An Analysis of the Role of Blockchain Technology in Global Elections and Governance | TrendX Research Institute
In recent years, cryptocurrencies and their underlying technology, blockchain, have attracted widespread attention and discussion globally. From financial transactions to political governance, the influence of cryptocurrencies seems to be gradually expanding. Recently, Sun Yuchen was elected as the Prime Minister of Liberland as the founder of the TRON network and promoted blockchain elections. The victory of the pro-crypto team represented by Trump has further elevated the connection between cryptocurrencies and the global political landscape to a new height. Cryptocurrencies are rapidly expanding their influence.
The rise of cryptocurrencies and their influence
Since their inception, cryptocurrencies have attracted much attention due to their characteristics of 'decentralization', 'anonymity', and 'high security', especially Bitcoin, which has now even become a strategic reserve asset for many countries. This indicates that over time, the rise of cryptocurrencies has not only changed the landscape of financial markets but has also had a profound impact on the global political landscape.
To this day, the influence of cryptocurrencies is indeed widening and brightening, but it is also a winding upward path. This is because, on one hand, the decentralized nature of cryptocurrencies makes it difficult for countries to effectively regulate them, thereby weakening national financial sovereignty to some extent and challenging traditional political and financial systems; on the other hand, the cross-border flow characteristics of cryptocurrencies also make the movement of funds freer, providing the world with more possibilities and greatly promoting the integration and development of the global economy.
It is well known that economics and politics are complementary relationships, and today the influence of digital currencies globally is no longer a simple concept of 'speculating to make money.'
Increasing global financial influence
Looking back at the last cycle, when we talked about cryptocurrencies, we were comparing them to the market values of large companies like Nvidia, Apple, and Microsoft. In this cycle, cryptocurrencies have already been compared to the economies of major countries globally. When the market value of cryptocurrencies reached $1.7 trillion, its scale surpassed the GDP of Spain; after breaking $3.3 trillion, it approached the GDP level of France. Further comparison shows that its market value ranks 8th globally, only behind major economies like the United States, China, Japan, the United Kingdom, and India. This fully demonstrates the growing influence of cryptocurrencies in the global financial system, and its scale and growth rate have become a key force driving the transformation of the global financial system.
In terms of currency finance, the Russian ruble was kicked out of the SWIFT system, so for the currency transactions of other countries, the ruble is a kind of Meme, a garbage coin. However, the Russian government has been seeking various methods for global procurement, and one of the main channels is through cryptocurrencies. We do not discuss right or wrong, nor do we engage in politics. However, blockchain and cryptocurrencies can at least meet some important needs of a country and its citizens. I think this is already quite valuable. Moreover, the United States is also considering using Bitcoin as a strategic reserve; in fact, the surge from $68,000 to $100,000 has largely been influenced by this news.
Expansion of influence on the global political system
Liberland (Liberland) is a controversial region known for its liberal spirit and advocacy for minimal government intervention (not internationally recognized as a country). Elections conducted using blockchain technology ensure the transparency and traceability of the voting process, effectively preventing electoral fraud. The decentralized nature of blockchain also ensures that election results are not influenced by a single entity, enhancing the fairness and autonomy of elections. This practice not only enhances the political governance capabilities of Liberland but also provides new perspectives and solutions for global political governance.
Blockchain empowering elections is not merely about forcibly finding a narrative for Web3, but following the objective law that technology changes life. The most important thing in democratic elections is the effective expression and transmission of public opinion. Ensuring that everyone's ideas are reflected and advocated during the voting process, and ensuring that the advocated public opinion is not tampered with or corrupted in the counting environment.
Taking the recent U.S. presidential election as an example, the Democratic Party has relied on traditional polling methods such as media, portals, street interviews, and surveys to collect data, but polling data does not truly reflect public opinion. Therefore, three days before the election on November 3, Harris led Trump by 1% in support, while on Polymarket at the same time, Trump's support was 52% and Harris' was 48%. If the polls were accurate, Harris should not have lost, at least not so quickly.
But it is clear that Polymarket's predictions are more accurate. Blockchain technology has provided Polymarket with decentralized prediction capabilities, which in turn proves that voting based on blockchain technology can visually reflect public opinion.
Insights on how digital currencies are changing the global landscape
Insight 1: Blockchain technology can make political campaigns more transparent
New technologies, especially blockchain decentralized technology, are making global politics more transparent and trustworthy. Just like in Liberland, this technology can decentralize power, prevent the abuse of power, and make politics fairer. This trend may be applied in more places in the future.
Insight 2: Virtual currencies and blockchain influence world politics
Sun Yuchen becoming the Prime Minister of Liberland and the impact of virtual currencies in the U.S. elections both indicate that virtual currencies and blockchain technology are not just simple financial tools for making money; they are also one of the means that can change the world political landscape. As the status of cryptocurrencies becomes increasingly important, they will appear more frequently in the changes and games of the world political landscape.
Insight 3: Virtual currencies make finance and politics more free
The inherent characteristics of virtual currencies are changing the relevance and freedom of the global political economy, emphasizing a high-low effect, where their decentralized nature weakens national regulation and political control while promoting the free flow of funds and the integration and development of the global economy. As a new investment and hedging tool, its 'anonymity and freedom' and 'high risk and high return' make it a new choice for investors.
Challenges and limitations faced
Although virtual currencies have great potential and influence, their development still faces many challenges and limitations:
Firstly, virtual currencies and their underlying technology, blockchain, possess high technical complexity, making it difficult for ordinary voters to understand and grasp. This may lead some voters to abandon participation in elections or financial transactions due to unfamiliarity with the technology, thereby reducing the popularity and influence of virtual currencies.
Secondly, although blockchain technology itself has high security, network attacks or system failures may still threaten the security and integrity of virtual currency transactions. Additionally, the anonymity of virtual currencies may also be exploited by criminals for illegal activities such as money laundering and drug trafficking.
And the existing legal and institutional frameworks cannot fully adapt to the development needs of virtual currencies. For example, in terms of financial regulation, there are significant differences in countries' regulatory attitudes and policies towards virtual currencies; in political governance, innovative practices such as blockchain elections still face many legal and institutional obstacles. These issues limit the development and application of virtual currencies globally.
Imaginings of Blockchain's Influence
In general, cases of cryptocurrency influence in the economic and political fields sufficiently demonstrate its currently pivotal position, and no one dares to ignore its influence. The demand exists, and since it exists, it should be acknowledged; it is neither a drug nor illegal activity; it is a tool, a means. It depends on where you use it. Cannabis has always been viewed as a gateway to drug use, and China prohibits drugs because cannabis can immerse more people in the pursuit of illusory pleasure, leading them to seek more stimulation and fall deeper. However, this does not affect various governments' support for industrial hemp. Industrial hemp can be converted into ethanol or diesel, is a renewable energy source, and can also be used for soil remediation and heavy metal pollution adsorption. Its fibers can be made into biodegradable plastics, and concrete made from industrial hemp has thermal insulation and fire resistance.
Therefore, whether blockchain is good or bad depends on what perspective you take. Although there are gray areas in blockchain and regulatory vacuums, this does not deny the reasons for blockchain; the key is how to guide and effectively utilize the new technology of blockchain and explore the value behind it. Currently, the existence of cryptocurrencies and their underlying value are increasingly becoming an important role in promoting global change.
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