Is Distributed Tech Important In A World With More Nationalism?

Five quick insights on the decentralized web
Image Source: PRESANS – Centralized Money, Decentralized Nation States, Distributed Tech

In 2020, globalism is receding, giving way to aggressive nationalist movements. This trend harms globalists that benefit from a well integrated global economy.

As global policy shifts towards isolationism and protectionism, globalists will turn to distributed technology as a haven for global commerce. A distributed system is created when independent operators form a network and coordinate actions, resources, and processes to achieve a common goal.

Technologies such as blockchain are an example of a distributed system. Blockchains can coordinate global computing resources to cryptographically verify transactions without using third party intermediaries. With the bitcoin blockchain, you don’t need to use a bank to transfer money across the world. These distributed systems are valuable because they provide individuals with an ability to create, store, and maintain digital assets.

But why exactly are distributed systems beneficial for anyone interested in global commerce?

Nationalism Harms The Digital Economy

I think of the internet as a global marketplace of information. Users constantly create, search for, and evaluate all kinds of data. The internet will soon connect the world’s 8 billion people, 195 governments, 6,500 languages, and many cultures together into one melting pot. Since the 90’s, the binding agents of this global and digital economy have been the use of a global reserve currency system, a robust software ecosystem, and a willingness to trade between nations.

But how did it all come to be this way and how does nationalism harm this ecosystem? To understand the development and functionality of the global economy and why nationalism harms global integration, we need to know a little history.

Bretton Woods Agreement – Led to A Global Reserve Currency

At the end of WWII the Bretton Woods Agreement was a global initiative that created a global foreign exchange system for money. The agreement also created the IMF as a global institution to oversee this global monetary system’s stability. And at the same time, the US dollar became a global reserve currency with its value tied to gold. This system worked until the 1970’s when the dollar became unpegged from gold.

The key takeaway here is that using the US Dollar as a global reserve currency became a critical element of global economic integration. But why do all this?

Ultimately, the goal was to stabilize the value of goods and services in global trade. By adopting a primary global reserve currency and creating global institutions to support global monetary stability, the aim was to create an easy path to exchange goods in the global economy.

Digital Businesses Were Built On Global Integration

Since the Bretton Woods Agreement, the internet built a thriving global digital economy around this concept of a global centralized currency. Today, many digital businesses rely on global commerce and the dollar plays a critical role in this commerce. Businesses live and die by their network values and they feed off of network growth. This means that the more people that can access the internet, the more valuable it becomes (Metcalf’s Law).

In a global economy, this growth depends on the interoperability provided by global economic cooperation. A common global reserve currency provides this cooperation and the US dollar has become the de-facto global financial interoperability mechanism.

But rising nationalism challenges this global connectedness and future growth of the digital economy. As a global reserve currency, US fiscal and monetary policy impacts the entirety of global business. Because of it’s global reserve status, American policy decisions that impact the dollar also impact the world economy.

Nationalism Restricts Global Business

With a common reserve currency, what happens to one nation typically has an impact on others. This interconnectedness has been more beneficial for some nations than others. In fact, over the past decade there have been several critical events that have given rise to nationalism at the expense of global integration.

Some of these global events created economic shocks and caused nationalism to thrive on a global scale.

  • 2008 Global Financial Crisis
  • 2010 Euro Crisis
  • Brexit
  • Trumps Election
  • COVID-19 Pandemic

These events lead to rising nationalism because of the Global Trilemma: ““democracy, national sovereignty, and global economic integration are mutually incompatible: we can combine any two of the three, but never have all three simultaneously and in full.”

The adoption of the USD as a global currency is a move towards globalization but its also towards less control over national sovereignty. Some nations are better at this relinquished control than others. As an example, China and Russia make further global integration at the state level challenging. They continuously work around global integration, adopting protectionist policies and support of domestic economy over global economic integration.

In reality, the world uses a centralized reserve currency while attempting to maintain decentralized sovereign governments. And because American policy decisions impact the rest of the world, this system becomes incompatible during times of conflict. ie: our globalized economic system is only partially integrated. It’s a system of half measures.

The problem with a partially integrated global economy is that it lacks control during economic downturns. Without a strong sovereign and centralized global government to adjust global policy and manage these shocks, economic downturns easily ripple through the global economy.

In the absence of a sovereign and centralized global government, many parts of the global system have suffered over the past decade. Consequentially, these nations want to regain national sovereignty to implement protectionist monetary policies.

This harms global interconnected commerce.

Distributed Technology Is A Haven for Globalists

With nationalism on the rise and the global digital economy stuck in limbo, what are globalists to do? Interestingly enough, this may provide an opportunity for blockchain technology to finally prove it’s usefulness. In a world with nationalist governments competing in zero-sum games, global businesses can rely on smart contract and blockchain based digital solutions to conduct global business.

Some examples:

  • Bitcoin – a store of value and potentially useful as a global means of exchange, ie: another global reserve currency that doesn’t require support from global institutions
  • Ethereum based Decentralize Applications – crowdsourced computing power used to create an internet capable of self managing and enforcing digital contracts and processes, some current examples include:
    • Prediction Markets – Gnosis
    • Decentralized market places – OpenBazaar
    • Financial exchanges – Prism and IDEX
    • Crowdsourced computing – Golem
  • Non-Fungible Tokens – smart contract enabled digital assets that are rare, publicly verifiable, and exchangeable, potentially useful for:
    • Identity management
    • Verifying ownership rights of assets -web domains, contracts, and property
    • Voting
  • Anonymous Transactions with privacy oriented currencies like ZCash and Monero

Blockchain is not and probably never will be a silver bullet. Like the internet, this technology relies on wide adoption to achieve success (Metcalf’s Law) and its a long way from being viable in most use cases. With that said, Bitcoin is an example of a viable option for exchanging value on a global scale. That alone represents a unique and valuable haven for globalists.


There is no doubt, nationalism is on the rise and nothing will change that in the short term. Globalists must prepare for that reality and decentralized and distributed systems present an interesting haven for digital commerce outside the confines of nationalist regulations.

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Let me be clear – this is not an activity that I believe will achieve mainstream adoption. Most people will follow the directives of their domestic governments and blockchain is going to remain a fringe concept for the foreseeable future. But there is enough of an established community to believe distributed systems are a haven for globalists.

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