The Merkle

Could Blockchain Technology Prevent More Paradise Papers?

The second-largest data leak in history recently took place. Termed the Paradise Papers – almost assuredly a name nodding to tropical islands – this dump of data exposes the offshore holdings and dealings of many of the world’s elite rich.

If you’re ultra-wealthy, you probably just got outed

The Paradise Papers leak follows in the footsteps of the Panama Papers leak of last year. While the Paradise Papers may not have dumped nearly as much data as the Panama Papers did, they were just as potent. These in particular showed the spending and hiding habits of the world’s ultra-rich. No one was sacred, it seems – even Bono and the bloody Queen of England were in this one – and some of the revelations were outright damning.

Knowing where to start in dissecting this leak is best left to finance and tax experts – which I am not – but this leak definitely confirms the common belief that the ultra-wealthy can play by rules that the rest of us cannot.

For example, Apple was revealed to have stored massive amounts of money offshore in an apparent tax evasion scheme. This comes after the company’s claim that they “do not stash money on some Caribbean Island.” This obvious double standard for something as basic as telling the truth is worth a thousand words.

Another example is the deluge of Russian oligarchs named in these papers – and their business connections to prominent Trump administration officials. While not all are tied to Russian oligarchs or Kremlin-owned businesses, over a dozen Trump cabinet officials were named in this leak. That is far too many.

Both Facebook and Twitter may be in if not hot, then warm water as well. These businesses were also named in the leaks as having links to the Kremlin, further calling into question the influence that advertisements and fake news pumped through these social media channels had on the average voter.

How blockchain technology might lend a hand here

While most blockchains are pseudonymous, they are rarely anonymous. Hiding money from tax authorities on a blockchain would be difficult, even for organizations that had a stellar understanding of the nature of blockchain technology. I am not here to go into the “whys” of offshore holdings, but rather how blockchain technology can help close the ever-widening wealth disparity in the world.

When money can be kept secretly somewhere, shielded from auditors, it can hurt everyone else in the world. However, on a public blockchain, all coins can be accounted for. No one needs to estimate how much is being kept here or there; it’s all present for everyone to see.

Moreover, on most blockchains, there is no interest to be collected, only what exists. Therefore, everyone gets to be on the same page (or ledger).

In the end, you don’t have to trust that someone isn’t lying to you with blockchain technology, because you can just go see it for yourself.