The article explores a world run on blockchain - tax collection, use of taxed money, role of government bodies to make rules and come up with a Whitepaper for ICO for their own country's crypto-currency.
Imagine a world where Governments runs on the Blockchain. All the inwards and outwards data of all the citizens are automatically recorded on a distributed ledger on the Blockchain. No need for any politicians or any ruling party. Due to the advances in computing, everything is digital now and this is achievable.
What are the steps? The Government need to come up with an Initial Coin Offering (ICO) - it's own currency on the Blockchain. Estonia is the world's first government who has made such an announcement. Many governments should follow.
Now, using Ethereum, this coin must have smart contracts which are rules based on which the members of the community get rewards or tokens.
The underlying rules must have a master rule of some cap which is reducing over time - much like any valuable asset like gold or bitcoin. This is called controlled supply. This is the key rule on the blockchain and once written, no one can edit it.
Let’s look at a few examples of rules to be built; we could build a simple rule stating that as a part of the Blockchain network, I as a citizen will pay ‘x’ amount of the new crypto-coin as fees for the government to use it for road developments.
In return, I get to use the roads in the country and the state gets "subscriber fees" as revenue to make the roads. Since all citizens would be on the blockchain, if a citizen who doesn't opt-in in this road tax system uses the road, he will be penalised accordingly. This makes the system opt-in model, much like Netflix.
We see that there is a lot of thought to be put on the side of making rules- which do not back-fire. This is where we need the central authorities to now put their minds. This will be the new role of the government - to make blockchain rules and come up with a solid whitepaper.
So, let’s get started and help the governments by thinking of the rules required to automate "tax collection" and "penalty" system using a set of rules on the Ethereum network instead of fighting the blockchain. The blockchain is like a pandora's box, it has been opened; there is no way to close it now. Better we understand it quickly and help each other - government and individuals to have a better world.
What kind of rules can you think of? Mention in the comments below.