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Will cryptocurrencies sound the death knell of the modern nation-state?
A nation state is defined by UNESCO as one where the great majority are conscious of a common identity and share the same culture.
The socio-cultural parts of a nation state form its backbone. Indeed, it is possibly for one nation to have multiple currencies or for many nations to share one. However, with the advent of the Internet, things have been rapidly changing. Traditional borders which were stiff and inflexible have melted away in the sense that today people can work internationally without having to leave the comfort of their own home countries.
Globalisation is a phenomenon that has come to define the age that we live in. Today market forces are considerably stronger than they have been at any point in history. We have come through eras of sail, steam, telegraph and telephone to near instantaneous communication with each other. In this way the world has become more connected but when it actually comes to the physical transport of goods and even people, the world remains as rigid and inflexible as it once was. International migration, refugees and trade and tariff issues are the source of considerable tension in many parts of the globe.
Monetary and fiscal policies are something that nation-states have had in their grip for ages now. The stability of a nation’s currency is, to a large extent, the function of the government of the country. How much money can be taken out of a country is decided by the capital controls that the government decides to impose. Ever since the first ever Bitcoin transaction took place in 2009, cryptocurrencies have dented the power of the governments to some extent. Cryptocurrencies such as Bitcoin are deflationary instead of inflationary and therefore are fundamentally free from government influence. They have also made it easier for people to move wealth across borders and to transact with each other without government intervention.
If cryptocurrencies have not been able to eliminate borders, they have certainly made it easier for people to transact with ease and reduced the powers of capital control to some extent.
Will cryptocurrencies make the nation state completely vanish off the face of the planet?
I talked with David Mondrus, who says,
“Cryptocurrency is the only one element in the four essential elements that are necessary for the end of the nation-state: Internet, 3-D Printing, Cryptocurrency and Energy Production. While we have realised the first three, we have yet to develop means of energy production that will provide independence to people so that they can move across borders. However, we must also realise that when we’re talking nations there are already crypto-nations being formed on Facebook, Reddit, Git and others. Overall it is still early days and not all elements are in place for the removal of the nation-state.”
When we talk about the nation-state we should consider more than just monetary issues. The state is an entity which comprises an identity forged on cultural, social, religious or other common factors. It is for this reason that even in areas like the European Union, which have a common currency, the differences between states are still distinctly visible. In that sense the nation-state is here to stay for a considerable period of time. As Fran Srajnar, Co-Founder of bravenewcoin.com says,
“No, cryptocurrencies will not get rid of nation states. They may be a partial reason for changing the concept of the nation state.”
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