Conditions for the development of blockchain technology in Brazil
The costs, opportunities and risk.
Scientific and reflective development demand curiosity. Before understanding something, you need to knowledge that you don’t understands it. When it comes to blockchain issues, such dynamics are no different, those who are more willing to learn go further and faster.
In the context of a State, the disposition to learn is manifested in the devices of the institutional arrangement that allow civil society, the market and the academy to experiment in the search for short, medium and long term solutions.
However, the presence of such disposition in the institutional arrangement is the result, and not the premise, of a process that begins with the curiosity among representatives and leaders of the State, the market and the academy.
In the text 'Political Philosophy, Productive Freedom and Blockchain Technology'
, published in Column ANPOF, I've described a kind of freedom, associated with production, that fosters innovation.
Such freedom, which takes different forms and patterns, is the nuclear condition to move from the productive practice available to a more sophisticated one at a given moment in history.
As Roberto Mangabeira Unger (Harvard) warns us in his book 'The Knowledge Economy' (2018), the most advanced productive practice in each era does not become immediately widely available, but is often a tool available exclusively of an elite.
That is, it's usual for such freedom to be available only to small groups of individuals endowed with resources for their development.
The cost and opportunity of breaking with the status quo
The speed and depth at which a country manages to break the confinement of the most advanced productive practices determine the position that this country occupies in the race for the development of a given technology.
For example, by decentralizing the supply of credit, the US has put itself at the forefront of productive empowerment of the world's middle class.
Meanwhile, by extending the concept of open software to hardware, China was able to leverage innovation and increase the competitiveness of its companies around the globe.
Each country that takes the risk of breaking this confinement and making the most advanced production practices available to its population, assumes the role of global vanguard in a certain aspect.
Although the main aspect of this confinement materializes in economic inequality, there are aspects that arise and can be overcome at the local level.
Issues related to legislation, education and culture (not only the popular one, but also the corporate and intellectual) can be answered within the specific institutional arrangement of each country or region.
In Brazil, the lack of institutional curiosity of the State and the market, makes this confinement to be broken only by young people endowed with resources and brave enough to risk their time, money and reputation in experiments in blockchain technology.
Perhaps the title of the most disruptive experiment currently can be given to the initiative of Banco da Maré to develop a Stock Exchange, within a blockchain network, focused on social impact initiatives.
The Homework
Back to the case of the Brazilian State, the first condition for the rupture of the confinement of blockchain technology concerns the manifestation of institutional curiosity.
While the market has absorbed part of the development of such technology, in the State the use is limited to internal debates by the police and fiscal bodies.
While among the elected representatives there are too much of axioms and a lack of curiosity.
The first step to break this status quo is to form working groups in both legislative houses, in each of the State Secretaries, in the Central Bank and in the Presidency of the Republic to build a document that signals to society the institutional interest.
Such a signal would be a call to theoretical elaboration (mainly by the academy) to articulate the potential of such technology to the challenges and opportunities within the Brazilian reality.
Then, the State must measure the availability of basic tools for the development of applications within the blockchain technology.
Once it’s done, the State and market organizations will be able to articulate a response to the demand for such tools in a way that prevents the inequality characteristic of our country to make this experiment unfeasible.
Fortunately, such tools boil down to technical training and devices with processing capacity already available in the simplest smartphones used by most Brazilians.
The third step is to provide stability and legal certainty so that citizens, developers, entrepreneurs and investors can dedicate themselves to experiment in this area.
The Inertia's cost
We should note that the lack of institutional curiosity has shifted institutional stress from the legislative houses to law and order protection agencies.
This occurs because the legislative vacuum, at the same time that it generates fear for the honest citizen, it also generates opportunity for criminals.
The urgency of the Brazilian case is based upon the fact that, despite having one of the largest populations of internet users in the world, the country plays a timid role in the global race for the development of blockchain technology.
More precisely, in terms of institutional use, we are behind countries like Ethiopia, which already have plans to optimized its educational system (reducing costs, streamlining processes and reducing fraud) with the help of Cardano Network.
Not diminishing the great country of Ethiopia, but the exposition of the population to the internet is far less than in Brazil.
The fact that we have such an active population on the internet makes the country immediately exposed to innovations on it,
When we talk about a range of innovations that radically transforms our relationship with money and value itself, such exposure (without the due institutional structures) becomes a risk to country as whole.
The Brazilian Real today is one of the most fragile currencies in the world, and investors are fleeing from Brazil as our economy get more and more unstable.
If the Brazilian institutional arrangement remains adrift regard to
blockchain technology, it is possible that this will be the least of the problems that we will face in the coming years.
We need the blockchain technology not because its cool, but mostly because it reduces the space for some of our structural problems like corruption and inefficiency.
The original version of this text was published at Prensa.li platform and you can check it out here.