Blockchain Gold and Diamond Tracking

Back in The Third Place (1st Ed.), I wrote in some length about the need to curb the “Informal Economy,” where economic activities that could have contributed Arbeit and Geld are left unregistered. Part of the foundational aims of the SSE and the Shopping Citadels and Arenas was to address that phenomenon by implementing contexts in which those activities should be registered at all times. The “Cottage Industry” in particular was cited an example that continues to be vulnerable to becoming part of the Informal Economy. And as I had pointed out in those relevant Entries, the Informal Economy should be distinguished from illicit activities that will never be counted as legitimate sources of Arbeit and Geld under any circumstances.

The “Shadow Economy,” the formal technical term for the black market, will always be distinct from the Informal Economy. The Shadow Economy refers to a narrow range of criminal activities and their transactions. Everything from the laundering of untaxed Kapital or Geld across overseas accounts and the trafficking of contraband to the illegal harvesting of natural resources and the production of narcotics. The Shadow Economy exists for those who find themselves compelled to violate the laws of any nation, regardless of its Mode of Production and political-economic ideology. Moreover, the Shadow Economy’s influence over other forms of economic life becomes apparent in times where goods and services are oftentimes scarce.

After the Second World War, the increased movement of Kapital and Schuld across international borders has made it easier for Shadow Economies to form in developing countries with the purpose of generating Kapital through transactional sales of contraband to the Western world. Criminal organizations and terrorist groups have taken advantage of that fact in order to finance their own activities and perpetuate their existences. Some war-torn nations find their natural resources plundered by the involved participants of asymmetrical military conflicts. Others are embroiled in the drug trade, arms trade and so forth.

One of the goals of the Accounting Profession since the 9/11 Attacks has been to curtail the sources of Kapital Accumulation among terrorist groups. Of course, these sources of Kapital Accumulation just so happened to be mostly denominated in US Dollars. In a world where the US Dollar has become heavily monitored, other Hard Currencies and the most valuable contraband in the Shadow Economy have taken the place of the US Dollar. Euros, Renminbi, Gold and Diamonds, and various Narcotics are now more reliable mediums of exchange. The Euro and Renminbi are Hard Currencies whose Values are comparable to other Hard Currencies like the US Dollar, Pound Sterling and Japanese Yen.

Gold and Diamonds continue to be prized for their Value, lack of transparency, and ability to evade legal scrutiny. If the true amount of Gold in existence is going to be unknown, then the number of Diamonds in existence is going to be fabricated to ensure that some will find their way in the Shadow Economy. Between Gold and Diamonds and Narcotics, the former has proven to be safer investments for criminals and terrorists compared to the latter. In Latin America, criminal organizations responsible for Cocaine production have spent the past decade moving toward illegally mining for Gold from the Andes to the Amazon.

Unlike Diamonds, which are often associated with fueling African asymmetrical conflicts, the Price of Gold in the Financial Markets have encouraged people to start mining for Gold in the hopes of earning enough Kapital to get by. The problem is that not every source of Gold can be accounted for, and some environmental damage was inflicted in order to mine more Gold than what was legally allowed. The fact that small-scale Gold mining operations tend to occur also does not help matters either.

One should wonder why I brought up the discussion of Gold and Diamonds. Gold and Diamonds both have legitimate non-financial applications for the Manufacturing Sector. The issue is that, under the Post-Bretton Woods Debt Standard, it is very easy for Gold and Diamonds to be mined as part of the Informal Economy and end up in the Shadow Economy for laundering Kapital made from criminal activities.

Fortunately, there have been proposals from the proponents of Cryptocurrency to address the issue. Blockchain Technology could be repurposed in such a manner that it could process and record the mining of Gold and Diamonds by the Natural Sector before they could be procured by the Manufacturing and Services Sectors. Rather mining Bitcoins or agreeing upon the amount of Ethereum there should be in existence, Blockchain Technology will allow anyone with access to uncover the sources of their Gold and Diamonds. Assuming financial records have not been forged and there are people outside the Blockchain monitoring the actual mining, the Blockchains will enable anyone to learn about the movements of Gold and Diamonds across Enterprises and Industries.

If the Blockchain can reliably track Gold and Diamond movements, can we expect something similar from the Blockcycle Technology proposed by the Work-Standard for the LERE Process? How different would Blockcycle Technology and the Work-Standard in particular treat Gold and Diamonds?


Categories: Politics

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