When your city goes on the blockchain

Presented by CTIA – The Wireless Association: How the next wave of technology is upending the global economy and its power structures

Apr 14, 2022 View in browser   By Ben Schreckinger Presented by CTIA – The Wireless Association With help from Derek Robertson A sign displays Bitcoin currency as a payment method in San Salvador, El Salvador. | Alex Peña/Getty Images SAN BARTOLOME PERULAPIA, EL SALVADOR—In September, when President Nayyib Bukele made Bitcoin legal tender in El Salvador, he instantly turned his country into the most-watched official experiment in the cryptocurrency world: How would a nation-state fare by embracing a system designed to work around nation-states? We'll be looking more closely at that soon. But on a reporting trip through El Salvador this week, something else became clear to me: The country itself is taking this moment as an opportunity to experiment in ways that extend well beyond Bitcoin. The back end of Bitcoin is blockchain technology — an idea with implications that extend far beyond digital currency. And on the outskirts of the capital, another blockchain experiment is quietly coming together in this town of roughly 10,000 inhabitants dotted with colorful murals. Over the next year, San Bartolomé Perulapía's 44-year-old mayor, Ronal Ortiz, will oversee the transfer of his city's land records to a blockchain-based system. The idea is to use NFTs — unique digital records kept on the blockchain — as digital verification stamps for official documents. In recent years, businesses and nonprofits have set up various projects in developing nations to put land ownership records on blockchain databases. Proponents say these systems offer transparency and clarity in parts of the world where land ownership has not been formally recorded or where records are vulnerable to manipulation by corrupt officials. President Bukele's embrace of Bitcoin has provided an extra boost to Ortiz's project. The mayor is an independent, but last month Bukele's administration sent representatives to the project's launch party, on the roof of Bambu City Center, a mall in San Salvador. Such initiatives carry risks, of course: These new record-keeping systems, the underlying blockchain networks that they depend on and the companies that promise to implement them are all relatively new and untested. New digital systems — blockchain-based or not — also come with learning curves, for officials and citizens alike. In San Bartolomé Perulapía, Mary Carmen Orellana, a 64-year-old artisan who makes clothing with local indigo — a blue dye that was central to the country's colonial-era economy — expressed skepticism. She said she was intrigued by the possibility of accessing the portal herself to record changes in the status of her land, but wary of having to master new technology. "I would need somebody to really explain to me, 'how is that going to work?'" she said. So why entrust his the city's property records to this new method, rather than a simple digital upgrade with a traditional IT provider? The town currently relies on a paper-based system and an Excel spreadsheet. Ortiz told me he was enticed by the security and reliability benefits of storing information in a distributed database, rather than on a local government's computers. (Speaking by video at last month's launch party , Haiti's former prime minister, Laurent Lamothe, recounted the chaos that ensued when a 2010 earthquake destroyed many of the country's property records, leading to widespread disputes over land ownership.) But more important than the theoretical technical advantages are the immediate fiscal ones: The company behind the new system, DelNorte TerraVision, has offered to do the work for free in order to establish a presence in El Salvador. The Honduras-and-Miami-based company even foots the bill for launch parties like the one at Bambu City Center. "The politicians really like that," said the company's CEO, Anton Glotser, "because they can sell it to their constituents." The flashy rooftop party offered a marked contrast to Ortiz's modest office, where a wall-mounted whiteboard listed ongoing municipal projects. Number one on the list was "potable water," a perennial issue in this impoverished country. With problems like this, why spend time trying out a cutting-edge record-keeping system? Ortiz said he needed to upgrade the property records anyway, to make sure he's collecting all the property taxes the town is owed. He also plans to use the platform to collect other data on local businesses that he believes can help attract investment to the town. "We're not going to be a first-world city when we need roads, and energy and water," Ortiz told me. "But we're definitely going to try to use tools from the first world to make our town become self-sustainable."   A message from CTIA – The Wireless Association: 5G Home Broadband is bringing competition to cable and fast, reliable, affordable home internet service to millions of Americans. With this new, easy-to-use, home broadband solution the entire household can stream, video conference, learn, game and more with great speeds and performance. More than 30 million America homes are covered today, with millions more expected in the years to come. Learn more about fast, affordable 5G Home Broadband. www.ctia.org/5gbroadband   A little bird told me Tesla and SpaceX CEO Elon Musk speaks at the SATELLITE Conference and Exhibition in Washington. | Susan Walsh, File/AP Photo A little tidbit circulating around the tech (and media) worlds today: Elon Musk has offered to purchase Twitter. After becoming the social media company's largest shareholder last week and toying around with the idea of joining its board, the rocket-tunnel-energy-auto mogul has decided he'd rather own the company outright, saying in a filing to the SEC that Twitter has "extraordinary potential" that he would "unlock" by securing it as "the platform for free speech around the globe." Arguably more than any human being on the face of the planet, Musk embodies the concept of "permissionless innovation." A cardinal virtue for libertarians and many technologists, permissionless innovation argues that entrepreneurs create the most benefit for society when they're allowed to operate unfettered by regulations that would otherwise force them to await the state's approval before acting. So if you're the richest man on Earth and you want something, you simply create it — or here, offer to buy it — and let the chips fall where they may. Consciously or not, the principle drives the technologies this newsletter covers most closely: Satoshi Nakamoto didn't ask the Federal Reserve or the SEC if he could create Bitcoin. He just did. A decade and a half later there's $2 trillion invested in crypto, and the state is just barely starting to catch up. I emailed Adam Thierer, a senior research fellow at George Mason University's Mercatus Center who literally wrote the book on "permissionless innovation" to ask for his thoughts on Musk's Twitter move. No points for guessing: Thierer called Musk the "most important catalyst of change in the tech marketplace and policy world alike." "Even if everything he is attempting fails," Thierer said, "the world is better off for him having tried to shake up these markets, as well as the policies that govern them." If you're one of the public watchdogs unsatisfied with the results of the move-fast-and-break-things era, this is obviously concerning. Not every innovator is as wealthy as Musk, or as brazen. But each corner of American industry and technology has its own cadre of "permissionless innovators," with their own brand of charisma, their own devoted followers, and their own stubborn and inherent ability to stay one step ahead of the regulatory landscape. — Derek Robertson Afternoon Snack Will it be wiki vs. crypto? Really? Wikipedia is an early, and arguably the most successful, example of a truly "decentralized" platform — open source, built on community contributions, and with its entire iterative history laid bare for anyone to see. Which makes it somewhat ironic that yesterday its editors voted overwhelmingly to ban cryptocurrency donations, citing the technology's environmental impact and the possibility that such a thing might be taken as an endorsement of crypto writ large. Having fun yet? | Wikipedia Wikipedia's reputation, both within its community and without, is staked on a commitment to neutrality. In that light, excluding certain forms of donations might seem unfairly exclusionary, or — gasp — editorial. (Never mind the fact that only .08 percent of the Wikimedia Foundation's annual revenue comes in the form of crypto.) But high-profile debates over how much "neutrality" the platform is willing to stomach have roiled it since its inception, most recently in the case of Ksenia Coffman, an editor recently featured in Wired for her crusade against Nazi minutia and apologia on the platform. As much as Wikipedia has been able to maintain good vibes and trust among the public where many other digital-first platforms have not, it's another reminder that try as our futurist-innovators might, there's no way to decentralize yourself out of good old fashioned human conflict. — Derek Robertson   A message from CTIA – The Wireless Association:   The Future In Five Links Crypto donations are throwing a wrench in the world of campaign finance. An IBM survey of executives shows they view ethics in AI as a possible competitive advantage. Could drone ships help the U.S. Navy keep up with China? There are plenty of skeptics. The Dallas Cowboys — who else — are the first NFL team to partner with a crypto platform. A philosopher takes on virtual reality with a new book, to mixed results. Stay in touch with the whole team: Ben Schreckinger (bschreckinger@politico.com); Derek Robertson (drobertson@politico.com); Konstantin Kakaes (kkakaes@politico.com);  and Heidi Vogt (hvogt@politico.com). If you've had this newsletter forwarded to you, you can sign up here. And read our mission statement here.   A message from CTIA – The Wireless Association: 5G is shaking up home broadband – bringing new competition and choice to millions of homes and businesses across the country, and expanding access to high speed, affordable broadband. Households outfitted with 5G Home Broadband can do everything they do with cable, with great speed and performance including streaming, video conferencing, homework, gaming and more. This new, wireless alternative boasts competitive pricing and tremendous ease-of-use – just plug it in and turn in on. More than 30 million homes are covered today, with millions more expected by 2025. Learn more about fast, affordable 5G Home Broadband. www.ctia.org/5gbroadband     Looking for in-depth and actionable technology policy news? The Morning Tech newsletter is exclusively available to POLITICO Pro subscribers, please visit our website tolearn more about the benefits of a subscription.       Follow us on Twitter Ben Schreckinger @SchreckReports Derek Robertson @afternoondelete Konstantin Kakaes @kkakaes Heidi Vogt @HeidiVogt   Follow us

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