Analysis of the Role of Blockchain Technology in Global Elections and Governance | TrendX Research Institute

Analysis of the Role of Blockchain Technology in Global Elections and Governance | TrendX Research Institute

In recent years, cryptocurrencies and their underlying technology, blockchain, have attracted widespread attention and discussion globally. From financial transactions to political governance, the influence of cryptocurrencies seems to be gradually expanding. Recently, Sun Yuchen, as the founder of the Tron network, was elected as the Prime Minister of Liberland and promoted the event of blockchain elections, and the victory of the pro-crypto industry team represented by Trump has pushed the connection between cryptocurrency and the global political landscape to new heights. Cryptocurrency is rapidly expanding its influence.

The Rise of Cryptocurrency and Its Impact

Since its inception, cryptocurrencies have attracted much attention with their characteristics such as "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 the financial market but also had a profound impact on the global political landscape.

Up to the present day, the influence of cryptocurrencies has indeed been expanding rapidly, but this has also been a winding and upward path. This is because, on the one hand, the decentralized nature of cryptocurrencies makes it difficult for countries to effectively regulate them, which to some extent weakens the financial sovereignty of countries and poses a challenge to the traditional political and financial systems. On the other hand, the cross-border mobility of cryptocurrencies also makes fund flows more free, giving the world more possibilities and greatly promoting the integration and development of the global economy.

It is well known that the economy and politics are interdependent. Today, the influence of digital currencies globally is no longer just a simple concept of "making money by trading coins."

Increasing Global Financial Influence

Recalling the previous cycle, when we talked about cryptocurrencies, we compared their market value with that of major companies such as Nvidia, Apple, and Microsoft. In this cycle, however, cryptocurrencies have been compared with the major national economies globally. When the market value of cryptocurrencies reached 1.7 trillion US dollars, its scale exceeded the GDP of Spain; after surpassing 3.3 trillion US dollars, it approached the level of France's GDP. Furthermore, in a further comparison, its market value ranks eighth globally, just behind major economies such as the United States, China, Japan, the United Kingdom, and India. This fully demonstrates the growing influence of cryptocurrencies in the global financial system. Its scale and growth rate are already sufficient to become a key force driving the transformation of the global financial system.

At the monetary and financial level, the Russian ruble has been kicked out of the SWIFT system, so for other countries' currency trading pairs, the ruble is considered a meme, a junk currency. However, the Russian government has been seeking various ways to conduct global procurement, with the main channel being through cryptocurrencies. We are not discussing right or wrong, it is irrelevant to politics. But blockchain and cryptocurrencies can at least meet some important needs of a country and its people. I think this is already very valuable. Moreover, the United States is also considering using Bitcoin as a strategic reserve. In fact, this sprint from $68,000 to $100,000 is 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 (an unrecognized country). The use of blockchain technology in elections ensures the transparency and traceability of the voting process, effectively preventing election 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 simply a forced narrative for Web3, but follows the objective law of technology changing life. The most important thing in democratic elections is the effective expression and transmission of public opinion. Ensuring that everyone's ideas are reflected and advocated in the voting process, and ensuring that the advocated public opinion is not tampered with or contaminated in the vote counting environment.

Taking the recent U.S. presidential election as an example, the Democratic Party has always relied on traditional polling methods such as media, portals, street interviews, and questionnaires to collect data, but polling data does not actually reflect public opinion intuitively. Therefore, three days before the election on November 3, Harris led Trump by 1% in support, while at the same time, on Polymarket, Trump's support was 52% and Harris's was 48%. If the polls were accurate, then Harris should not have lost, at least not so quickly.

But it is clear that Polymarket's prediction is more accurate. Blockchain technology has brought decentralized forecasting capabilities to Polymarket, and in turn, it also proves that voting based on blockchain technology can intuitively reflect public opinion.

Implications of Digital Currency for Global Dynamics

Implication 1: Blockchain technology can make political campaigns more transparent

New technologies, especially decentralized blockchain technology, are making global politics more transparent and trustworthy. Like in Liberland, using this technology can decentralize power, prevent its abuse, and make politics fairer. This trend may be applied in more places in the future.

Implication 2: Virtual currency and blockchain influence world politics

Sun Yuchen becoming the Prime Minister of Liberland, as well as the impact of virtual currency in the U.S. election, all indicate that virtual currency and blockchain technology are not just financial tools for making money, but also a means to change the world's political landscape. As the status of cryptocurrencies becomes more important, their role will be more prominent in the changing global political landscape and game.

Implication 3: Virtual currency makes finance and politics more free

The inherent characteristics of virtual currency are changing the relevance and freedom of the world's political economy. This emphasizes the high and low effects, where its decentralized nature weakens national supervision 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, its "anonymous freedom" and "high risk, high return" make it a new choice for investors.

Challenges and Limitations

Although virtual currencies have enormous potential and influence, their development still faces many challenges and limitations:

First, virtual currencies and their underlying technology, blockchain, have high technical complexity, making it difficult for ordinary voters to understand and master. This may lead to a decrease in the popularity and influence of virtual currencies due to some voters' unfamiliarity with the technology.

Second, although blockchain technology itself has high security, network attacks or system failures may still threaten the security and integrity of virtual currency transactions. In addition, the anonymity of virtual currencies may be exploited by criminals for illegal activities such as money laundering and drug trafficking.

Furthermore, existing legal and institutional systems cannot fully meet the development needs of virtual currencies. For example, in financial regulation, countries have varying attitudes and policies towards the regulation of 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 general, the impact of cryptocurrencies in the economic and political fields is sufficient to illustrate their pivotal position, and no one dares to ignore their influence. There is demand, and since it exists, it should be taken seriously. It is not a drug, nor is it illegal. It is a tool, a means. It depends on where you use it. Marijuana has always been seen as a precursor to drug addiction. China's ban on drugs is because marijuana will lead more people to indulge in the pursuit of illusory pleasure, while wanting to seek more stimulation and sink deeper. However, this does not affect the support of industrial hemp by various governments. Industrial hemp can be converted into ethanol or biodiesel, is a renewable energy source, and can also be used for soil remediation and adsorption of heavy metal pollution. Its fibers can be made into biodegradable bioplastics, and concrete made from industrial hemp has thermal insulation and fire resistance.

Therefore, whether blockchain is good or bad depends on the perspective. Although blockchain has gray areas and a regulatory vacuum, this is not a reason to deny blockchain. The focus should be on how to guide and effectively utilize new blockchain technology and explore the value behind it. Currently, the existence of cryptocurrencies and their underlying value are increasingly becoming important players in driving global change.

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