A Brief Analysis of the Role of Blockchain Technology in Global Elections and Governance | TrendX Research Institute
In recent years, cryptocurrency and its underlying technology, blockchain, have drawn widespread attention and discussion globally. From financial transactions to political governance, the influence of cryptocurrency seems to be gradually expanding. Recently, Sun Yuchen, as the founder of the TRON network, was elected Prime Minister of Liberland and promoted blockchain elections, and the victory of the pro-cryptocurrency team represented by Trump has further elevated the connection between cryptocurrency and the global political landscape. Cryptocurrency is rapidly expanding its influence.
The rise of cryptocurrency and its impact
Since the birth of cryptocurrency, it has attracted much attention for its characteristics such as 'decentralization', 'anonymity', and 'high security', especially Bitcoin, which has even become a strategic reserve asset for many countries. This indicates that over time, the rise of cryptocurrency has not only changed the landscape of financial markets but also has had a profound impact on the global political landscape.
To this day, the influence of cryptocurrency has indeed become wider and brighter, but it is also a winding and upward path. This is because, on the one hand, the decentralized nature of cryptocurrency makes it difficult for states to effectively regulate it, which to some extent weakens national financial sovereignty and poses a challenge to traditional political and financial systems; on the other hand, the cross-border movement characteristic of cryptocurrency also makes the flow of capital more free, providing more possibilities for the world and greatly promoting the integration and development of the global economy.
As we all know, the relationship between economy and politics is complementary. Nowadays, the influence of digital currency globally is no longer a simple concept of 'making money by trading coins'.
Increasing global financial influence
Looking back at the previous cycle, when we talked about cryptocurrency, we benchmarked against the market value of large companies like Nvidia, Apple, and Microsoft. In this cycle, cryptocurrency has already been compared with the economies of major countries globally. When the market value of cryptocurrency reached $1.7 trillion, its scale surpassed Spain's GDP; after breaking $3.3 trillion, it approached France's GDP level. Further comparison shows its market value ranks 8th globally, only behind major economies like the U.S., China, Japan, the U.K., and India. This fully demonstrates the increasing influence of cryptocurrency in the global financial system, and its scale and growth rate are already significant enough to drive the transformation of the global financial system.
At the monetary and financial level, Russia's ruble has been kicked out of the SWIFT system, thus for other countries' currency transactions, the ruble is a kind of meme, a garbage coin. However, the Russian government has been seeking various ways to conduct global procurement, with the main channel being through cryptocurrency. We do not discuss right or wrong, nor are we concerned with politics. But blockchain and cryptocurrency can at least meet some important needs of a country and its people. I think that is already quite valuable. Moreover, the U.S. is also considering using Bitcoin as a strategic reserve. In fact, this surge from $68,000 to $100,000 was largely influenced by this news.
Expansion of influence on the global political system
Liberland is a controversial region known for its spirit of liberalism and advocacy for minimal government intervention (not recognized as a country by the international community). 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 Liberland's political governance capabilities but also provides new perspectives and solutions for global political governance.
Blockchain empowering elections is not just a forced narrative for Web3, but follows the objective law that technology changes life. What is most important in democratic elections is the effective expression and transmission of public opinion. Ensuring that everyone's thoughts are reflected and advocated during the voting phase, and ensuring that the advocated public opinion will not be tampered with or polluted in the counting environment.
Taking the recently concluded 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 actually reflect public opinion intuitively. Therefore, three days before the election on November 3, Harris led Trump by 1% in support rates, while on Polymarket during the same period, Trump’s support rate was 52% and Harris’s was 48%. If the polls were real, then Harris should not have lost, at least not so quickly.
But it is clear that Polymarket's predictions are more accurate. Blockchain technology has brought decentralized forecasting capabilities to Polymarket, which in turn has proven that voting based on blockchain technology can intuitively reflect public opinion.
Insights on how digital currency is changing the global landscape
Insight One: Blockchain technology can make political campaigns more transparent
New technologies, especially blockchain decentralization technology, are making global politics more transparent and credible. Just like in Liberland, this technology can decentralize power, prevent its abuse, and make politics fairer. This trend may be applied in more places in the future.
Insight Two: Virtual currency and blockchain influence world politics
The election of Sun Yuchen as Prime Minister of Liberland, along with the impact of virtual currency in the U.S. election, shows that virtual currency and blockchain technology are not just simple financial tools for making money; they are also means to change the global political landscape. As the status of cryptocurrency becomes increasingly important, it will appear more frequently in the changes and games of the global political landscape.
Insight Three: Virtual currency makes finance and politics freer
The inherent characteristics of virtual currency are changing the relevance and freedom of global political economy, emphasizing an effect of high and low, as its decentralized nature weakens state regulation and political control while promoting the free flow of capital and the integration and development of the global economy. Virtual currency, as a new investment and hedging tool, with its 'anonymity and freedom' and 'high risk and high return', has become a new choice for investors.
Challenges and limitations faced
Despite the enormous potential and influence of virtual currency, its development still faces many challenges and limitations:
First, virtual currency and its underlying technology, blockchain, have a high degree of technical complexity, making it difficult for ordinary voters to understand and grasp. This may lead to some voters giving up participation in elections or financial transactions due to unfamiliarity with technology, thereby reducing the popularity and influence of virtual currency.
Secondly, although blockchain technology itself has high security, cyber attacks or system failures may still threaten the security and integrity of virtual currency transactions. Additionally, the anonymity of virtual currency may also be exploited by criminals for illegal activities such as money laundering and drug trafficking.
Moreover, the existing legal and institutional systems cannot fully adapt to the development needs of virtual currency. For example, in terms of financial regulation, there are significant differences in countries' regulatory attitudes and policies towards virtual currency; in terms of political governance, innovative practices such as blockchain elections still face many legal and institutional obstacles. These issues limit the development and application of virtual currency worldwide.
The vision of blockchain influence
Overall, the case of cryptocurrency's influence in the economic and political fields is enough to demonstrate its significant current position, and no one dares to ignore its influence. There is a demand, and since it exists, it should be acknowledged; it is not a drug, nor is it illegal; it is a tool, a means. It depends on where you apply it. Cannabis has always been seen as a precursor to drug use. China's drug prohibition is because cannabis can lead more people to immerse themselves in the pursuit of illusory pleasure, seeking more stimulation and falling deeper. However, this does not affect 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 absorption. 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 entirely on your perspective. Although there are gray areas in blockchain and regulatory vacuums, this does not negate the reasons for blockchain. The focus should be on how to guide and effectively utilize the new technology of blockchain and uncover its underlying value. Currently, the existence of cryptocurrency and its underlying value are increasingly becoming an important role in driving global change.
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