Bitcoin and Cryptocurrency Technologies

opened up to competition, we can potentially bring more transparency and public oversight to the
process.
Crypto, the state, and the big opportunity
There is a striking parallel between the emergence of the modern state and the goals of the
technology we have discussed in this chapter. In scaling society up from tribes and small groups,
governments have had to confront precisely the problem of enabling secure commerce and other
interactions between strangers. The methods may be very different but the goal is a shared one.
While a maximalist vision for decentralization might involve dismantling the state, this is not really
viable vision, especially when others who share our democracy want one. However, decentralization
through technology is not necessary in opposition to the state at all. In fact, they can be mutually
beneficial. For example, assuming well‐identified parties, transfers of smart property can use the
block chain for efficient transfers and still use the court system if there is a dispute. We think the big
opportunity for block‐chain technology is implementing decentralization in a way that complement
the functions of the state, rather than seeking to replace them.
It is tempting to think that things will get decentralized simply because the technology exists. But in
practice, there needs to be a compelling economic reason, such as government regulation that is
particularly onerous or inefficient, or a power imbalance that could lead to abuse. As one illustration
of this, people in various African countries have adopted cell phone minutes as an ad‐hoc currency
that is outside of state control and less subject to abuses of power.
To summarize, we’ve shown the technical blueprint for decentralization in this chapter, and also
critically examined the motivations behind decentralization. We encourage you to look for compelling
use cases of decentralization, in particular ones that integrate into existing legal and regulatory
practices.
306