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Suppose I create a country where all currency is a cryptocurrency with tracked transactions. All income and outcome for a given country is registered in a block chain. All the public workers (specially all those working for the government) will get paid with the cryptocurrency associated to that blockchain and their accounts will be public. Taxes will be paid in that cryptocurrency.

Is financial corruption possible in such a country? If corruption is still possible, then is it possible if every country in the world used the same trackable blockchain?

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    $\begingroup$ Oh my sweet summer child, did you think corruption could only be financial? $\endgroup$ – Starfish Prime Jan 18 at 21:13
  • $\begingroup$ Your intention is to make a cashless society? That's already sort of "a thing" - some businesses opt to go cashless and accept only payment by card. You just have to scale this to the entire country. But first you have to figure out how to deal with the very real problem cashless businesses result in - people can't pay by cash. Meaning that you're removing a chunk of the customers. Some people don't use cards for payment through choice or circumstances, so mandating this for everybody would be hard. Especially when you consider the homeless - how are they going to be doing payments? $\endgroup$ – VLAZ Jan 18 at 21:21
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    $\begingroup$ No, and don't solve a small problem by creating several big ones $\endgroup$ – Raditz_35 Jan 18 at 21:21
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    $\begingroup$ @elemtilas it could be, if it were about building a country using only blockchain. I don't think it is an entirely unreasonable fit for the site, even if I have sprained my eyes due to excessive rolling after merely reading the title. $\endgroup$ – Starfish Prime Jan 18 at 21:28
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    $\begingroup$ It appears that informatics (= computer science, for Americans) is not your main interest. When thinking about a potential application of blockchain technology it is useful to replace the word "blockchain" with "mulitple copies of a giant Excel spreadsheet" and see if it still seems reasonable. $\endgroup$ – AlexP Jan 18 at 21:28
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No, not even remotely.

A blockchain can certainly help with financial transparency. But it itself won't prevent fraud. For example, if the Dept of Agriculture gives a university $10 million to research something, the blockchain doesn't prove that money spent was actually worthwhile, or that it was the wisest thing to spend the money on. A surprising amount of graft falls into that category of things. Nor does it prevent 'soft' corruption, such as a company giving the son of a politician a high paying job to curry favor with the politician. That is practically a way of life for the politically connected.

And of course the unintended but massive downside of the whole idea is the completely loss of all financial privacy. Everyone will know what everyone else buys. The implications of that are very dangerous for individual freedom. Simply buying the wrong book or watching the wrong movie could lead to harassment. Most certainly that will lead to people switching to some other means of exchange (such as a privacy oriented cryptocurrency).

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    $\begingroup$ Blockchain technology does not help with financial transactions; in fact, it makes them slower, potentially very much slower. What blockchain technology does is to allow financial transactions (or actually any kind of shared records) between two (or more) completely unrelated parties without the need of a trusted third party. That's all it does. $\endgroup$ – AlexP Jan 18 at 21:30
  • $\begingroup$ Plain-old bitcoin transactions can certainly be slow. But there are other approaches by different cryptocurrencies that are no slower than existing credit card transactions. I think what the OP was considering here is if the open nature of the bitcoin ledger would help prevent corruption, which I don't think it will. At least, not by enough to justify the complete loss of financial privacy! $\endgroup$ – GrandmasterB Jan 18 at 21:34
  • $\begingroup$ All kind of research involve 'wasting' money. and I am not talking about what everyone else buys, just how the people gets the money. $\endgroup$ – Ivanovitch Jan 18 at 21:35
  • $\begingroup$ But yes, @AlexP you nailed right on the head what the purpose of it is - electronic transactions without an intermediary. $\endgroup$ – GrandmasterB Jan 18 at 21:35
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    $\begingroup$ @GrandmasterB: Oh no, any kind of distributed blockchain tech is inherently very much slower than simply making one transaction in one database. Bitcoin's particular case is ludicrously slow -- tens of thousands of times slower than bank card transactions at best. (Non-distributed blockchain tech is a solution in search for a problem; it is reasonably fast, but it does nothing which a regular database cannot do.) $\endgroup$ – AlexP Jan 18 at 21:38

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