If you ask me, cryptocurrencies are so far the greatest innovations of the 21 st century for two reasons. First, they are a decentralized currency whose value is not determined by any material substance other than the group inherently agreeing that the unit of currency (such as bitcoin) is valuable because they believe it to be so. Secondly, they operate within a completely decentralized framework that has come to be known as blockchain technology. In fact, decentralization is so important to the bitcoin that any individual or group that acquires control of the entire network is viewed as having attacked it. Furthermore, if any individual or group starts to control the currency, its value will significantly drop. Therefore, cryptocurrencies have demonstrated the value and effectiveness of decentralization to solving contemporary problems like climate change, overfishing, deforestation, and even the extinction of species due to disruptions in the ecosystems.
Natural resources are scarce and have continuously been exploited since the dawn of the industrial era. The unsustainable consumption of resources has wreaked havoc on the natural environment to the point that climate change is a more serious existential threat than an asteroid strike. Its not like we do not know what we humans are largely responsible for the impacts on the environment. Furthermore, armed with the knowledge, we are still set in our ways either for the fear of the unknown or for financial gain. Regardless, we (represented by our governments) are in a competition where everyone is increasing their resource consumption for short term gain but remaining intentionally blind to the long-term consequences. This, is the tragedy of the commons that predicts our demise as a species. If we continue to act out of our self-interest, we will deplete our shared resources and will have caused irreparable damage to the environment by then.
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The solution to the tragedy of the commons is also known. We need to start planting more trees and following through till they mature. All the while, we need to stop destroying our forests. We need to stop overfishing practices. We need to stop using fossil fuels as the main sources of energy. We need to stop polluting our environment as it disrupts ecosystems and leads to increasing the extinction rate. Most importantly, we need to recognize we are in the Anthropocene, where our activities have significantly changed the chemical composition of the atmosphere, soil, and the ocean and even damaged the biosphere irreparably in some ways. The end of the Anthropocene is our own extinction. The problem, therefore, is not knowing what to do to ensure our future survival. Instead, the problem is cooperating with each other to sustainably consume available resources.
When writing about the tragedy of the commons, Hardin proposed that the only solution was centralization. According to Brinkley (2020), aggressive intervention by the government through privatization and heavy regulation is the only solution to the tragedy of the commons. However, national governments are still bound to disagree. For instance, it would be virtually impossible for the US government to tell Russia or China how they should switch to sustainable consumption of resources and have them follow through. Furthermore, having a one world government that subordinates territorial authorities brings more troubles to the table. Cryptocurrencies using blockchain technology are, therefore, an alternative solution and the best champion for a decentralized system of governance. With fiat currencies, one does not trust the currency per se but the government backing it. if I have a $100 bill, I am certain that everyone else will agree about its value and I can buy anything worth up to $100. Cryptocurrencies are also a trust protocol and its users can work together because they trust the mathematics that controls the entire network. Anyone curious enough and has the technical expertise can dismantle the bitcoin network and understand it at the lowest level: the bit.
However, how do cryptocurrencies and the blockchain network help solve the tragedy of the commons? If blockchain technology is the digital solution, then its analog would be the eight robust design principles for sustainable and equitable governance of commons proposed by Elinor Ostrom ( Obeng‐Odoom, 2016) . These principles are summarized in the figure below. However, the design principles not only instruct on how to built sustainable systems and communities but also how groups fail in self-governance.
Figure 1 . Ostrom's eight design principles. Source: Dao (2018)
After studying Ostrom’s eight design principles, I realized that even in decentralized systems, individuals must adhere to strict rules and regulations. The implication is that there must be an authority to oversee the activities, prevent, and punish offenders. Digitally, the bitcoin network performs that service. In the analog world, that role falls upon our current government. A sustainable solution to decentralized self-governance as a solution to the tragedy of the commons is, therefore, libertarians. Everyone recognizes the need for collective action but requires an external authority to enforce liberties (sustainable consumption of natural resources). However, everyone is fearful of the authority as it could potentially abuse its authority (like current governments do).
References
Brinkley, C. (2020). Hardin’s imagined tragedy is pig shit: A call for planning to recenter the commons. Planning Theory , 19 (1), 127-144.
Dao, D. (2018). Decentralized Sustainability. Retrieved 21 December 2020, from https://medium.com/gainforest/decentralized-sustainability-9a53223d3001
Obeng‐Odoom, F. (2016). The meaning, prospects, and future of the commons: Revisiting the legacies of Elinor Ostrom and Henry George. American Journal of Economics and Sociology , 75 (2), 372-414.
