Welcome back to the final part of my article series on the Marshallese sovereign, the new hybrid crypto-fiat-currency being issued as the legal tender of the Republic of the Marshall Islands.
So far in this series, I’ve explained how SOV can act as a bridge connecting the Blockchain Island to the real economy mainland; explained why SOV is a better way to address current regulatory concerns than traditional fiat currencies like the US dollar; why a sovereign cryptocurrency is the only viable way to power the Internet of Things in the timescales demanded by industry; and how SOV can square the circle between individual privacy and the need for oversight.
These are all important issues, but they’re mostly driven by short- and medium-term concerns. Practically, this is the right approach: it’s hard to effect change by focusing on far-off and hypothetical problems or benefits. But tech companies are coming under increasing scrutiny for their shortsighted attitude to everything from privacy and the environment to global inequality and their role in maintaining the very fabric of society. And rightly so: Facebook’s “Go fast and break things” motto is looking increasingly naive, now that we’re starting to see just how broken things can get…
So today I’d like to focus on the long-term implications of SOV and why I feel SOV offers genuine solutions to previously intractable questions of sustainability and global cooperation, and why the Marshallese are perfectly placed to be the custodians of this powerful and potentially world-changing technology.
UN Sustainability Goals
The Marshallese certainly cannot be accused of short-termism, although perhaps that’s because problems which naively seem “long-term” to us are an imminent threat to them.
The RMI is facing real existential threats due to climate change. The islands have an average elevation of 2m above sea level, and the ecosystems of the coral atolls are incredibly fragile. The Marshallese have long been champions of global climate initiative, and a major part of their motivation for launching SOV is to raise funds to tackle climate problems domestically and globally. According to the SOV white paper, 10% of the funds raised in the initial sale of SOV will be placed in a dedicated trust fund called the Marshallese Green Climate Fund.
In the long term, SOV technology can support the green agenda in further ways; for instance, Vinay Gupta recently suggested including carbon credits as direct components of the token. The notion could be expanded even further, by creating a tokenization of more comprehensive global environmental KPIs covering not only air, but also soil and water. By combating pollution and resource overexploitation in all its forms, SOV could be the currency of choice for any business or individual hoping to make an impact on the environment.
Blockchain itself, and particularly proof-of-work, has long been criticised for the amount of energy it uses. The SOV infrastructure should be built on top of third-generation consensus mechanisms (like Avalanche), which would provide quick finality, low latency, high throughput, open participation, with a green, mining-less and sustainable environmental impact, and providing fast consensus at scale with unprecedented levels of decentralization.
All of these actions would contribute to the UN Sustainability goals: Nos. 9 (Industry, Innovation and Infrastructure), 12 (Responsible Consumption and Production), 13 (Climate Action), 14 (Life Below Water) and 15 (Life On Land).
Decentralized Global Governance
The Green Climate Fund is just one of several trust funds established by the Marshallese government to benefit from the international sale of SOV. In addition to a fund to support the Government’s budget in the face of the imminent discontinuing of US support, there are also funds to address long-term health and inequality in the Marshall Islands.
One of the most interesting aspects of SOV is how it affords brand new monetary policy options to the Marshallese government. Instead of relying on a central bank model, new SOV can be distributed directly to wallet holders. The government has taken the bold step of removing their ability to print money, and instead fixing the annual supply growth algorithmically as part of SOV’s protocols. Both of these are attempts to address the unfairness of financial systems based on central banks, where currency holders have no control over whether their savings are whittled away by inflation, quantitative easing, and fractional reserves.
RMI has also experienced the ordeal of having its islands exposed to nuclear and biochemical testing. The water, soil, vegetation and biofauna were lethally contaminated as a result of US nuclear tests. The populations of the affected atolls were subject to human radiation research programmes for decades, and exposed to environmental, biological, cultural and emotional losses; with consequential dislocation and severe health impact. Worst of all, this all happened during a time of supposed peace.
In addition to establishing a fund to tackle the aftereffects of these nuclear tests, RMI have campaigned to ban nuclear weapons. Nuclear weapons are a classic example of a global coordination problem: it benefits no-one that they exist, yet once someone has them, everyone is pressured to keep pace. The simplest solution is for everyone to agree to ban them, yet non-proliferation treaties and international laws don’t seem to have a dent in the issue. What can be done?
These issues (climate, nuclear proliferation, and wealth inequality) are three manifestations of the same problem: how to properly coordinate in a global connected world.
And there’s more to inequality than just money. Levels of power and autonomy are also grossly unequal, to the detriment of everyone (even being one of the 1% or the 0.01% doesn’t count for much in the face of climate disaster or global societal breakdown). We have global organizations such as the UN designed to address these coordination issues, but few would say they’re working as successfully as we would like.
Whether you think the answer lies in more regulation or greater power for free markets, we still need the same things: fast and free flow of information to properly assess the costs and benefits or our actions; strong identity protections; and the ability for everyone to make their voice heard without fear of reprisals. All balanced with the ability to identify and punish acts which we agree should be illegal.
All the citizens of the world need to come together and recognize the shared, common objective of surviving in a sustainable way, with unity of purpose. Technologies such as SOV pave the way for this, by affording everyone direct participation in global issues.
The infrastructure underlying the SOV has this potential; because what is the long term potential of the technology underlying a crypto-fiat-currency? Clearly: self-sovereign identity with multiple attestations, zero-knowledge proofs, multi-key signatures, automatic regulatory compliance, privacy protection, and even voting will be part of the infrastructure. It is in essence all that is needed for a decentralized global governance infrastructure. An infrastructure where there could be direct democratic representation, with one person, one vote.
Note that this is very different from the spectre of a One World Government or a nefarious Deep State with its tentacles in every pie. Blockchain allows us to create voting systems which are private, transparent, and impossible to manipulate.
This is also why the Marshall Islands is such a perfect place to site this technology. The Marshallese have no interest in (or capacity for) global domination. Their culture is based on sharing, sustainability, and decentralization of power and responsibility. SOV can enshrine all these values and help build a global system which enshrines them too. The Marshallese government has already pledged to cede control of SOV’s governance to both the protocols of the currency and the independent SOV Development Foundation, and the Foundation’s mandate includes a progression from a directorship model to one based on governance via the SOV blockchain.
Naturally the full transformation to global governance and cooperation will take a long time. But that’s fine. It’s time to leave “Go fast and break things” behind, and instead focus on steady and sustainable progress. Just as it took hundreds of years to create the kind of democratic societies we have today; evolving from the voting of the elites to the full participation of the masses, affording franchise to category after category. Likewise, we could build a system where the entire of the world’s population participates in deciding about its future.
The Real Blockchain Island
I started this article series by talking about how a metaphor I created took on a life of its own: the Blockchain Island, which quickly morphed from being an encapsulation of the problems faced by blockchain in connecting to the wider world to a branding message for the island of Malta.
Malta was ultimately unable to fully commit to the idea of a fully virtual jurisdiction, but the Marshallese have shown that they’re willing to take the next step.
Seventy years ago, the Marshall Islands was identified as the perfect testing ground for destructive nuclear technology. Now it is once again the perfect technological testing ground, but this time the technology is wonderful and optimistic, and it’s happening on the RMI’s own terms. The technology is here. We just have to make good use of it. At the end of the day, this tiny blue planet we all share and live on together is also an island, one faced with all the same constraints as Malta or RMI, as well as all the same opportunities. Let’s make it into a better place, together.