The Heartbeat of Cardano.

The Importance of Record Keeping

According to Cambridge dictionary, record keeping is “the activity of organizing and storing all the documents, files, invoices, etc. relating to a company’s or organization’s activities”. This definition is more closely related to the need for corporations to store all documentation due to compliance and regulatory reasons. However, I would argue that the same rules and regulations are not enforced on the government itself in most countries. 

Democracy is highly dependent on the citizenship trusting the institutions will provide the required services they pay through taxation. The social contract starts to crumble when the citizens of a democratic nation don’t know what the government is doing with their taxes. Transparency is therefore the bedrock that provides the citizens the ability to trust their democratic institutions. 

This report by Transparency International provides an overview of the perceived corruption country by country. In the top ten we have Scandinavian countries such as Denmark, Finland, Sweden and Norway. Which are countries that implemented what is now called the Nordic Model. This social economic system is a hybrid of a free market economy and a robust welfare system. For this system to work, transparency is an essential ingredient since it requires a high level of taxation on the populace that can only be maintained if the people trust the government with their hard earned money.

With the exception of New Zealand and Singapore, two highly developed nations in Oceania and Southeast Asia, the rest of the top ten list of least perceived corrupt countries are industrialized European nations such as Switzerland (the only country with direct democracy), Netherlands, Germany and Luxembourg. These countries also had to adopt a welfare system after World War 2 as a way to maintain the social fabric that was devastated during the armed conflict. The same reason applies as in the Nordic Model on why transparency and confidence in the public officials was critical to make it work.

Rules For Thee but Not for Me

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We now live in a world where private citizens don’t have the right to privacy, every action is monitored and analyzed either by the security services or by corporations that later sell the data to the government. Meanwhile, public servants and public companies enjoy the highest levels of secrecy and privacy. Shielding behind “confidential information” or “national security” excuses. When they get caught with their hand on the cookie jar, most often than not, they get a slap on the wrist and the issue is quickly forgotten by the public. Like JP Morgan deleting 47 million emails “by mistake” and fined just 4 million dollars for it. Imagine if the government finds out you deleted documents while being under investigation, you wouldn’t be fined a miniscule portion of your net worth, you most probably would go to jail for obstruction of justice. 

Blockchain technology appears now as a new tool that can help rebuild the trust lost in democratic institutions. Every transaction on the blockchain is verified by the distributed and decentralized network of validators, stored in the immutable ledger shared globally by thousands, millions or even (someday) billions of users. When you understand the true power and value proposition of this technology you start to understand why the establishment and the status quo are so fiercely against it. 

The regulations against money laundering have been in place since 1970 when the Bank Secrecy Act was established. However the scope and power the government has to investigate and prosecute have been ramping up since the Patriot Act of 2001 and later on with the Intelligence Reform & Terrorism Prevention Act of 2004 given regulatory agencies carte blanche to seize funds of individuals and entities, among other superpowers. 

The reader might think these are good things that keep honest people safe, and it would be true if we lived in a perfect world. Unfortunately, our world is far from perfect. These outreaches by government control into the privacy of everyday transactions has little effect on the “real bad guys” who continue to launder money with the biggest banks, complicit with governments around the world. Credit Suisse found guilty in money-laundering case in 2022 was fined only $2.1 million dollars. HSBC was found guilty in 2012 for laundering money for Mexican cartels and dealing with Iran and North Korea. In this case the fine was more appropriate at $2 billion dollars. But these are just two examples of normal practices that happen at the highest levels of the global banking system.

Still wondering why they dislike blockchain technology so much? If the entire financial system would run on a blockchain, these cases wouldn’t be possible or at least they would be much harder to hide from billions of eyes watching every transaction on the blockchain. But the real bad guys who are in cahoots with the highest spheres of government and traditional finance working together to keep their shady businesses going.

A tool for direct democracy

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Blockchain technology has the potential to make direct democracy more reliable and easier to implement across the globe. Right now the only country in the world that has a direct democracy is Switzerland, where every of the twenty-six cantons enjoy a great deal of autonomy and self-governance. There are often referendums to ask the opinion of the citizens about particular issues and how to solve them.

As mentioned before, a key factor for democracy to work and have healthy institutions that address people’s problems and provide reliable solutions is trust in these institutions and the democratic process itself. To gain this trust, transparency is crucial and public blockchains can provide this transparency like never before. Imagine every budget, decision and vote forever recorded in a decentralized and distributed ledger forever. Not only would it change how democratic societies function in the digital age but it would also change the history of social and political science. The aggregated data from past decisions can be used to learn from previous mistakes and share the findings with other democracies around the world.

In a previous article titled Argentina is Ripe for Atala Prism I made the case that Argentina is in an ideal position to implement decentralized self-sovereign identities (SSI) such as Atala Prism developed by IOG. However, this technology made possible by blockchain, can and should be implemented across the world. A SSI is an indispensable tool to make direct democracy possible and viable. It provides every citizen the ability to own their own data, share it at their own discretion and participate in the liquid direct democracy of the future.

Instead of relying on inefficient and siloed centralized government servers to store the information of every citizen, with decentralized SSI it’s the people themselves that can own and store their own data. This would go a long way to ensure that voting using the blockchain is safe and secure from voting fraud because only the people with a verified SSI from the respective Country, State, county, municipality or borough can participate and vote. Making voting much more efficient and natural for the daily lives of ordinary people.

Final thoughts

In a copy of the pre-release source code of Bitcoin that Satoshi shared with a few reviewers before mining the Genesis block in January 2009, shows that Satoshi thought of Bitcoin as a “timechain” and not a “blockchain”. Something similar happened with the term “wallet” which should be called “keychain” because it stores keys and not coins or money, but that’s a story for another time. The point being that the creator of this revolutionary technology thought of it as a tool for time keeping. Every block stores transactions that tell stories of events happening in the world and they are stored forever, or at least as long as there is someone running a node. This shows the power that naming things have on how they perceive them. 

A timechain sounds like a technology much more powerful and resourceful than just simply a blockchain. A timechain can be implemented to bring forth a new era of direct democracy for the world if we are smart and brave enough to fight for this possible reality in front of us. The same way this technology can be used for good, it can be used for evil. At this precise moment when the reader is finishing this article there are people around the world thinking and developing this technology to control, monitor and manipulate the ignorant masses. From Central Bank Digital Currencies (CBDC) to social credit scores and centralized un-sovereign identities, the silent danger of totalitarianism has never been greater than today. But now, we the people have a tool we can use to fight back and we will.

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