The only sort of financial system which works at scale is one which has been decided by courts and enforced by a threat of violence. Widespread belief in the threat reduces the need for active enforcement.
"The IRS relies on a system of voluntary compliance which means that individuals are responsible for reporting and calculating their own tax obligations."Less than 1% of tax returns are actually audited due to the lack of man hours for the IRS to check everyone's work. Americans can be over submissive that Indian phone scammers have made a killing off impersonating government officials. Overall, making hundreds of millions of dollars every year. The New York Times profiled an IRS scammer from Mumbai last year who said:
“I think they actually are really afraid of their government. In India, people are not afraid of the police. If anyone wants to come and arrest, they say, ‘come and arrest.’ It is easy to get out of anything. But in America they are afraid. We just need to tell them, ‘you are messing with the federal government,’ and that is all.”As long as the threat is credible, a system of deterrence works. Public blockchains, which are developed to support a global financial system without the need for violence or threats are now available. Rules aren’t imposed under threats however, they are instead enforced by computers throughout the world. With the network, there is no way to add exceptions or conditions without any approval of every computer in the said network. Last week, there was a critical software bug in the Bitcoin network which was discovered and reported but under ‘cloak and dagger’ circumstances. Maintainers of the Bitcoin software quickly fixed the issue and notified the largest businesses and miners before releasing the information to the masses. Over half of the miners had applied the fix within a 72 hour period. Despite it being a good thing that the patch was inplemented before any form of exploitation, it defies the idea that Bitcoin is made up of independently determined users. What are your thoughts? Let us know what you think down in the comments below!