Following on from our previous essay into what the future of civilization could look like, and in the same vein as the essay by Balaji Srinivasan on how one would create a new country, we now look at how this would practically unfold and some implications for doing so.
Based on our previous work we concluded that we would want to create a new crypto currency specifically for our civilization based on the ZCash (ZEC) blockchain, which would form the basis of everything else that follows. This is in order to provide the citizens of this country freedom & anonymity, and the ability to interact without all their private details being broadcast to the world via an open blockchain (such as Bitcoin or Ethereum). Without this, any such country founded on a crypto currency would devolve into an authoritarian surveillance state.
The Smart Social Contract
In order to be a citizen of this new country all you would need to do is sign the Smart Social Contract and abide by its rules. At any point you could rescind this contract, walk away and no longer be a citizen, the choice to be a citizen would be entirely yours. The only caveat being if you were to break any of the rules of this contract you would automatically lose your citizenship and be required to leave.
Some thoughts to ponder:
- Should each citizen receive only one token when they accept their citizenship and there be a one vote per token election system?
- Should each citizen be able to receive as many tokens as they wanted based on the economic value they contribute to the society?
We would ideally want this country's government to be run by its customers (that is those who pay the taxes) not by its employees (those receiving welfare, or government salaries) so it might not be such a bad thing to have a situation where the more tokens you have the more votes you get…
You want the country to be a place:
- Capital is drawn to (The reverse of capital flight)
- Knowledge & Talent are drawn to (The reverse of brain drain)
Government policies should be geared toward attracting these two types of ideal citizens, because they are not only self sufficient but also add more value to the community than they take from it.
Voting & Democracy
This ZEC based governance structure would allow the first true democracy, as opposed to our current system of representative democracy. One where all citizens can vote on all issues with it now being feasible to do so quickly, easily and securely. It would have no need for either houses of parliament / congress as they would be replaced by voting directly on-chain by all citizens. The executive branch would propose changes and updates to the laws / the social contract and citizens would vote directly.
This improvement would simultaneously decrease the cost of government, streamlining the law making and law repeals process, as well as increasing engagement and making the system more democratic than it currently is.
Government Revenue & Spending
In an environment where almost all assets are private and anonymous the Government is placed in a unique dilemma. You can’t enforce an income tax, payroll tax, capital gains tax, wealth tax, inheritance tax and many other forms of taxes common the world over. It would be limited to a few specific taxes based on the nature of what information it would have at its disposal. As i see it, the 2 most efficient taxes would be:
- Property tax
Based on the area of land owned, where all land in the territory administered by the government is stored on chain and all owners (wallet addresses) registered on-chain. The government could levy a once a month payment due based on this data at any % rate it deemed appropriate. If payments were not made the property title could automatically be returned to the government to be resold to a new owner
- Sales Tax / VAT / GST / Transaction Fee / GAS / Etc..
This could only be done if administered across 100% of the tax base, unlike GST in Australia which is only 47% and more like GST in New Zealand which is 96%. Australia exempts Healthcare, fresh food and a myriad of other services from requiring to collect and remit GST, but this is only possible in a system where bank transaction details are available to governments (through banking laws) and they can audit for non-compliance. Where a government wants to impose a consumption tax on a currency such as ZEC it is required to be done at the system level, as a transaction fee and wouldn't allow it to pick and chose what services it applies to.
One of the major successes of the European Union was its currency union, and at the same time it was also one of its major drawbacks. As a consumer it is infinitely better from an ease of use perspective to just have one account in one currency and spend that same currency everywhere you go. Exchanging currency at every border crossing is a drag and for those global citizens of the world flying in and out of various places it becomes a never ending layer of complexity that those in Europe were glad to see the end of. But from an economic management and governance perspective it was, and still is a massive headache.
Crypto currencies change that, enabling the best of both worlds. The convenience and ease of use of a single currency at the same time as the economic advantages of multiple currencies. Enabling not just a separate currency for every country, allowing for variances between say Germany & Greece to be dealt with much more efficiently and effectively. But hyper-localised currencies, allowing Australia to deal with its 2 speed economy as was the case when the mining boom in Western Australia was experienced at the same time as a downturn in the rest of the country.
The way this can be achieved is through a combination of crypto currency transactions, currency exchange DAOs & smart payment apps. You’d setup your wallet on your smart phone pick your default reference currency or flatcoin (say ZEC, BTC or UDST) and your wallet currency (say ZCash or ETH) which could be the same or different from your reference currency, then whenever you buy something all you’d need to do is scan the QR code at the checkout and your app would show you the cost of your transaction in 3 currencies. The cost the retailer is charging you in their native currency (what they receive) the cost to you based on what is being deducted from your wallet (what you pay) and finally the value of the transaction pegged to a global flatcoin or reference currency.
This gives the people what they want, convenience & ease of use, whilst also retaining sufficient tools and levers for the government to manage the economy well.