When your city goes blockchain- POLITICO
With help from Derek Robertson
SAN BARTOLOME PERULAPIA, EL SALVADOR—In September, when President Nayyib Bukele made Bitcoin legal tender in El Salvador, it instantly turned his country into the most-watched official experiment in the cryptocurrency world: how a nation-state would pull it off- it by adopting a system designed to work? approximately nation state?
We will take a closer look at this shortly. But on a reporting trip through El Salvador this week, something else became clear to me: the country itself is taking this moment as an opportunity to experiment in ways that go way beyond bitcoin. .
The back-end of Bitcoin is blockchain technology – an idea whose implications go far beyond digital currency. And on the outskirts of the capital, another blockchain experiment is quietly preparing in this city of around 10,000 inhabitants dotted with colorful frescoes.
Over the next year, the 44-year-old Mayor of San Bartolomé Perulapía, Ronal Ortiz, will oversee the transfer of his city’s land records to a blockchain-based system. The idea is to use NFTs – unique digital records held on the blockchain – as digital verification stamps for official documents.
In recent years, companies and associations have set up various projects in developing countries to put land ownership records on blockchain databases. Proponents say these systems offer transparency and clarity in parts of the world where land ownership has not been formally registered or where records are susceptible to manipulation by corrupt officials.
President Bukele’s embrace of Bitcoin gave Ortiz’s project an extra boost. The mayor is an independent, but last month Bukele’s administration sent representatives to the project’s launch party on the roof of the Bambu City Center, a shopping mall in San Salvador.
Such initiatives of course come with risks: these new record-keeping systems, the underlying blockchain networks they rely on, and the companies promising to implement them are all relatively new and untested.
New digital systems, whether blockchain-based or not, also come with learning curves, for officials and citizens alike.
In San Bartolomé Perulapía, Mary Carmen Orellana, a 64-year-old artisan who makes clothes with local indigo – a blue dye that was central to the country’s economy during colonial times – expressed her skepticism. She said she was intrigued by the possibility of accessing the portal herself to record changes in the status of her land, but worried about having to master new technologies. “I would need someone to really explain to me, ‘How is this going to work?'” she said.
So why entrust your land records to this new method, rather than a simple digital upgrade from a traditional IT provider?
The city currently relies on a paper system and an Excel spreadsheet. Ortiz told me he was drawn to the security and reliability benefits of storing information in a distributed database, rather than on local government computers. (Speaking via video at last month’s conference opening nightHaiti’s former Prime Minister Laurent Lamothe recounted the chaos that ensued when a 2010 earthquake destroyed many of the country’s property records, leading to the widespread conflicts on land ownership.)
But more important than the theoretical technical benefits are the immediate tax advantages: the company behind the new system, DelNorte TerraVision, offered to do the work for free in order to establish a presence in El Salvador.
The Honduras and Miami-based company even foots the bill for launch parties like the one at downtown Bambu. “Politicians really like it,” said company CEO Anton Glotser, “because they can sell it to their constituents.”
The flashy rooftop party provided a stark contrast to Ortiz’s modest office, where a wall-mounted whiteboard listed current city projects. Number one on the list was ‘drinking water’, an ongoing problem in this impoverished country.
With problems like this, why spend time trying out a state-of-the-art archiving system?
Ortiz said he needs to update the property records anyway, to make sure he collects all property taxes owed to the city. He also plans to use the platform to collect other local business data that he says can help attract investment to the city.
“We’re not going to be a first world city when we need roads and power and water,” Ortiz told me. “But we will definitely try to use first-world tools to make our city self-sufficient.”
A little tidbit floating around in the tech (and media) world today: Elon Musk has offered to buy Twitter.
After becoming the social media company’s biggest shareholder last week and toying with the idea of joining its board, the rocket tunnel energy mogul decided he’d rather own the company, stating in an SEC filing that Twitter has “extraordinary potential” that it would “unlock” by securing it as “the platform for free speech worldwide.”
Arguably more than any human being on the planet, Musk embodies the concept of “permissionless innovation.” A cardinal virtue for libertarians and many technologists, permissionless innovation argues that entrepreneurs create the most benefit for society when they are allowed to operate unfettered by regulations that would otherwise force them to wait for approval from the state before acting. So if you’re the richest man on earth and you want something, you just create it – or here, offer to buy it – and drop the tokens where they can.
Consciously or not, the principle drives the technologies this newsletter covers most closely: Satoshi Nakamoto did not ask the Federal Reserve or the SEC if he could create Bitcoin. He just did. A decade and a half later, $2 trillion is invested in crypto, and the state is only just beginning to catch up.
I sent an email Adam Thiererprincipal investigator at the Mercatus Center at George Mason University who literally wrote the book on “innovation without permission” to ask his opinion on Musk’s Twitter movement. No points for guessing: Thierer called Musk “the most important catalyst for change in the tech market and in the political world.”
“Even if everything he tries fails,” Thierer said, “the world is better off for him trying to shake up those markets, and the policies that govern them.”
If you’re one of the public watchdogs dissatisfied with the results of the quick move and break era, that’s obviously concerning. Not all innovators are as rich as Musk or as brazen. But every corner of American industry and technology has its own group of “permissionless innovators,” with their own brand of charisma, their own dedicated supporters, and their own stubborn, inherent ability to stay one step ahead of the the regulatory landscape. — Derek Robertson
Will it be wiki versus crypto? Really?
Wikipedia is one of the earliest, and arguably most successful, examples of a truly “decentralized” platform – open source, built on community contributions and with all of its iterative history laid bare for anyone to to see her. Which makes it somewhat ironic that yesterday its editors voted overwhelmingly for ban cryptocurrency donationsciting the environmental impact of the technology and the possibility that such a thing could be seen as an endorsement of crypto at large.
Wikipedia’s reputation, both within its community and outside, is based on a commitment to neutrality. In this light, the exclusion of certain forms of giving may seem unfairly exclusive or, gasp, editorial. (Never mind the fact that only 0.08% of the Wikimedia Foundation’s annual revenue comes from crypto.)
But high-profile debates over how much “neutrality” the platform is willing to support have troubled it since its inception, most recently in the case of editor-in-chief Ksenia Coffman. recently featured in Wired for his crusade against Nazi thoroughness and his apology on the platform. Even though Wikipedia has been able to maintain good vibes and public trust where many other digital platforms have not, it is another reminder that to try as our futuristic-innovators might, there is no there’s no way to decentralize yourself out of the good old human conflict mode. — Derek Robertson
Keep in touch with the whole team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]); Constantin Kakaes ([email protected]); and Heidi Vogt ([email protected]).
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