Digital Ballot, Digital Money

CreaSakti has voluntarily taken the global initiative and the lead in building the case for sovereign digital money. We began working on this global project in November 2016. Our draft report – Sovereign Digital Money – has been in circulation since February 26, 2021.  

Digital systems architects, economists, financial and fiscal analysts, investment bankers and monetary analysts have worked on this project. BERM (Business Economics and Resource Management), CreaSakti and IndiaGrow have contributed to this report. “Sovereign Digital Money” (SDM) was not commissioned by any central bank, the Bank for International Settlements (BIS) or the International Monetary Fund (IMF).       

Digital tulip

The principal recommendation of SDM was published on February 26, 2021. May I urge you to read the article on LinkedIn?

https://www.dhirubhai.net/pulse/sovereign-digital-money-principal-recommendation-gopalan-ramachandran/

I had described cryptocurrencies as digital tulips of the modern era. These modern digital tulips are not perishable. That is the best that can be said about them. In the main, cryptocurrencies do not possess the five attributes of legal tender. They do not deserve to be considered legal tender. I wrote that on February 26, 2021.

A whole lot has happened in the three months since I described cryptocurrencies as digital tulips. One bitcoin (BTC) – a leading cryptocurrency – was said to have been valued at USD 46,320 on February 26, 2021. One BTC is worth USD 36,040 on May 24, 2021.

Bitcoin has no face value. There are no central banks to provide the backstop. There are no sovereign exchequers to accept bitcoin as legal tender when you and I pay tax.

Engaging with reality

Our sovereign monies are wholly dissimilar to bitcoin and other cryptocurrencies. Our sovereign monies have an origin. This origin is the state or sovereign and its institutions. Regardless of whether our monies are physical or digital, it is their origin that makes them acceptable.

Paper money and digital money depend on the status and the stature of their issuer. We have a contract with the issuer. The issuer has a contract with us. The contract is at the core of sovereign money. It is wholly irrelevant whether sovereign money can be digitised or not.

Cryptocurrencies have been riding on digitisation and only on digitisation. And nothing more! They lack the essence of reality. In order to understand this, let us consider votes in an electoral democracy. We will discuss paper ballots and electronic ballots.

In later articles, we will consider discount vouchers issued by manufacturers, retailers and service providers such as automotive garages and workshops. We will also consider frequent flyer points given by airlines.

Ballots and elections

Elections are an important component of democracies and democratic institutions. The balloting process and ballots are central to elections. Two years ago, India held a noisy and successful election to parliament. The incumbent Bharatiya Janata Party (BJP) successfully defended the mandate it had earlier received in 2014. May 2019 was an epochal year both for India and its voters.

India was the first among the big democracies to choose electronic voting machines (EVMs) for the conduct of the balloting process. In the years past, general elections involved paper ballots. Then EVMs and electronic ballots displaced paper ballots. Elections to parliament and the state legislatures involve the use of EVMs on a colossal scale. India has used only EVMs since 2003.

The paper ballot died in totality 18 years ago. This replacement of paper ballots with electronic ballots possesses immense instructional value for the issuance of digital money by sovereigns.

Paper ballots and voting

First, paper ballots are issued by the Election Commission of India (ECI). Each ballot is customised to present the names and electoral symbols of the contestants seeking to be elected from a constituency. Paper ballots are specific to a constituency. They are not transferable from one constituency to another.

Second, representatives of the ECI work on behalf of the ECI at each polling booth. A polling booth may serve voters living in multiple residential streets, colonies and neighbourhoods. Multiple polling booths may serve one constituency. However, one polling booth serves only one constituency.

Third, registered voters enter a voting booth on the designated day of voting. They then present their identification document(s). They do not carry their own ballot paper to perform the voting. This is very important. A vote is valid only when it is cast on an ECI-issued ballot paper.

Fourth, the registered voter has the index finger on the left hand inked so as to enforce the “one voter, one vote and only one vote” tradition.

Fifth, in an enclosed space, the registered voter “votes” or “casts her or his ballot” by marking against the symbol of the contestant with an inked seal. The inked seal is issued by the ECI. 

Sixth, the ballot is dropped in a box.

Seventh, multiple markings with the inked seal will invalidate the ballot.

Eighth, a ballot paper that is dropped into the box without any stamping from the inked seal is a blank. This does not get counted.

Ninth, valid votes cast on valid ballot papers are counted. The contestant with the most number of valid votes is the winner. This elected member will represent the constituency.

Questions pertinent to paper ballots

First, does a valid vote exist on its own? Does a vote have any materiality? Is a vote as material as gold, copper, a pen or a pencil?

Second, is an unused ballot paper a vote?

Third, is a mere piece of paper dropped by a voter with the name of her or his chosen contestant a valid vote?

Fourth, is a ballot paper marked with a device other than what is given by the ECI a valid vote?

Fifth, is the number of blank ballot papers the same across all constituencies?

Sixth, is the number of blank ballot papers sent to any polling booth set to a maximum?

Seventh, does each voter bear the cost of the ballot paper, the ink and the payments to the ECI representatives?

The principal answers

A vote has no materiality. A vote has no prior existence. A vote is intangible. A vote emerges as a choice exercised by a registered voter. A vote is born inside the polling booth.

A valid vote is not a drawdown from a stock of preset numbers. There are as many valid votes as there are valid markings on an ECI-issued ballot paper.

The number of ballot papers for each constituency is determined by the size of the constituency. Big constituencies will have a larger print run than small constituencies.

The number of constituency-specific ballot papers sent to a polling booth will be determined by the number of registered voters residing in the ward. Big wards will be assigned more constituency-specific ballot papers.

Elections to parliament and elections to the state legislatures are conducted by the ECI. The ECI bears all the costs pertinent to the conduct of elections.

The digital ballot

Let us read this again: A vote has no materiality. A vote has no prior existence. A vote is intangible. A vote emerges as a choice exercised by a registered voter. A vote is born inside the polling booth.

If a vote has no materiality, can it be created digitally? Yes, of course! If a vote has no materiality, can it be cast digitally? Yes, of course!

A vote is a choice. It is intangible. How we express it is left to our convenience. Hence, can we express our choice digitally? Yes, of course! Can our vote be born digitally? Yes, of course!

Let us shout this out: Our vote is born digitally inside a voting booth. It does not exist until then. It has no materiality before it was born. It has no materiality after it is born. It is digital. It is wholly digital. Yet it can be counted.

The digitally-born vote is an expression of our intangible choice. No one can touch our choice or feel our choice. But our choice can be expressed digitally. It can be counted.

But, we do not need a paper ballot that is then digitised to become a valid vote. We merely press the button representing the name and symbol of our chosen contestant. The digital vote is born inside the polling booth. It then belongs to our chosen candidate or contestant.

All other rules that apply to a paper ballot apply to the digital balloting process and the EVMs. Elections to parliament and elections to the state legislatures are conducted by the ECI. The ECI uses its electronic resources and human capital. The ECI bears all the costs pertinent to the conduct of elections using EVMs.

EVMs and digital voting

First, EVMs belong to the ECI. They are operated by the ECI. Each EVM is customised to represent a constituency. Each EVM contains the names and electoral symbols of the contestants seeking to be elected from a constituency. Every EVM is specific to a constituency. They are not transferable from one constituency to another.

Second, representatives of the ECI work on behalf of the ECI at each polling booth. A polling booth may serve voters living in multiple residential streets, colonies and neighbourhoods. Multiple polling booths may serve one constituency. However, one polling booth serves only one constituency.

Third, registered voters enter a voting booth on the designated day of voting. They then present their identification document(s). They do not carry their own EVM! This is very important. A vote is valid only when it is cast on an ECI-operated EVM.

Fourth, the registered voter has the index finger on the left hand inked so as to enforce the “one voter, one vote and only one vote” tradition.

Fifth, in an enclosed space, the registered voter “votes” or “casts her or his ballot” by pressing the button against the name and the symbol of the chosen contestant.

Sixth, only one press of one button is possible.

Seventh, exit from the enclosed space without pressing the button on the EVM means there has been no vote cast.

Eighth, valid pressings of the buttons on the EVMs are electronically counted. The contestant with the most number of valid votes is the winner. This elected member will represent the constituency.

The instructional inferences

Money is wholly similar to a vote. It does not have any materiality. Money is not as material as gold, copper, a pen or a pencil. Hence, money can be born digitally. Legal money or legal tender is born through a process that is similar to a valid digital ballot.

The Election Commission of India and the digital ballot are intimately related. The Reserve Bank of India (RBI) and the digital Indian rupee are as intimately related.

Legal money or legal digital money is not set to any maximum. There will be as many units of legal digital money as digital ballots to represent people and their economic activity. Legal digital money is not a drawdown from a stock of preset numbers. The RBI will determine the quantity of the digital Indian rupee created. 

By contrast, cryptocurrencies are set to a maximum by ordinary businesses. These ordinary businesses are opaque. They exist outside the supervision of people-centric and citizen-centric institutions of the state. They have no association with the sovereign. These ordinary businesses that issue cryptocurrencies are not affiliated to the sovereign.

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