Can Blockchains Replace Governments?

Today, the blockchain technology is so popular that giant banks are preparing to adopt blockchains as their core technology. Even governments announced that they will use the blockchain technology to manage identities of their people(Estonia) or records the Land Title(Honduras) or national referendum(Ukraine). Is this technology familiar with governments or current social systems?

But when I first heard about the blockchain, I was astonished that a blockchain would replace the government or even states. A blockchain is just a technology so how can it replace a government? Is it possible?

Actually, the ambition of guys who make blockchain is audacious. Not all men are but some of them who have great visions want to make big things, i.e. replacing the current social system.

(Vitalik Buterin, image from wikipedia)

Vital Buterin, Founder of Ethereum wants to make smart contract with which we can replace legacy social contracts based on papers and legals. Daniel Larimer who is leading Steem project, wrote in his self introduction that he was looking for non-violent means of rendering violent forms of government powerless.

(Daniel Larimer, image from Steemit)

Many other blockchain developers share a similar vision. Then in what aspect, we can say that blockchain be able to replace the government? If we say it in a positive viewpoint, I can mention three things. (I will not say negative viewpoints in this article because there are a great amount of negative viewpoints or even proofs that nothing can replace the government in the near future.)

First, what kinds of jobs government do? I think the most important job a government do in general is information processing. The government is an information processing machine. Bureaucracy is an apparatus to make information processing process stably and routinely. I think that it is somewhat difficult at first to understand the fact that government is an information processing machine, but let’s think about this. How about collecting taxes? They calculate annual income of each company or person and decide the amount of tax according to the tax rate defined in the tax law. How about changing the address? They receive the request and confirm the identity of client and change the address. Nowadays the address is recorded in a database controlled by the government, so the term “changing the address” means "changing the value in a database”. “Change the value in a database” is one of the most frequent activities in information processing processes. (Even if the recording device is paper, there is no difference).
The role of computer system is to process information and blockchain is the one of the computer technology. So, I think, there is a substantial similarity between the role of government and blockchain. The difference? One is processed by people who are agents of a government and the other is processed by a machine.

(image from wikipedia)

Secondly, the things that consist of a government are rules. Every activities that a government can do or should do are defined by laws. The process of changing the address is defined in laws or ordinances, and the tax rate is also defined by tax laws. In general, when public servants do their jobs, they should follow the standard processor. Sometimes or frequently a government or a public servant breaks the rules but it is not the point in this time because nobody says that breaking the rules is the nature of government. What people want a government to do is do its defined jobs within the laws.
The first blockchain, Bitcoin contains only trading information but Ethereum contains smart contracts, which contain the rules of service or information processing process. And we can build Dapps (Decentralized applications) onto a blockchain infrastructure now. In other words, we can define the contracts, rules, and processes and record them in a blockchain permanantly. Steemit is a kind of Dapp as well. As we know, a blockchain is impossible to manipulate, and the rules recorded in blockchain is also impossible to forge. We can trust that Steemit service would not deceive us because the logic of the service and the transaction history of Steemit is recorded in Steem blockchain. And this point leads us to the third point.

(Constitution of India, image from wikipedia)

The third point is a problem of trust. I think it is most important because it is related to the ground of the existence of government. What is the fundamental need of government? I think it is to guarantee the trust between people, group, organization and etc. In a ordinary life we don’t need the power of government, but when there is a problem government is the last resort. When there is a dispute between people, when there occur severe natural disasters, when there is an attack from other country, a government is the last prop. This is the basis of the existence of the government : the last bearer of trust.
When the trust is collapsed with any reasons, a government loses it’s legitimacy and sometimes it leads the collation of a government.
It is this point that blockchain could replace the government. The most outstanding feature that blockchain has is that blockchains make it possible that people don’t need to trust each other to interact together. In the preface of the book, BLOCKCHAIN, Blueprint for new economy, the author said :

It’s true uniqueness, however, lay in the fact that it did not require the users to trust each other. (O’Reilly, 2015)

The fact that a blockchain gives us the unbreakable trust means that a blockchain can do just like what a government can do. This means that a blockchain has the possibility of replacing a government.

(image from wikipedia)

Governments and the blockchain technology share three points : information processing, a series of rules, and guaranteeing the trust. So I think that it is possible to replace the functions of a government with a blockchain theoretically. Moreover governments or the civil servants, i.e. agents of governments are able to deceive people. So there is a possibility that a blockchain can do better than a government in some aspects.

I have a brief idea of the blockchain based government system and I’ll tell you more details about it in the next post.

I'm not native English writer, so my article would have some grammatical errors. I beg your pardon in advance. Whenever I find errors, I'll revise my text as soon as possible. Thanks.