Blockchain, Digital Nomads, and the Future of the Nation-State

For those of you who have been regularly reading my blog, this is a bit of a departure from my usual topics, but it’s one that I think will play an important role, not only in the future of travel but in the future of global governance.

As technology continues to advance, the world economy has and will continue to become more interconnected. Thanks to today’s technology, thousands of people are choosing to take their jobs with them on the road to travel the world. Since physical, geographical location no longer matters for a growing number of industries, it is inevitable that we will begin to see a shift in how the world is governed.

Disclaimer: This post contains affiliate links and I may earn a commission from any purchases. I would never advertise for something I didn’t fully love, and if you think you’d love it too, please help a girl out (I’m just tryna eat, y’all).

Also, the images are labeled for reuse from Google and not my own, because 1. I’m not traveling right now and running out of good ones, and 2. I don’t have any photos of blockchains, sorry.

The Age of the Nation-State

Since 1648, the Westphalian system of nation-states has defined the way that countries and their citizens interact with each other. For my non-International Relations and Political Science friends, nation-states are akin to what we now currently understand as countries, but with a little more nuance. Each nation-state is a block of territory defined by national borders and controlled by a central government.

The 1648 Peace of Westphalia established the principle of national sovereignty and non-interference by external governments, meaning that the national government of each nation-state was the supreme governing force for that block of territory. That government was was responsible for distributing goods and services to its citizens and providing protection from external interference.

In addition, one of the fundamental ideas of a nation-state was that it was typically (in theory) either built around one ethnic group or one larger, supra-ethnic national identity. For example, Spanish people live in Spain, French people live in France, British people live in Britain, etc. and these are nation-states built around this ethnic and linguistic identity. This is obviously imperfect and I could write an entire dissertation to explain all of the nuances and issues with this system, but I digress.    

The nation-state system was an effective way to govern in the pre-21st century international order, before travel was easily accessible to a large portion of the population, most of your citizens resided within your borders, and international trade was limited for the most part to physical goods. However, now that international travel is relatively easy and information goods and services flow freely across national borders via the internet, a system built on nations and national identity no longer really applies.

The Age of the Network

At the time of writing, people in over 39 countries have read my blog. Now take that idea and scale it even larger, maybe with a small company offering a digital product, or a large multinational corporation such as Amazon or Google, that has a global reach. Any company with a digital footprint can build a presence anywhere in the world, as long as someone there has an internet connection.

By the same logic, you can work for a distributed company or develop your own online business and work anywhere in the world with an internet connection, as many digital nomads have done and will continue to do. Why live in a major Western city and pay $1500 for a one-bedroom apartment and commute 45 minutes to an hour each way to work, when you can pay the same for a house on the beach somewhere else with no commute time?

The world is growing increasingly interconnected, and as it does, your physical, geographical location matters significantly less. The modern world is now governed by trade flows, internet cables, and functional geography rather than political geography and physical location. As geography begins to matter less, so does nationality and country of origin, so long as you have the skills necessary to be competitive in the digital economy.* You could be an American or European citizen with a business registered in Estonia (due to their nomad-friendly e-residency program) and live and work on a beach in Thailand. You can work from anywhere, so therefore you can live anywhere, and therefore the color of your passport and where you were born matters much less.

*Obviously there’s a huge caveat here for people who don’t have access to the digital economy or international travel due to their country of origin or many other factors, but I’ll address that in a forthcoming post on passport privilege.  

As you rely more and more on the internet to eke out your existence, there’s little choice but to share large amounts of personal data (like your social security number, passport information, driver’s license number, etc.) over a growing, worldwide network. And logically, the more information you share online, the higher the chances of that information falling into the wrong hands. Instead of just letting your data loose into cyberspace, what if there was a way to store all of it in a secure, private, encrypted digital hub and control who has access to it?

Here’s where the technology comes in.

Blockchain and decentralized identity.

First of all, what is blockchain and why is it important? You may have heard of it in the context of Bitcoin, but its applications extend far beyond cryptocurrency.

Blockchain is a decentralized, distributed ledger, spread across a vast network of computers, or nodes. It can be used to store information of any kind, but some of the most common current use cases for this technology are cryptocurrencies, property records, healthcare, voting records, banking, and many others due to the immutable nature of the way the data is stored. Each block of information, regardless of size, has its own hash code, and must match the hash code of the previous block in order to be accepted into the chain. Once the block is accepted, it is incredibly difficult (if not impossible) to change due to the amount of computing power required, so the information is secure.

If you want to read more about how blockchain works, check out this great infographic from Reuters here.

Because the blockchain network is decentralized, no one person controls the information, thus eliminating the need to trust the other people in the network with your data. If you trust in the algorithms to store your data in an immutable way, there is no need to trust or even know who the other people in the network are. This is why blockchain is especially useful for things like property records in countries and regions that experience a relatively high rate of government turnover. If the records are immutable, even if the government that originally verified that you do in fact own your house no longer exists, the record that establishes you as the property owner cannot be modified or destroyed.   

What if you were able to store information such as your social security number, passport information, driver’s license number, property records, banking information, etc. in a secure, encrypted token that you can control, rather than relying on your government? Because that token is part of a blockchain, it is much easier for your government to verify your identity and confirm that it is indeed you trying to access your income tax, social security information, or bank account from abroad over the internet rather than someone else because you hold the secure private key to access that information.

The process of identity verification becomes much faster and requires much less time and energy on behalf of the government / organization trying to verify that you are who you say you are, allowing those resources to be diverted towards things like helping a greater number of unbanked people access the financial system, and other necessary functions.

Because your information is stored in the blockchain which is distributed across millions of nodes, your records can never be destroyed or lost. If your identity is stored within a national blockchain and you lose your passport, you could simply go to the US embassy and verify your information using your private key, and they can replace your passport and send you on your way.

Blockchain and governance

In our current system, your home government is your source of truth. And while blockchain technology will never completely replace the role that government plays in providing goods and services to society, it will cut down on processing time and identity fraud, and allow you to have greater control over your information. The increasingly mobile populations of the future will need a way to easily and securely access and store personal data, and blockchain is that solution.

Right now, local governments in the United States and Europe are toying with the idea of adopting blockchain technology and smart contracts to streamline their current services and redefine the relationship between citizens and their government in terms of data sharing, transparency, and trust.

Five to ten years down the road, we may see cities and states adopting blockchain technology to track records. Maybe your driver’s license, library card, bus pass, and more will all be linked to your verified identity. We may see national-level blockchains to verify citizenship, voter registration, and social security information to cut down on fraud.

But in the interconnected world, what if it goes even bigger? We’re in a key turning point for the future of the nation-state as a governance unit. State and municipal governments play a much larger role in directly providing goods and services to their citizens than federal governments do. Once your identity is stored within a blockchain, it can be accessed and verified from anywhere using your private keys. If individuals can trade and interact with verified people and companies around the world directly via the internet, what role will federal governments play? At that point, does your country of origin matter, and who will be left behind?  

Since blockchain technology is still in its infancy, it’s hard to speculate about how it will play out in execution, and of course there are many questions, both about whether or not we can, and whether or not we should adopt this technology at the local, national, and international level. But as the world economy becomes increasingly interconnected, unless national governments are able to keep up with the pace of technology, the nation-state as a governance unit may become ultimately less important.  

 

If you’re like me and find functional geography and the future of the interconnected world economy fascinating, you should check out Connectography by Parag Khanna for a thought-provoking read.  

I’d love to hear your thoughts on how you think this technology will play a role in the future of travel, digital nomads, and global governance. Let me know below in the comments!

xoxo,

Hanna (Bubu Backpacks)

14 thoughts on “Blockchain, Digital Nomads, and the Future of the Nation-State

  1. Really interesting perspective. Have you ever read Saskia Sassen’s stuff on global assemblages? I think it would dovetail nicely with some of the directions you’re thinking in here.

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    1. I haven’t, but I’ll definitely check it out! The more I dig into this stuff, the more interesting it gets, so I’m pretty much reading everything I can get my hands on at the moment, starting with Parag Khanna’s Connectography and leading into all his other work.

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  2. Wow! This a great article. Lots to think over and take in. Thanks for taking the time to write something so thorough and in-depth. Looking forward to your future passport post!

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  3. So, I’ve gone from never having heard of blockchains to being fascinated. This is a VERY well written piece. Thank you. I’m definitely gonna check out Connectography!

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