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The glimmer of the US federal government reopening vanished, unsurprisingly, following the gain-less Senate on Day-34 of the shutdown.
We’ve seen strong impact, politically and economically, across multiple state apparatuses, causing serious consequences, which I think might be eased if in the world with blockchain mass adoption.
But again, I don’t have crystal ball, I have faith.
According to an S&P prediction in mid-January, the closure might have caused approximately $6 billion in damage to the economy as of the end of the fifth week of the shutdown.
True, it’s just a drop in the bucket compared to the world’s largest economy’s $20 trillion GDP in 2018. But we all have heard of theories such “butterfly effect”, or at least have a rough idea about “collateral damage”.
Take common stock as an example, you invest in a listed firm with better-than-expected financial performance, or business expansion plans, or partnership with a leading company.
It’s all about investors’ judgement call on the target’s prospect, or simpler, investor confidence — one of the major collateral damages caused by the US government shutdown.
This might apply just perfectly to current circumstance. The disputable Mexican border wall plan, trigger of the chaos, was considered to be an intermittent going-rogue of President Donald Trump in the very beginning, even hilarious from an outsider’s perspective.
However, what if it’s not? What if he decided to remain irrational henceforth?
The meaningless fight between The Donkey and The Elephant over the border wall would bring nothing but internal political friction, which obviously is economically discouraging.
Going longer, we might see serious consequences, prolonged and widespread.
Investors might be pessimistic about the country’s real economy, which would further hit the stock market. Together with the Federal Reserve tightening up previously injected liquidity, it is likely to see a market with risk-averse sentiment.
Elsewhere, the non-US markets, especially emerging countries with impressive performance but high correlation to the US, might suffer from mass retreat of the American speculators given weaker risk appetite and less easy money.
Such consequences could either hardly do any good to economies like China and Europe — seems more self-dependent than smaller countries but still have their own problems — trade dispute, booming credit bubble, slowing-down GDP growth for the former, while for the latter, the deadlocked Brexit and France’s Yellow Vest riot, and the poor-performing economy in general.
What a beginning for year 2019.
We are looking at a tough year ahead, for the global real economy as well as our crypto world. Agreed. But where there is threat, there also is opportunity, we just need to look closer and dig deeper, sometimes use our imagination.
So, I couldn’t stop wondering, what if blockchain technology had been widely adopted before the US government shutdown started, how would things go? Or let me put it this way, what if all the trust-related authorization processes could be executed on blockchain automatically?
In terms of business behaviors, we will be able to see licenses, permits, certificates and other types of regulatory approvals being granted to enterprises smoothly and efficiently, which helps them to swiftly move to the next step, such as manufacturing, running marketing campaign and financing, and generate cash flows as soon as possible, ultimately contributing to the overall economy.
For non-profitable sectors, the technology’s helpfulness is no less important.
The National Transportation Safety Board of the country, due to the shutdown, couldn’t help Mexico to investigate the helicopter crash that killed the governor of the Mexican state of Puebla and her husband.
The United States Geographical Survey, another apparatus affected by the closure, failed to share the data of the latest Sunda Strait tsunami with the Indonesian government.
Going further to post-disaster issues, if blockchain had been adopted as a fundamental technology, all the data needed — from medical aid to financial aid — would be gathered, computed and utilized effectively enough, to help the victims get their homes reconstructed, and themselves recovered physically and psychologically.
If we had entered into such era, the current US federal government shutdown — the longest one in its history — might just be a foreplay of a greater transformation to a government-less country, or an even more conceptual self-propelled global community.
Fine. It is a very big if, I admit.
I am too rational and pragmatic to expect seeing such revolution taking place in the near future. Nor would I be so starry-eyed to pin my hope on blockchain technology to cure one individual human-being’s insanity, or the nature of politics — different groups of people fighting for their own best interests.
Scientific means are not supposed to fix problems of social attributes. But it surely could help release the pain caused by such flaws.
Tough 2019 Ahead for Real Economy, What If Blockchain… was originally published in kucoinexchange on Medium, where people are continuing the conversation by highlighting and responding to this story.
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