Nepal Rastra Bank recently released a directive banning any investment in or transactions of cryptocurrency to curtail fraud and illegal outflow of domestic capital. This is a regressive move on the central bank’s part because banning cryptocurrency is like choosing to opt out of something that will inevitably become part of our daily lives.
Bitcoin hit USD 66,000 last November although it is banned in many countries. The relationship between governments and cryptocurrencies has always been tense even though the global cryptocurrency market size is currently valued at $2.5 trillion. More than 50 countries have already banned cryptocurrencies stating that it undermines the sovereignty of monetary policy, but the two real reasons for this ban is cryptocurrency’s threat to the current inflation creating financial system and the fear of the outflow of domestic capital because corrupt dysfunctional democracies have difficulty attracting foreign investments. The blockchain technology that powers cryptocurrency, however, will likely win in the long run with the rise of “Decentralized Countries (DeCos)” that will supersede nations as we understand them today. For that reason, the bigger threat to the status-quo will not be cryptocurrencies, but “promiscuous nationalists” moving between DeCos depending on circumstances.
Nepal Rastra Bank also recently released a directive banning any investment in or transactions of cryptocurrency to curtail fraud and illegal outflow of domestic capital. This is a regressive move on the central bank’s part because banning cryptocurrency is like choosing to opt-out of something that will inevitably become part of our daily lives. It is also a sign of authoritarianism. Nepal will also suffer from brain drain as a result of the blanket ban on crypto. Talent will simply move to other crypto-friendly countries. It is extremely easy for the Nepali people to move crypto innovations to India.
The most promising and disruptive aspect of blockchain technology is DeCos. Nations are a modern concept that emerged in the 18th Century, making them much newer than many other civilizational creations and it is highly likely that the nation we understand today will also not last forever because every disruptive innovation has radically restructured society in the past. The printing press catalyzed disruptive reorganization some five hundred years ago starting in Europe. The internet and blockchain’s disruption will be even bigger as the most influential civilization-scale entities will exist entirely on the Internet, governing the virtual terrain operating above national borders.
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New countries have been created for as long as humans have existed. Creating a new country becomes a viable option when governance systems start failing with an increase in population density. A clean state manifests from a desire to build something from nothing and change things for the better. For example, Drabya Shah also created Gorkha from a clean state without inheriting dysfunctional legacy governance mechanisms that were stifling progress in the region. The new country became famous for justice and provided political asylum to people in the region attracting many unconventional thinkers and renegades who ended up contributing to a great extent to the glory of Gorkha. Everyone initially dismissed Drabya Shah’s unorthodox vision, but Gorkha ended up disrupting the status quo to unite the tiny principalities of the region under its flag. BitGorkha, an imaginary DeCos version of Gorkha, will most likely embrace the original egalitarian ethos and zero tolerance for corruption that initially made the new militarist country extremely powerful and prosperous.
BitGorkha is just used as an example because data mining shows Princess Himani’s popularity on social media is growing by the day. There will be many DeCos in the future competing to attract talent in the future. DeCos, like BitGorkha, however, may never attempt to settle terrestrial territory because the guiding ethos will be that our digital lives are more real and valuable than our corporeal ones. Decentralization will change nationhood as we understand it now.
A nation-state is a blend of ideology, terrain, and governance. Ideology is an underlying philosophy needed to glue nations as it is the sum of all cultural elements. The physical territory is also a necessary element of a nation. Nations can be guided by political ideology and religion, but fail without good governance. More importantly, a territory can be forced with an ideology or religion and driven by state security and propaganda machinery, but everyone will not accept it as such. Proper nationhood can only exist when every group feels belonging and receives the benefits. Nepal is currently failing in this regard as youth are forced to work in the Gulf countries in inhumane conditions.
Before the advent of the Internet, the printing press catalyzed the emergence of modern nations together with economic change and scientific advancement. The print explosion created a shift in consciousness, allowing a large number of people to read creating a sense of progress and simultaneity. Simply put, the modern-day nation-states emerged as a consequence of these vernacular, and communal shifts.
Print forced people to reconsider time. The Internet does the same for space. Using the Internet, people can communicate, collaborate, transact, and play irrespective of their physical location. The Internet has challenged fundamental beliefs on which the current political system is based. It will be very difficult for governments to completely eradicate any well-built blockchain complexly because of its decentralized architecture. Governments can use terrestrial laws and pressure traditional Internet service providers and legislative bodies to ban cryptocurrencies, but it will be impossible to totally eradicate innovations from the digital world. Cryptocurrencies like Bitcoin are the Internet's vernacular money. Many of its critics thought its impact would be nominal, but this position has been challenged to breaking point with cryptocurrencies’ rise in value and popularity.
Modern nations were not built for the Internet or the blockchain, but new civilizational structures will arise as nation-states fail to cater to people’s needs. Decentralized countries that are Internet-native will become extremely popular. People will prefer migrating to a fully decentralized stack to protect their existence as DeCos attract borderless "populations" boasting large GDPs. iPhone fame Apple Inc. 's current market capitalization is larger than the GDP of 96% of the countries in the world. Meta also boasts similar achievements.
As discussed earlier, ideology, physical terrain, and governance are important for a country to exist. DeCos will also require ideologies and cultural norms to bind its citizenry. DeCos will co-create ideology and culture globally, attracting like-minded constituents by reducing the friction to participate in governance as Gorkha did more than 400 years ago. DeCos will be able to modify and update ideology more quickly, but it will care about physical terrain only to the extent that legacy governments will pass rulings that impede digital legislation. The financial and social strength of DeCos will allow them to supersede nations. Furthermore, DeCos will play an influential role in political disruption. DeCos will also be broadly democratic and see much higher voter participation because people can vote from everywhere in the world using the Internet.
The sophisticated infrastructure of metaverse offers a potential solution because DeCos can only thrive with digital "terraforming." A DeCos in the metaverse will manifest massive, context-dense cities and countries that reflect the ideology and culture of its citizenry. More importantly, it will be a dynamic entity that will be able to scale and upgrade quickly over time to meet the people’s rising demand and pivot quickly based on a change in public opinion, economic opportunities, and technological shifts.
These days’ elections have become only symbolic as nothing changes for most, especially the ones working in the Gulf countries. The cyber-libertarian view is that the Nepali people don’t need federalism with a bloated bureaucracy that puts a heavy financial burden on the taxpayer’s money, but decentralized governance over the digital network.The status-quo will soon be ripe for disruption with DeCos like BitGorkha.
