Tag: blockchain

Why Blockchain and Bitcoin Are Becoming a Part of Life

Mason Mohon |@mohonofficial

The Bitcoin naysayers live their life in glee these days, happy that cryptocurrency is finally dead! Well, dead again. Clearly, if something can die multiple times, its death carries far less weight. Cryptocurrency, along with Bitcoin, is in a continuous cycle of death and resurrection. In the short term, this makes it a scary investment. In the long term, though, Bitcoin has a lot of potential and is likely to become a part of the dominant social order. It will do this along with its underlying technology: blockchain.

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Quadriga Cryptocurrency Loses Password to $190 Million

Ralph Tiberius Augustus | Brazil

The value of our digital belongings is starting to overlap with the value of our physical goods. An example is the ever-growing popularity of cryptocurrencies such as Bitcoin, Litecoin, Ethereum, etc.

Continue reading “Quadriga Cryptocurrency Loses Password to $190 Million”

This Blockchain Project Could Save Venezuela

James Sweet III | United States

Venezuela’s currency, the Bolivar, is worthless due to hyperinflation that shows no sign of stopping. Venezuelan citizens are starving, forcing them to resort to rationing the little bit of food they have and stealing food that they can find. The crisis is constantly evolving due to the failed policies of the Maduro regime, but with the help of the blockchain, the situation could become stabilized, saving the families of the nation.

AirdropVenezuela wants to help the impoverished families of Venezuela by donating $10 to 100,000 Venezuelan households, which can be achieved by raising $1 million via cryptocurrency donations. The money, once received, will be converted into the local currency, allowing the families to purchase supplies that they desperately need. The leader of AirdropVenezuela is Steve H. Hanke, a professor at John Hopkins University. Hanke is also a Senior Fellow at the Cato Institute, serving as Director of the Troubled Currencies Project. The project is based on the Airtm platform, which allows you to save your local currency’s value by pinning it to a more stable currency, specifically the United States Dollar.

The civil unrest in the nation makes it dangerous to leave your house, which is another reason why Hanke is leading the AirdropVenezuela project. “We provide in effect a clearinghouse that allows for the exchange of bolivars for dollars and vice versa,” said Hanke to Forbes.  By allowing money to be stored and transferred via the blockchain and the cloud, the time that Venezuelans spend in public is minimized, allowing them to live a safer life while also getting the resources that they need to provide for their families.

The project, while mainly benefitting the families of Venezuela, could help boost the cryptocurrency market. Instead of being risky investments, cryptocurrencies will become a medium of exchange pinned to more stable currencies. Airtm, if successful, will revolutionize the use of blockchain technology by allowing it to have a more practical use. “You could now have the additional demand for cryptos for use as a medium of exchange versus what you have now which is only the speculative demand,” says Hanke.

The Airtm platform will also show the possibility of putting into place a free market exchange rate. Venezuela has a fixed exchange rate, making it hard to exchange Bolivars in the market. If you want to donate to or learn more about the AirdropVenezuela project, you can click here to visit their website.

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Decentralizing Business: How Less Government, Not More, Will Help the Workers

By Mason Mohon | @mohonofficial

Business is bad – or at least that’s the contemporary cultural outlook. To the disdain of the Randian acolytes, society really hates businessmen. They are seen as gross, mean, and evil cheaters that act for nothing but profit. They would see the world burn for the fattening of their checkbooks. This seems to primarily be the product of the modern film and television industry. The mantra “it’s just business” has infected our entertainment and shows no signs of going away.

But the outlook we have toward businesspeople is not completely accurate. Absent government involvement, those running businesses have to serve the needs of consumers. The good entrepreneur is always looking out for demand that they can provide supply for. If they do not, they will gain no customers and thus no profits. It is the nature of private industry.

So, at a basic level of analysis, the cultural view of traditional business is inaccurate. But they may be onto something. Maybe the nature of “being business” isn’t bad, but the traditional structure could be. To explore the workings of human interaction and development, we can look towards the economist and philosopher F.A. Hayek. In Hayek’s Individualism and Economic Order, he explains:

[W]e discover many of the achievments on which human institutions rest have arisen and are functioning without a designing and directing mind… the sponatneous collaboration of free men often creates things greater than their individual minds can ever comprehend. (Page 7)

Often, this analysis is purely extended to governments. After all, this is part of the Hayekian critique of command economics and collectivist governments. Yet, I believe that Hayek’s analysis could extend further than the government. Somewhat ironically, this analysis could be extended so far as to protect the communist goal of protecting the sovereignty of workers.

When applied to governance, Hayek’s critique makes clear that one man at the top cannot do any project justice. Especially when it comes to large economies, no one human can hold all of the information in their mind so as to properly organize. This is the fatal flaw of any command economy. Technocrats and central planners don’t know what they’re doing – but are they really to blame? They’re only human.

Because of the human inability to hold so much information at any point, command economies are ultimately doomed to failure. This is seen most recently in Venezuela, an economy that seems to merely echo the broader downfall of command economies in the 20th century. One in charge cannot make a proper decision about what to produce, in what quantities, and with what material.

This is where business as an edge of state-based industry. Because of the profit and loss mechanism of private firms, they can accurately determine what to produce. If consumers do not want what a firm produces, the firm will go under. If the business produces too much, the surplus of goods will result in damage to the business’s profits, thus causing them to reduce production. If they are using bad material that damages the quality of the product, consumers will move to a competitor. If they are using material that is too good, it will hike up prices past the equilibrium price level, once again resulting in consumers going to a competitor for a less luxurious yet more affordable product.

But this does not mean that all is perfect in the traditional business structure. Samuel Edward Konkin II explained that the contemporary business model, “especially the corporate hierarchy, [is] an imitation of the state and not the market.” Large corporations have presidents with subordinates, along with a board of directors, making up a congress of sorts. Business has begun to echo the state because the state has entrenched itself into the minds of society. Instead of being the spontaneously organized collection of minds that Hayek described, business has become a rigid corporate structure mirroring the process of traditional government.

And this has its tolls. Top-down business approaches will be slower, simply because of the problem of knowledge. Hayek’s argument about knowledge being the limitation of human leadership applies to business too. As firms get larger, it gets increasingly difficult to make decisions that will benefit the company as well as the consumers.

In addition, as a business grows, it gets clunkier. Bureaucracy begins to develop, resulting in sluggishness when it comes to consumer service. In addition, once a business is large enough, it can become detached from the wants and needs of consumers, sometimes even ignoring them altogether. This has become especially apparent in tech giants such as Facebook and YouTube. The platform users were originally consumers that the platforms aimed to serve. This took a turn, though, when users turned into products in the form of psychological profiles to sell to advertisers. These massive corporate structures have become detached from those they originally aimed to serve. They have become more intent on developing tools to get users psychologically addicted rather than develop products that the conscious mind of the user actually desires.

So what would an alternative look like? We need something that avoids the problem of having a commander with limited knowledge and potentially other advantages. The proper alternative is decentralizing authority. This could take various forms when it comes to larger corporations. In some instances, it may look like a pure workplace democracy. In others, it may look like a technologically integrated workspace, utilizing blockchain to maintain order but reduce the need for corporate hierarchy.

Workplace democracy is already somewhat commonplace and seems to have some benefits. Nigel Nicholson, a professor of organizational behavior at London Business School, wrote in the Harvard Business Review that a democratized workplace that includes the workers in business decisions is the only type of workplace model that takes human nature and behavior into consideration. Once again looking back to Hayek, we can see that this makes sense. The combined knowledge of those that are hands-on with the day to day business will usually be more effective than a detached administrator and his one-man knowledge.

Furthermore, workplace democracy seems to have psychological benefits. Depression researcher Johann Hari explained that individuals like to feel like they’re in control of their own lives, and if they work a job where someone makes all decisions for them, it can lead to a feeling of helplessness. As a result, some workers may develop depression. When the workers are put in control, the depression dissipates. In addition, morale is boosted and so is productivity in turn.

Moreover, blockchain technology could prove to be phenomenally beneficial when it comes to larger businesses. The nature of blockchain means that it is decentralized, removing the need for a central authority. Code is law, so if done right, the system cannot be cheated. Blockchain has various other benefits in the business sphere, including supply-chain management and in-company voting.

Decentralizing business through various means has many benefits. Destruction of the traditional hierarchy in business would prove beneficial for the workers and, in turn, the well being of the business. Hayek’s problem of knowledge has more to offer than a traditional critique of the workings of government.

71 Republic is the Third Voice in media. We pride ourselves on distinctively independent journalism and editorials. Every dollar you give helps us grow our mission of providing reliable coverage. Please consider donating to our Patreon, which you can find here. Thank you very much for your support!

How the United States Can Increase Market Freedom

By Max Bibeau | United States

The American Dream, as outlined by the Founding Fathers in the Declaration of Independence, has long been the shining beacon of hope for citizens and foreigners alike, offering a chance to be successful on an even playing field. Unfortunately, that beacon has been dimming in recent decades, leading the World Economic Forum to bluntly mourn that the American Dream is broken.

As class mobility continues to fall and the economic gap between rich and poor only seems to expand, many Americans are starting to give up hope in American capitalism. This has led to mass calls for change among the general populace, with everyone desperately looking for solutions. Some, such as Vermont Senator and 2016 presidential candidate Bernie Sanders, propose that it is time to look towards “democratic socialism” in the United States. Others, such as Speaker of the House Paul Ryan, seem to be denying the problem completely, still claiming that “the circumstances of your birth do not determine the outcome of your life.”

As much as we might wish for Paul Ryan’s statement to be true, the facts stand against him. Since we are in grave need of a solution, and one does not appear to be coming anytime soon, we must ask how America can improve competition in modern capitalism. Luckily, it is not too late for capitalism to be saved and for America to recover, but the country needs to act fast. While there are many potential solutions, there are three primary ones which will specifically target major problems in the US economy. In order to address current problems in the economy, the United States should target inefficiencies in regulatory organizations like the FDA, foster blockchain development around the country, and crack down on state preference policies.

FDA Inefficiency

The problem of skyrocketing drug prices was first brought to the forefront of American politics in 2015 when the infamous Martin Shkreli increased prices on a lifesaving drug by over 4000%, from $18 a pill to $750 a pill, making the cost of treatment virtually impossible to cover. Unfortunately, this is not an isolated case, as the Center for American Progress describes how American pharmaceutical prices have “continued to skyrocket” in recent years, with manufacturers of Medicare-covered drugs raising prices 12% per year on average. Another study shockingly found that over the past 14 months, 20 different prescription drugs had their prices increased by 200% or more.

Price increases, especially of these unprecedented proportions, are a clear indicator of a lack of competition within the pharmaceutical industry, as confirmed by a Government Accountability Office study. To counteract price increases, the United States must directly tackle the sources of the problem: inefficiency and over-regulation, which leads to monopolistic markets. All of the prescription drugs that saw drastic price increases have one thing in common: they have little to no competition making the same substances. This is because of how unreasonably difficult and expensive it is to get a new drug approved for manufacturing by the FDA.

The Journal of Health quantifies just how expensive the process can be, totaling it at over $1.395 billion in out-of-pocket costs. That number skyrockets up to $2.870 billion when post-approval research and development costs are factored in. These astronomically high development costs make it extremely difficult for anybody looking to create a new drug to even get their business off the ground. High startup costs are one of the top reasons that new companies and drugs never find success, as it’s virtually impossible for new companies, even with perfect scientific viability, to raise nearly $3 billion in investments just to allow their drug to be widely sold.

Because of complex regulations and red tape encircling the pharmaceutical industry, it’s no surprise that the market is nearly devoid of competition. By removing excessive regulation on the industry and streamlining the FDA, new drugs could be approved faster and cheaper. This would dramatically lower startup costs for new businesses trying to develop drugs and would promote increased competition throughout the entire industry, making life-saving substances much more affordable.

Blockchain Growth and Development

The blockchain, developed and made popular by cryptocurrencies like Bitcoin, is currently a buzzword in American Congress. Politicians are scrambling to implement the budding technology into their cities and states, and have even formed the Congressional Blockchain Caucus to craft policy surrounding it. Luckily, the potential benefits of the blockchain, especially when it comes to increasing competition, cannot be overstated. To quickly summarize a complex technology, the blockchain is a completely digital, decentralized ledger of information, constantly being confirmed and updated by computers around the world. This has plenty of business applications.

Specifically, since the National Bureau of Economic Research contends that the blockchain removes almost all need for trust in a transaction, small businesses will no longer have to compete with larger businesses when it comes to reputability. Trust, especially when it comes to internet retail, is one of the largest problems that businesses face, preventing up to 30% of internet users from utilizing online retail at all.

However, as the blockchain expands and becomes more widely used, retailers, especially small, newer businesses, will be granted the same level of trust as established companies. The Pew Research Center has found that many consumers soon “expect to see improved technology emerge that will allow people to have confidence in the organizations and individuals with whom they interact online,” specifically through the blockchain. Once the blockchain and cryptocurrency have become mainstream, the issue of trust will be eliminated from the equation, promoting widespread competition in online retail by allowing small retailers with no reputation to provide legitimate competition to retail giants.

While many are afraid to buy from anywhere other than Amazon due to the threat of scams, the blockchain will almost completely mitigate that problem, giving startups a chance, and opening up the online retail industry to everyone. To promote this, the government should focus on effectively regulating and investing in blockchain companies. These regulations would allow them to thrive and innovate in the near future, while still protecting the safety of consumers.

Ending State Preference Policies

While it is commonly agreed upon by economists that international protectionism damages all parties involved, what is criminally under-discussed when it comes to increasing domestic competition is state-by-state protectionism, more commonly known as preference policies. These policies are outlined by the Mercatus Center, which describes that preference policies, often enacted by state or local governments, give a significant advantage to companies residing in-state when bidding on government projects.

When a state government wishes to have a project completed, whether it be building military bases or providing a government building with computers, they allow companies to bid on the project. In theory, this practice would reduce costs as much as possible, as competition drives prices lower. Unfortunately, as the Mercatus Center furthers, even if an out-of-state company bids with a significantly cheaper offer, the more expensive in-state company will still almost always get the job. Aside from drastically raising the costs of government projects on taxpayers, in-state preference policies are almost identical to international protectionist policies, and have almost identical impacts, especially when it comes to decreasing competition.

Essentially, these programs enable companies to raise their prices due to the lack of competition from other states. Similar to international protectionism, these policies are put in place with the goal of stimulating domestic growth. However, this growth often comes at the cost of cheap prices and quality services. While it may appear that this would only discourage competition when it comes to government services, that is not quite true. Because most of these state and local policies are very strict, they only give preference to companies that have a state/local business license, pay all state/local taxes, and hire only state/local employees.

Since these policies are so rigid, and only apply to exclusively state or local businesses, it often discourages companies, especially those which rely on government business to remain profitable, from expanding outside of state borders, given that they know this will likely cost them their government business. This has much more broad impacts, affecting competition around the entire nation.

An Increase in Market Freedom

The United States, viewed as a pioneer of capitalism around the world, has found itself entrapped by red tape and ineffective policies, all of which are hindering one of the key benefits of capitalism: competition. However, while the United States does have some dire problems, they can be addressed.

First, the country needs to crack down on inefficient and ineffective regulations, specifically in the pharmaceutical industry. Second, the US should encourage and foster blockchain development by establishing fair regulations that don’t stifle the technology. Finally, the unfair problem of in-state preference policies must be addressed. While hope may be in short supply for capitalists in the United States, some common sense changes to economic policy would allow the beacon of the American Dream to shine brightly once again. 

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