “A lot of the weirdness [between the federal and state legal systems] has been banned flat using interstate commerce legislation ... so you could imagine a kind of push back on that level from the states. They are clearly capable of setting up a national chain, which they could use to run a whole bunch of things that states want to organize without having to go through the federal government. [America] would be relying on the semi-independent nature of the states to give you the political diversity required for the chain to be secure. This to me is what a uniquely American solution would look like. It would take its place on the stage of the long-term arch of American politics in which individual states, municipalities, counties, and the federal government are all wrestling across levels for independence, autonomy, and control ... Consequently, I think that it would be short-sighted for anyone to suggest jumping straight to a federal system. There’s a lot of other ways it could go.”