Rami Niemi

A collapsing petro-dictatorship creates a cryptocurrency to evade global sanctions. This is not the plot for a sci-fi flick. It's just one more sign of the coming Alternocracy, a world where the traditional functions of government are being replaced by computer code.

For generations a central tenet of government power has been the exclusive right to print money without restriction. On February 20, 2018, Venezuela launched a cryptocurrency with the selling point that its issuance was restricted and beyond its control. Instead, the “Petro” was limited by a decentralised blockchain to an issuance of no more than 100 million units.


The Petro is just one example of a trend that we will see accelerate dramatically in 2019. Eating away at the traditional monopolies of government over money, law and even land, the Alternocracy will be a tech-inspired alternative to the orthodoxy of democracy and nation states. The nation-state was built on an assumption of a single set of laws within national boundaries. People can disagree on what those laws should be, but once a vote has been cast, everyone must accept the will of the majority.

The Alternocracy, born of an age where mass media is replaced by everyone having personal newsfeeds, makes a different assumption. Instead of people voicing their preferences by voting, they will instead choose between multiple market-based alternatives.

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Printing money used to be the divine right of kings (or central banks). But over the last few years we have seen an explosion of alternative cryptocurrencies being issued by pretty much anyone. In 2019, this will step up a notch. Investors like Andreessen Horowitz, Bain Capital and Peter Thiel have poured over $300m dollars into stablecoins, projects that are seeking to print dollars and euros in blockchain to compete with central banks.

This is a startling and counter-intuitive idea, based on the realisation that most dollars today exist only as digital records, not as paper notes. Combine that with the fact that anyone can create blockchain-based cryptocurrencies, and a new opportunity presents itself. What if we could create a system that issues a cryptocurrency that always had the same value as a dollar – wouldn’t receiving that “dollar” be just as valuable as a dollar issued by the Federal Reserve?


Projects such as Maker and Basis, are attempts to do just this – create cryptocurrencies that can be accepted as if they were dollars and exchanged for Fed-dollars on a one-to-one basis. These projects, and many others like them, aren’t just digital records of dollars issued by the central bank. They are entirely new dollars that are issued only on the blockchain.

They will create “dollars” that the central banks never authorised. Each of these projects attempts to accomplish this in a slightly different way. For example, Maker backs each new dollar it prints (called DAI) with a cryptocurrency called Ether. Basis attempts to do this by creating an algorithm that will buy and destroy the dollars it issues if the price ever begins to drop below a dollar, to balance supply and demand.

To get rich in crypto you just need an idea, and a coin Long Reads To get rich in crypto you just need an idea, and a coin

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Because these systems are governed by decentralised algorithms, there is no central issuer that can come under pressure to stop competing with the central bank.


Meanwhile, as these systems provide an alternative to central banks, additional countries are joining Venezuela in launching crypto-currencies governed by code in place of central bankers. Both Iran and the Marshall Islands have announced such plans for 2019.

In 2019, we will also see the launch of several projects that seek to offer an alternative to key government functions, such as citizenship and courts. Bitnation, which bills itself as “Governance 2.0” offers a marketplace for digital citizenship. Multiple “service providers” can compete to offer their citizens everything from dispute resolution to guaranteed basic income.

One extremely bizarre, yet interesting example of this is FOMO3D. This is an autonomous pyramid scheme, that pays out a dividend. As opposed to a regular pyramid scheme, FOMO3D has been cleverly designed to never end, and to continue paying out a “basic income” to whomever has “contributed” to it. It's even more counter-intuitive than non-central bank money, but probably even more cleverly designed. It is already paying those who are participating a regular income.

Many more projects have not yet launched and we will have to wait until 2019 to see how they fair in reality. A different project providing an alternative to what is traditionally a government service is Kleros. Kleros argues that existing legal systems are slow, expensive and advantage those with deep pockets. Instead, Kleros is offering a network of arbitrators: parties that enter into an agreement place funds into a blockchain escrow – if there is ever a dispute, instead of going to court, it gets examined by this network of arbitrators. Their verdict is enforced by the blockchain, which releases funds to the aggrieved party.

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Perhaps the most dramatic thrust of the Alternocracy, but one that may take longer to materialise, will be semi-independent alternatives to the nation-state itself. Some examples are already emerging. Blue Frontiers is a company that has emerged from Peter Thiel’s Seasteading Institute that seeks to build “seasteads”, floating cities in international waters, independent of any existing government.

In Honduras, the government has passed constitutional changes to allow for the creation of ZEDE – Zone for Employment and Economic Development – semi-autonomous zones that will be governed by private corporations instead of the Honduran government.

Innovation almost always starts at the edges. The Alternocaracy, part revolution, part techno-utopia and part business, is taking hold at those edges. Historians may well look back at 2019 as the high-water mark of democracy, before an alternative, for better or worse, took over.

Edan Yago is CEO and founder of Standard.One

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