Published on November 4th, 2018 | by Michael Barnard0
The Post-Westphalian Nature Of Cryptocurrencies (Blockchain Report Excerpt)
November 4th, 2018 by Michael Barnard
Along with our regular daily clean tech news coverage, CleanTechnica also produces in-depth reports on various aspects of clean energy and clean transport. One of the emerging technologies we cover that isn’t directly a clean tech innovation is blockchain, which promises to be a catalyst for innovation in the green economy in the very near future. Blockchain is probably most widely known to the public as “having something to do with cryptocurrency and Bitcoin, right?,” which is partially correct, but the technology itself has a wide range of applications, some of which will be crucial in the fields of distributed renewable energy, grid management and energy storage, and smart contracts, among others.
The full report Blockchain – An Innovation Enabler for Clean Technology, which was published in July, is a deep dive into blockchain and its potential, and we will be posting more excerpts from the report over the coming weeks. (Read the last installment here.)
It’s worth elaborating on the post-Westphalian nature of cryptocurrencies for the purposes of this discussion. The Peace of Westphalia was a series of treaties signed in 1648 which formally ended both the 30 Years War and the 80 Years War, which were both Catholic vs Protestant wars and a war between the Roman Empire and a bunch of mostly Protestant nations.
The important point is that the treaties embodied a set of principles about what sovereign nations were, something which has become known as Westphalian Sovereignty. That concept says that nations have complete say within their borders, weren’t supposed to interfere in other nations’ internal affairs, and that all nations are equal, even the smallest. One of the elements of national control which emerged from this was a specific monetary unit developed and managed by the country.
The gold standard was formally established in 1944 with the Bretton Woods Agreement of 1944. That international agreement established the mechanisms for rebalancing fiscal valuation imbalances by shipping gold between nations. That didn’t last long, as the USA’s currency exceeded the amount of gold available within 20 years, and the gold standard was abandoned globally in 1973, with currencies floating on exchange markets. It’s still lamented by many survivalists and Libertarians, which is ironic as they are also two of the three natural markets for cryptocurrencies.
Arguably, bitcoin is the first post-Westphalian currency and is part of the emerging post-Westphalian world, which likely also includes the United Nations and its Responsibility to Protect (R2P) doctrine.
Cryptocurrencies are without borders and not tied to a specific nation. You could also make that argument for the euro, but it’s still tied to a geographically-bound political entity.
Some nations are experimenting with creating their own national cryptocurrency, but it’s unclear what advantage this would give them in a world where the most advanced nations in the world still see a healthy plurality of money exchanged as physical cash. More likely, in my opinion, major long-lasting multinational organizations such as the Catholic Church or zaibatsus will be the first to create internal currencies and possibly shift to paying their staff and vendors in it.
Stay tuned for more excerpts from Blockchain – An Innovation Enabler for Clean Technology, or view the summary and request the full report at https://products.cleantechnica.com/reports/