Blockchain technology and international relations: Decentralized solutions to foster cooperation in an anarchic world
Bernhard Reinsberg · RePEc: Research Papers in Economics · 2018
Blockchain technology enables ‘trustless’ interactions among individuals by replacing centralized enforcement with distributed consensus. It therefore has been used for commercial applications, including transfer of cryptocurrency, digital file storage, digital identity services, and supply-chain management. This article probes the potential of blockchain technology to foster international cooperation among states—given the lack of a world government to enforce their mutual commitments. The article outlines four facilitators of blockchainbased global governance systems, including the need for credible commitment, the availability of resourceful non-state actors, verification needs that can be addressed through ‘oracles’, and routine interactions. These facilitators are further illustrated for the case of climate governance. Overall, the discussion suggests that blockchains—if appropriately designed to address the underlying cooperation problems—hold significant promise. Their key strength is to enable states to design ‘smart contracts’ that execute automatically when agreed conditions are fulfilled. To some extent, blockchain technology thus challenges the primacy of international organizations. However, even with blockchain technology, international organizations continue to play a role with regard to pre-agreement policy deliberation, validating real-world events, and providing technical assistance for policy implementation.