A Brief Analysis of the Role of Blockchain Technology in Global Elections and Governance

In recent years, cryptocurrencies and their underlying technology, blockchain, have garnered widespread attention and discussion globally. From financial transactions to political governance, the influence of cryptocurrencies seems to be gradually expanding. Recently, the election of Sun Yuchen as the Prime Minister of Liberland and his promotion of blockchain elections, along with the victory of the pro-crypto team represented by Trump, have further elevated the connection between cryptocurrencies and the global political landscape. Cryptocurrencies are rapidly expanding their influence.

The Rise of Cryptocurrencies and Their Impact

Since their inception, cryptocurrencies have attracted considerable attention due to their characteristics of "decentralization," "anonymity," and "high security," especially Bitcoin, which has now 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 also had a profound impact on the global political landscape.

To this day, the path of cryptocurrencies is indeed becoming broader and brighter, but it is also a winding and upward road. This is because, on one hand, the decentralized nature of cryptocurrencies makes it difficult for states to effectively regulate them, which to some extent undermines national financial sovereignty and poses a challenge to traditional political and financial systems; on the other hand, the cross-border flow of cryptocurrencies allows for freer movement of funds, providing the world with more possibilities and significantly promoting the integration and development of the global economy.

As we all know, the relationship between economy and politics is complementary. Today, the influence of digital currencies globally is no longer a simple concept of "making money from trading coins."

Increasing Global Financial Influence

Looking back at the last cycle, when we talked about cryptocurrencies, we compared them to the market capitalizations of major companies like Nvidia, Apple, and Microsoft. In this cycle, cryptocurrencies are now being compared to the economies of major countries. When the market capitalization of cryptocurrencies reached $1.7 trillion, it surpassed Spain's GDP; after breaking $3.3 trillion, it approached France's GDP level. Further comparisons show that its market capitalization ranks 8th globally, just 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, with its scale and growth rate becoming a key force driving the transformation of the global financial system.

In terms of monetary finance, Russia's ruble has been kicked out of the SWIFT system, making it a meme or a junk currency for other countries' currency transactions. However, the Russian government has been seeking various ways to conduct global procurement, with cryptocurrencies being a primary channel. We do not discuss right or wrong, nor do we concern ourselves with politics. But blockchain and cryptocurrencies can at least meet some important needs of a country and its people. I think that alone is quite valuable. Moreover, the United States is also considering Bitcoin as a strategic reserve. In fact, the recent 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 area 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 Liberland's political governance capabilities but also provides new perspectives and solutions for global political governance.

Empowering elections with blockchain is not merely a forced narrative for Web3, but rather 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 process, and that the advocated public opinion is not 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 accurately reflect public opinion. Therefore, three days before the election on November 3, Harris led Trump by 1% in support rates, while on Polymarket, Trump's support was at 52% and Harris at 48%. If the polls were accurate, Harris should not have lost, at least not so quickly.

But it is clear that Polymarket's prediction was more accurate. Blockchain technology provided Polymarket with decentralized predictive capabilities, which in turn proved that voting based on blockchain technology can accurately reflect public opinion.

Insights on How Digital Currencies Change the Global Landscape

Insight 1: Blockchain technology can make political campaigns more transparent

New technologies, especially decentralized blockchain technology, are making global politics more transparent and trustworthy. 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 2: Virtual currencies and blockchain influence world politics

The election of Sun Yuchen as Prime Minister of Liberland and the influence of virtual currencies in the U.S. elections demonstrate that virtual currencies and blockchain technology are not just simple financial tools for making money; they are also means that can change the global political landscape. As the importance of cryptocurrencies grows, they will increasingly appear in the changes and games of the global political landscape.

Insight 3: Virtual currencies make finance and politics freer

The inherent characteristics of virtual currencies are changing the relevance and freedom of global political economies, emphasizing a high-low effect. 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, their "anonymity and freedom" and "high risk, high return" make them a new choice for investors.

Challenges and Limitations Faced

Despite the enormous potential and influence of virtual currencies, their development still faces many challenges and limitations:

First, the high technical complexity of virtual currencies and their underlying blockchain technology makes it difficult for ordinary voters to understand and master. 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.

Second, 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 be exploited by criminals for illegal activities such as money laundering and drug trafficking.

Moreover, 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 toward 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.

Envisioning the Influence of Blockchain

In summary, the influence of cryptocurrencies in the economic and political fields is sufficient to demonstrate their current significant position, and no one dares to ignore their impact. The demand exists, and since it exists, it should be acknowledged. It is neither a drug nor illegal; it is a tool, a means. It depends on how you use it. Cannabis has always been seen as a precursor to drug use. China's prohibition of drugs is because cannabis can lead more people to indulge in the pursuit of illusory pleasure, seeking more stimulation and becoming increasingly trapped. However, this does not affect governments' support for industrial hemp. Industrial hemp can be converted into ethanol or diesel, serving as 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 on your perspective. Although there are gray areas and regulatory vacuums in blockchain, this does not negate the reasons for blockchain. The focus should be on how to guide and effectively utilize new blockchain technologies to uncover their underlying value. Currently, the existence of cryptocurrencies and their underlying value are increasingly becoming important roles in driving global change.