The nation-state has always been the main driver of economic growth. In the last century, the nation-state was responsible for developing the infrastructure needed to support industrialization. This included roads, bridges, ports, power plants, and other critical facilities.
However, the rise of the internet has changed how we live our lives. Nowadays, the internet is becoming a major part of our daily life. As such, the role of the nation-state has also changed. Instead of being the primary driver of economic development, the government now plays a supporting role.
As an example, let’s consider Bitcoin mining. It requires enormous amounts of electricity that must be purchased from utilities operating in the U.S., but the value added by this activity is almost non-existent. The cost of electricity is covered by the profits earned from selling the bitcoin mined at a given time. Thus, most of the actual value creation comes from individuals willing to take on more risk than they would if they invested directly into the market. On the other hand, nations like China still rely heavily on exports which is why they have built up their manufacturing base and continue to invest in industries like electric cars.
As you can see, bitcoin mining does not represent the true potential of what blockchain technology can do. There is more to this story. We will explain it through case studies involving some of the biggest names in Blockchain.
Where Should Crypto Miners Go in a Changing Landscape?
Suppose you look at the blockchain landscape today. In that case, there is no doubt that many countries are working hard to keep their position as world leaders, especially those with a strong relationship with the U.S. Many of these nations are looking at ways to diversify their economies and make themselves less dependent on any single industry. As such, they are actively participating in the crypto space. For example, Venezuela is trying to create its national cryptocurrency called the Petro. The Venezuelan government claims that this new currency will solve some of the problems stemming from hyperinflation. But most experts believe that it will drive up inflation even further.
Countries such as Japan, South Korea, the United States, Singapore, Switzerland, and Germany seem to understand that the future lies in adopting blockchain technologies rather than trying to stop them. They are all moving forward with regulations necessary for developing cryptocurrencies, whether it is crypto exchanges or Initial Coin Offerings (ICOs).
One might argue that these governments are simply chasing after short-term gains. However, even with the highest level of regulation, they may find it difficult to compete against decentralized networks because of their reduced barriers to entry. Additionally, they will need to ensure that their financial systems remain stable. When people lose trust in their currencies, it becomes very difficult for them to adopt them.
For example, it is easy to move money across borders when using traditional cash transfer methods. If banks are shut down, the payments won’t go through. Governments don’t want that happening either. With cryptocurrencies, however, things are different. While traditional fiat transfers take months to process, cryptocurrency transactions happen within minutes, depending on how much liquidity there is in the network. This means that it is possible to convert your coins from one country to another instantly, even if the two countries aren’t connected digitally in the first place.
Final Thoughts
To sum everything up, we live in interesting times where many nations around the globe realize that they need to adapt quickly. Cryptocurrencies offer an efficient way to transfer value across borders without relying on central authorities. This has changed the game for global economies, which has led to many nations trying to catch up. It’s important to remember that while these currencies and blockchains are here to stay, governments still have plenty of work before they start considering giving up control over monetary policy.
