The Hive Virtual Nation State

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7 months ago - 5 minutes read

During a two-hour long video interview, Raoul Pal discusses the development of parallel economies in crypto. He contends that value is being extracted from the traditional financial systems and being deposited into virtual financial system, such as crypto. The legacy system is losing the velocity of its money while crypto is gaining velocity.

This idea resonated with me. Although, I will temper it with acknowledging that the crypto economy is still only a small fraction of what the actual global financial markets handle. However, it has to start somewhere.

From there, Pal touches on virtual nation states, particularly with regard to Meta, which is working towards a virtual reality environment. If Meta had been successful at launching the Libra cryptocurrency, it would have created an instant global virtual economy. This naturally made regulators uneasy as they have enjoyed a monopoly on the creation of money.

The grand implication of a Virtual Nation State is that many people would be free to earn an income from anywhere in the world. Your birth citizenship need not be a lifelong commitment. You could take your job with you anywhere you wish to settle. All you need is a laptop and a phone with Internet service.

HIVE Nation Still Needs Work

Before we go out and start making flags for our Hive Nation, it's important that we diversify our economy. For the most part, we are greatly dependent on blogging as our export. Splinterlands brings some diversity to the economy. But, the reason why @Splinterlands is successful is that it provides an onramp for outside capital to enter the HIVE economy. Hive cannot continously pay out while all of us sell our earnings. Hive requires that a large portion of us hodl our earnings. And, in order to grow, Hive requires its citizens to import dollars.

@LeoFinance is also a net positive for the Hive Nation economy as it generates some advertising income.

We need a net positive income of capital into Hive to make our economy grow. We can't just all blog continuously and sell our earnings. It would drive down the value of HIVE.

In the long term, we need businesses that are willing to accept payment in HBD, which creates a market for HBD for outsiders willing to do business with Hive Nationals. We need to diversify our exports.

In the world of Economic Development, Hive needs primary jobs. These are something like manufacturing where we import goods and hire local talent to manufacture a product. What this does is provide a source of capital that enters a local economy, which exports the goods manufactured. As a nation, Hive needs a way to generate income from noncitizens so that we, as citizens, may share in that prosperity.

The way this works is that if you earn $1000 from somebody in Chicago, you now have $1000 to spend in Podunkey for groceries or to have your lawn cut. Your wealth eventually makes its way to your community.

Remote jobs are a form of primary job. The person earns income from outside sources and spends it locally. This can be something like writers, developers, investors, customer service, graphic artists, or other work that is location independent. We need to be paid in HBD and use Hive as our bank until we need to spend our income. We all need to accumulate our wealth into HBD in the way we would save for retirement.

Again, Hive is still young. But, as a nation, we have been able to do what Meta failed to do. Hive has been too small to attract the attention of regulators. We are flying under their radar. Eventually, we will be too large to ignore. But, by then, it will have been too late.

Thanks to @LeoFinance, @blocktrades, and @hive-engine we have multiple ways of importing and exporting capital to the Hive economy. We will need them and more to avoid being frozen out of the legacy economy once regulators catch wind of our virtual nation state.

Natural Resources

It would be ideal if the Hive Nation had natural resources, such as land. Imagine you raise cattle. Then, you keep your earnings in HBD savings. Your expenses are property taxes, some utilities, maybe a few employees to tend to the cattle, and some feed and medicine from time to time. For the most part, your livestock lives off the land. The land is your capital that generates income in the form of beef. For now, we are the natural resource.

Nice Segue to Business Banking

That example is a nice segue to the concept of banking on Hive. Many of us can have side businesses. But, rather than keep a majority of our cash in a bank, we could keep it in HBD savings. For day to day spending, you can use a business credit card. Knowing the due date, you can withdraw the HBD you need to pay the credit card. As for fiat, perhaps you can keep a minimum balance at the bank. Any excess can be swept into HBD savings. I dare you to find any other business bank account that pays 20% interest. Unfortunately, this does require some reliance on exchanges to receive your HBD in your preferred stablecoin. At least until the rest of the world starts directly accepting stablecoins for payment.

Of course, nothing stops us from using Hive for personal banking too. Any savings you have could be stored in HBD Savings.

Where This Leads

The reason we are discussing using Hive as a business checking is that we need business people on Hive. We need to be able to find a plumber, an electrician, a graphic artist, or some other professional willing to be paid in HBD. But, until we have more professionals on Hive to be able to find local contractors, we could at least have a first wave of professionals banking on Hive until Hive can one day become the payment rail.

Blogging is a great business that can be done from anywhere. But, as a nation, we at Hive need to diversify our incomes. We need to do jobs that bring wealth into Hive. Hive needs to be our bank. Hive can't survive long-term if our focus is merely on extracting value from it.

If you were to start your own country, you would need talent of all kinds. We already have the currency and banking system in place. We just need commerce and exports. For now, we can export talent and import dollars. Perhaps someday we can export physical products to import dollars. And, to retain our collective wealth, we need to be able to do business with each other to keep wealth within Hive.

Who knows? Perhaps one day we can have the DAO buy an island for HIVE citizens where the currency is HBD. Rather than a government, we can use the DAO to fund construction of roads and schools. But, this is a remote possibility. For now, we are a nation. We are a people with citizens around the world. We are an economy. The Hive Nation is the start of a new global citizenship.

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