Are cryptocurrencies good for democracy?

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One part of discussions regarding cryptocurrencies is how such currencies are interacting with and impacting democracy. There are several reasons why cryptocurrencies should be seen as good for democracy when it comes to making it easier and convenient for humans to participate in conversation and decision-making processes. Here are some examples.

Community

Commonly, cryptocurrencies lead to organising communities of supporters and developers. Such communities are often using applications like Telegram and Discord in order for members to engage in discussions. Specific cryptocurrencies as Cardano and Seeds have established communities with decentralised direct and liquid democracy. This means that members can vote on different topics and thereby influence the development of their cryptocurrencies since one key part of crypto and decentralisation is the absence of centralised public authority as a government. Members can even delegate their votes and stakes to other members when it comes to democratic community governance.

Freedom

In order for every democracy, and especially representative democracy, to function, it is essential that different freedoms such as expression, assembly and press are respected. One famous case of, for example, Bitcoin making a difference in Venezuela, where the country’s undemocratic government has tried to prevent Venezuelan citizens from using the American dollar at the same time as the internal currency of Bolivar has lost much of its value. This has led to many Venezuelans starting to use Bitcoin and other cryptocurrencies for economic transactions in everyday life, such as for buying food and drinks.

Monetary governance

Individuals who are members of cryptocurrency communities are often negative or sceptical about how certain governments are handling money as via quantitative easing policies and aggressive central banking during periods of larger financial problems. Among famous examples are how the American and European central banks behaved during the end of the 2000s and the beginning of the 2010s. Since modern central banks are independent of direct political control, including democratic parliaments, they cannot be governed democratically. Central banks are technocratic institutions, while cryptocurrencies as Cardano are based on democratic governance where community members are involved in the design process and having voting rights.

Transparency

One of the original ideas with cryptocurrency, like Bitcoin, is transparency and integrity. This means that all actions and transactions with cryptocurrencies are registered on immutable, safe and open blockchain systems. Due to blockchains function and construction as a decentralised public ledger and database, aspects as hacker attacks, digital violations and fraud attempts can be prevented. This has partly to do with “blocks” in the blockchain constantly interacting with each other and refusing to accept a new block with a transaction attempt if the other blocks identity it as a problem. The transparency aspect is especially important when it comes to voting as in decentralised communities.

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