How Blockchain can Solve the Crisis for Autonomy in Catalonia

This is the first in a series on autonomy, separatism, and decentralized identity called Decentralized Geopolitics. Updated as of October 24th, 2017. Edited by Luke Bateman

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Updated as of this moment from October 21st:


You’ve probably heard by now that the Catalonian Secession crisis in Spain has been destabilizing the country and the region. There are two primary causes including Catalonia’s mostly divergent cultural identity, developed and carried through the past 1000 years of its history, and the current government’s lack of providing due funding to the public projects in the Catalonian region.There are two key problems here, a social-political issue and an economic-political issue. Cryptocurrency, digital identification, and decentralized ledger technologies may be the solution to the economic-political issue.

This article provides background to the Catalonian crisis and tries to encompass some evidence describing what Catalans seek to gain from separatism. It addresses concerns about the validity of a referendum by describing a process in which the Catalan people could hold a decentralized referendum in the face of authoritarian behavior by the Spanish government aimed at suppressing democracy. I provide a solution using three use cases for a three-pronged approach to Catalan economic autonomy. Lastly, I place these solutions into the larger thematic changes of decentralized geopolitics and what it means for you.

Background on the Economic Issue

Many Americans tend to think of Spain has a politically unified entity existing within the political framework of the Eurozone. Spain has a diverse political and cultural history. It is a federal system, like the United States, existing with 17 states. But what complicates this federalist design (much like in the US) these 17 states are further divided into 50 provinces. Catalonia alone contains 4 of these provinces: Barcelona, Girona, Lleida, and Tarragona. Now, unlike the United States, Spanish states have rich and unique histories spanning back to the medieval era. Spain is riled by separatist movements large and small.In addition to Catalonia, serious separatist movements exist in Basque Country, Galicia, and Valencia, while smaller movements exist in the Balearic Islands and Asturias.

Source of the map: Trip Savvy

Catalonia recently tried to appeal for political independence through the Federal government. This referendum was carried out years ago, and separatist mentalities have been part of the popular sentiment for a better part of the last few decades. Five, important moments have made this issue increasingly important: first, the end of Spanish dictator Franco’s rule in 1974 and autonomy granted under the 1978 constitution; second, Spain joining the Eurozone in 1986 and its adoption of the Euro; third, the economic recession in 2008; fourth, the impacts on Spanish unemployment and interest rates during European sovereign debt crisis in 2012; last, an unofficial vote on independence in November of 2014 in which 80% of 5.4 million voters backed secession. Source: BBC

Source: FT. This graphic shows drastic dips in 2008 and 2012, but shows the Catalonian region’s faster recovery.

Spain was greatly affected by the EU currency price shocks and the recession. These economic challenges significantly worsened the country’s unemployment and average income, even becoming so apparent that the national average income in Spain is $3000 less than average incomes for other EU nations. Furthermore, Spanish youth have experienced a negative trend in terms of welfare in a phenomenon that has been referred to as Spain’s Lost Generation. More than 40% of Spanish youth between ages 16, and 25 remain unemployed, which has furthered the trend of economic tensions and frustrations. Thus, the country has experienced a “brain drain” of its talented individuals in an economy flush with temporary or low-pay work. Source: FT

Spain has been hurting economically for a while. It has been included in the popular acronym PIIGS (Portugal, Ireland, Italy, Greece, Spain) of Eurozone countries most devastated by recession and crisis. This economic strain has traveled down from a national level to impact the relationship between Spain and its regional governments. For instance, Spain has acted conservatively with taxpayer money due to the poor distribution of the country. Catalonia is Spain’s wealthiest region, with incomes hovering around the EU average. This has put pressure on the relationship between the federal government and Catalonia. As a result, many Catalan citizens don’t believe their region has been experiencing the reciprocal benefits of its economic productivity and that public spending has been lagging behind.

In a regional poll, 80% of those surveyed agreed that the Spanish central government asked for too much money without paying back the Catalan taxpayers, and also made poor decisions that yielded little benefit to Catalonia’s public infrastructure. Thus, Catalan sentiments can be best represented by the saying: “Madrid nos roba” meaning “Madrid robs us.” Link to Survey.

An equivalent case study in the United States was called into comparison by a Dartmouth College professor who studied how much New Jersey and Mississippi earned, in terms of federal spending. The study revealed that New Jersey received $.88 for each $1.00 of taxpayer money while Mississippi received $3.07 for the same dollar. However, by comparison, Mississippi has a per capita income of $25,000, versus New Jersey which has $58,000 per capita income and was shorted by nearly $4,000 meaning Mississippi got nearly $7,900 extra. This exemplifies that the lack of equal redistribution of taxpayer’s money is not an issue endemic to Spain. However, greater transparency on both sides could assure both parties of the accountability of the other.

Furthermore, Catalonia’s regional government claimed that the central government failed to deliver funding between €11 billion to €15 billion in 2011, around €1,500 per capita, while the central government claimed this gap was only €8.5 billion. Because of the money lost in the friction of government oversight, Catalonia claims it is missing out of a multiplier effect that could strengthen the public sector in its economy. Source: Diplocat, Lavanguardia

At the moment, the Spanish government is adding authoritarian tactics such as censorship and democratic repression to the mix, which has only hastened the momentum by which Catalans seek to progress with their independence referendum. This independence referendum drew 43% participation from Catalonia and from those who voted had 90% in favor of separation. It has been called illegal by the Spanish central government. Moreover, the Spanish state defends their actions on their crackdown thereafter by claiming it was defending the legal status quo. Spain has even called upon support from France’s foreign minister, Jean-Yves Le Drian, and the EU to protect the sovereignty of Spain as a national entity and denounce the secession. The central government needs new proposals to constitutional reform, a reformed funding mechanism, improvements to public infrastructure, health, and education in order to find consensus with the Catalan regional government. Blockchain could be the answer. Source: London School of Economics

Catalan Identity Sentiment

An analysis of Catalonian public sentiment is important for developing a solution that works on top of the existing identity infrastructure.

Source: Cagle

Many Catalans feel very strongly about their identity. They feel this identity is inherently connected to their political independence. A 2014 study by the London School of Economics found the following results correlating self-identity with the drive for independence.

Graph #1 — Catalonian independence should the EU revoke Catalan membership

It might be obvious but Catalonians prefer maintaining a supranational identity. Even despite their drives for cultural freedom are high, there are economic and legal burdens associated with leaving the EU. Blockchain could simplify existing legal frameworks for both end cases of change: 1) a Catalonia independent of Spain and the EU and for 2) a Catalonia with economic autonomy through the use case of smart contract law. Managing law between these types of parties is a topic for another time but refer to these links from Georgetown Law Tech Review and the ISDA to learn more.

Graph #2 — Trust in public institutions in Catalonia (2014)

Unlike in the United States, Catalonians have little problem trusting their media. They place more trust in their local institutions, city council, local police, local parliament than they do other entities. An interesting finding from 2014 is that Catalonian citizens have more trust in the Spanish National Police and Guardia Civil than the Spanish Parliament. It would be interesting to compare the trust issues now in light of the harsh treatment of those seeking an independence referendum.

Trust issues have long been tackled by blockchain developers. In a multiparty environment of mutually distrusting participants, decentralized ledgers allow for the truth to dispersed among the crowd in an append-only format. As part of the solution, e-citizenship is a massive first step towards generating this trust. However, trust in this context of a more macro-level participant might exist between agents within all these parties, particularly between the Catalonian Parliament and Spanish Parliament, Central Government, and Monarchy.

In particular, there is a feeling that insufficient political autonomy has been achieved.

Graph #3 — Relations between Catalonia and Spain

Moreover, Catalans feel strongly for their status to at least attain a degree of autonomy within Spain.

Graph #4 — Belief of Catalans in autonomy

The following graph demonstrates a significant degree of contrast between those in favor of some degree of autonomy or independence (88%) and the percentage of the population that thinks that living conditions would improve (61.8%).

Graph #5 — Living Standards

Another interesting result shows that the region’s internal social stability would not be impacted by independence.

Graph #6 — State stability post-independence

According to these public sentiments, there are serious internal concerns about the aftermath of the independence for Catalonia. They risk their financial and economic potential future with other states in Europe. Let’s take a look at the industries that could be affected Catalonia’s decision to leave.

A brief overview can be visualized below:

Graphs #7 & #8 — Catalonian Exports

Catalan exports were chiefly focused on 4 countries including Portugal, France, Germany, and England.

Traditional industries like chemicals and automobiles are being replaced by quick growth (8.9% annual growth last year) in the high tech industry, particularly in software development. Catalonia may be uniquely positioned to become a digital economy.

Source: ISISnova. For more detailed information, take a look at this infographic here.

Catalonia is uniquely positioned with growth in its high tech industry for growth (8.9% annual growth in high tech) and experimentation for blockchain technology.

The industries that Catalonia exports are those being targeted by blockchain use cases currently. A number of services are interested in chemical, agricultural, and machinery supply chains. If digital identification inter-operated with the Catalan permissioned blockchain, there could be an ease and transparency shared between Spain and its subregional government’s exportation that could enable them to share knowledge on trades while remaining economically independent. Furthermore, Catalonia can leverage the fact that from 2003 to July 2017, the Catalonian region attracted 43.3% of foreign investment into Spain.

A number economic indicators support the strength of the Catalan separatist sentiment. Catalonia accounts for 19% of Spain’s GDP, even more so than the capital region Madrid and has a GDP per capita that is $4,600 USD higher than the rest of Spain. Despite this, Catalonia’s debt as a proportion of its GDP is nearly 35%, which has tripled since the first crisis in 2009, above the national average of 24.8%. Thus, the region faces poor credit rating due to regional complexities within its funding system and high borrowing costs. Source: FT


Two of these solutions are presented as independent use cases through Digital Identity and Digital Governance while I also aggregate these into a stacked solution.

#1 Catalonian E-Residency

I introduced the article with an abstract describing a three-pronged solution that involved interoperable cryptocurrency, digital IDs, and blockchain applications. A serious issue to overcome is the question of identity and how our economies and our interaction with the government shape them. The key question might be to ask how to add an additional layer of digital identification which can work on top of existing infrastructures like Spanish national identification and personal identification. If reflected in the current crisis, this type of identity would add a “Catalan” layer of identification, represented in the digital form. It is a self-sovereign identity registered through a proof-of-authority model whereas certain features of the person would be captured at the point of enrollment, or when that person essentially has their details sent to the blockchain in a transaction, to claim a new citizenship.

At the point of enrollment, the government could take a series of tests and ask a series of questions and tests to prove the identity of those seeking this distinction. To give a comprehensive overview, there’s a number of tricks for entering this information. Just like a normal data entry / citizenship examination, they might ask for identifying properties like height, gender, sex, and date of birth. On top of this, they might ask for details describing property ownership like land legal rights, education status, and job occupation. These attributes can become digital assets. There could also be background checks into the identity being claimed, such as social media or resume. Lastly, there could be a series of biometrics, and several-factors of digital identification employed as proof. All this may be overboard but is mission-critical as blockchains are based off the cleanliness of data.

The key question remains for making identity compatible at the regional, federal, supranational, governmental jurisdictions. This means that existing infrastructures need to work with the identity produced.

To exemplify what this might look like, we turn to Estonia which has made huge strides in digital identity. Below you’ll see Estonia’s E-Residency program. Catalonia could implement this as an alternative to a nationalized identity. If anything like Estonia’s E-residency program, the Catalan national identity adds tremendous potential value to their economy, especially by opening up Catalonia to digitally based opportunities and virtual citizens.

Source: ConfluenceMedia; original

Anyone in the world can sign up to become a citizen of Catalonia for the cost of 100 Euro. When the background checks are complete, which supposedly take upwards of 10 business days, the applicant receives the government-issued smart ID card that authorizes that the user is a citizen of the country. Now, with the credentials from the card, the users gain access to digital signatures on documents, access secure services, and make transactions. It adds tremendous opportunity and simplicity when working within the European Union. This could be done hassle free and remotely, allowing aspiring entrepreneurs from the US or Australia to gain access to working in the European Union in safe, and efficient ways, without compromising border security.

A significant number of E-citizens have applied to the program. As of June 2017, over 20,000 people from 140 countries had applied and most had received their E-Residency card. Nearly 12% of these foreign citizens have a company established within Estonia, and more than 16% of Estonian companies now have an e-Resident associated with them as an owner or board member.

Try it yourself to see how easy it is. Go to for any information or questions you still have, then proceed to From the application, you will be able to fill out it entirely online. There will be identifying characteristics upload your photos, describe your purpose for applying, and pay the 100 euro e-Residency state fee. An e-Resident message sent through the mail service with your digital ID card and a smart card reader will be sent to your verified location.

On top of this, key benefits for e-residency include privacy through identity management through blockchain enabled services. Do not expect there to be a hack on the government which steals your information. Furthermore, using blockchain enables you to conveniently transfer wealth and digital assets anywhere through by means of your Estonian e-Residency. E-Residency has been treated like a platform like Apple IOS or Android that enables new innovation. Lastly, other e-Residents can connect openly to other e-Residents. This means that the identification offers a significant network effect and opportunities for the enterprising business person.

For more information on potential benefits see this:

#2 IPFS as a means for a decentralized referendum:

Digital voting has long been a use case for blockchain development. Down below, Instituto Científico de Gobierno Electrnico is the Spanish government’s own entity assigned to study the application of digital voting. Source:

With the Spanish Guardia Civil cracking down on physical voting stations, perhaps it is best for Catalonian citizens to pursue voting on a digital network. If so, this might be the first deployment of a decentralized vote. This would prevent external tampering with the original contents of the vote.

What solution for holding a decentralized referendum is through the InterPlanetary File System. On GitHub, the project is described as “a new hypermedia distribution protocol, addressed by content and identities. IPFS enables the creation of completely distributed applications. It aims to make the web faster, safer, and more open… IPFS is becoming a new major subsystem of the internet. If built right, it could complement or replace HTTP. It could complement or replace even more. It sounds crazy. It is crazy.”


What IPFS is attempting to do is create a new internet protocol. By changing the addresses of websites on the internet so that instead of going through domains you’re going straight to the item, IPFS truly decentralizes the internet. Picture searching for this article on Medium. You might have to go through the main Medium website to get to the article or a third party gateway like Twitter or LinkedIn first. Instead, imagine Google searching for this article and an original PDF was right there.


Protocol Labs, the team that worked on Filecoin, have changed their focus to IPFS now.

IPFS is a protocol like HTTPS. As of now, IPFS does not take investment, just like HTTPS does not take investors. IPFS is not a company, rather it is essentially a naming service that enables you to be addressed to certain documents and files online.


As an aside there have been a few attempts to use an IFPS gateway as a way to sidestep the Spanish government’s censorship of referendum websites. Here’s an example:


If the Catalan officials wanted to hold their referendum, they would distribute the hash of their referendum across social media. From there, everyone else can be assured that the link to that content file will be the original, untampered source published by Catalan authorities. Because IPFS ensures both decentralization and immutability from the source, no third party can interact with that link.

Even the Spanish government could not change where the link is taking them. IPFS is immutable and hash addressed, so ‘modifying’ something yields a new address. In the same way that SHA-256 encryption works, where it is possible to boil down a huge chunk of text containing anything inside, be it a whole document, a paragraph, or a something as short as a 140 character tweet, into a hashed password that looks like:


Try it yourself here: Movable Type

These hashes enable an infinite number of possibilities for address names.

IPFS addresses update with modifications to the old version unless their links change as well. Effectively, sharing a hash address to the main page is sharing a snapshot of the site. So the IPFS has for a digital referendum in an online format created tomorrow will remain in that format forever.

IPFS is currently in development with python and javascript implementations, but there is a golang implementation here. The links for @Kordless ‘s Github is here.

Link for Catalonians:

IPFS opens up new avenues for political expression and for online expression. A central government is naturally going to try and prevent secessionist movements, but believing that the referendum itself is “illegal” may be counter-intuitive. Regional governments are limited in their powers despite what their inhabitants may want because they are ultimately governed by a top-down legal framework from a central government. The referendum itself would need to be legally conducted, prevent against fraud, and not disenfranchise the constituents it seeks to represent. Furthermore, using such a system challenges the government’s usage of personally identifying information, should any be collected for authentication purposes, which could be considered a criminal act. This leads to the problem that no Catalan referendum will be accepted by the central Spanish government, but it does yield light on how the government of Catalonia could be managed digitally and in a way that would not allow the central government to prevent it from holding elections or voting on issues.

Here’s a further explanation:

A possible solution would be a blockchain-based voting system that could be built upon government-based digital identity that would be tied to the individual voter’s history and verified, while keeping its personally identifiable information hidden. The key problems to avoid are double, and fraudulent voting, protecting against the possibility of someone using a bot to spam positive “Yes” votes, and to safeguard against the release of identifying information from a targeted hack or social network.

This issue could be solved through Zero-Knowledge Succinct Non-Interactive Argument of Knowledge” Proofs (zk-SNARKS). zk-SNARKS solves the above problems because through its logic-based mathematical function, one can prove to another party that they know a piece of information, like a secret (or personally identifying information), without divulging to that party the details of that information. All of this occurs without any communication between the prover and verifier. It works through a function which looks like:

function C(x, w) {return ( sha256(w) == x );}

“In other words: the program takes in a public hash x and a secret value w and returns true if the SHA–256 hash of w equals x.”

Read more here:

And here:

In addition to ZCash, a zk-SNARKS based cryptocurrency, Julian Assange even gave Manero, a privacy coin, a shotout on Twitter in regards to Catalonia:

One of the key issues voiced from the forum was “How much autonomy should regions of sovereign countries be given?” Furthermore, “if a region isn’t legally given that level of autonomy, what is the most peaceful and just means for a region to attain it?”

These are questions whose answers require a stance beyond the scope of this paper.

For more information on how the referendum could be protected by an ethereum blockchain, check out an article posted by Jordan Daniell at

A website from the Netherlands also considered this idea a few weeks ago and the potential ramifications of an entire nation moving to cryptocurrency. They cited “significant congestion” of the Bitcoin network if the government were to somehow seize Catalonia’s financial resources, due to the movement to cryptocurrencies. In this case, it would be the equivalent of a modern-day financial crisis, but cryptocurrencies would mostly hold their value during this time. Since the time of the crisis heating up, and especially in October, Bitcoin prices have been rising comparatively to altcoin prices. While this specifically considers what might happen to an influx of users (7.5 million Catalans) as compared to the total 16.8 million Bitcoin wallets in use, there would still be a tremendous overflow of market capitalization if these citizens were to onboard into digital currencies. Source:

Read more here:

#3 — Three-Pronged Solution

A three-pronged solution introduces a new digital currency, a multifaceted government identity, and layers of decentralized applications for governance, property, and

Cataloniacoin was a 2014 attempt to make a Catalonian cryptocurrency. They created the coin in response to the November 9th query of that year which generated significant media buzz as a turning point in the region’s relationship with the government. Source: Bitcoin talk thread

During the current crisis, there is significant media buzz about companies leaving Catalonia for more favorable legal environments. This includes the real estate property group Inmobiliaria Colonial, infrastructure firm Abertis, publishing firm Grupo Planeta, and telecom firm Cellnex, which said they would relocate their operations headquarters to Madrid if political uncertainty in Catalonia continued or parliament unilaterally declared independence. The situation is tense and the economic ramifications of hasty political decisions could be severe.

We take a look at the Catalonian problem through the lens that there are two separate problems involving their independence: the cultural drive towards social-political independence as a people and the necessity for economic-political autonomy to account for the current weights on the economy.

First, we devised a roadmap to resolve the second scenario for autonomy. We did this based off of creating an internalized digital economy that interacts with the rest of the world. We then created a transparent federal funding mechanism which would enable the government to track the expenditure of the money within Catalonia to ensure accountable returns with the central government. We can also create a derivatives system for Catalonian authorities to invest extra money into other Spanish states, and have those physical assets tracked as capital assets flowing through a system. Through a series of smart contracts, Catalonia can argue for their deserved return on investment with a verifiable signature for every transaction from the entrance of fiat central government currency into Catalonia’s government’s digital currency.

But why stop there? An internal Catalonia Coin, in this case, can be used to create a layered economic system, an entire digital economy stacked atop the traditional Spanish / EU economy. The Catalonian government itself can be digitized and Catalonian citizens can receive public benefits through their citizenship identification, as outlined above by the example of Estonian e-Residency. These digital identities can be protected through zk-SNARKS for multipurpose applications and the regional government can devote technical resources to protecting these channels.

Interoperable blockchains can be used for this scenario. There are digital assets, government documents and medical records of Catalan citizens stored on private blockchains. A cryptocurrency (Catalonia Coin) can then be assigned to citizens registered through the government. Catalonian Coin can be used on top of the Euro to keep value with Catalonia, separate from the Euro, which can offer benefits to those who own the currency and make payments with it. Lastly, blockchain applications can be created for exchanges between Catalonia and Spain, as well as the rest of the EU. By digitizing Catalonian citizens’ assets, we can open the marketplace to new economic opportunities not contained within Spain, and build an interoperable system with Estonia’s e-Residency and other countries that will be deploying similar digital identities. We thus have solved for economic autonomy while keeping Catalonia within Spain.

Here’s the three-pronged solution that combines permissioned and permissionless ledgers.

Blockchain’s key value-add is the efficiency of redistribution between multiple parties, including private individuals, while maintaining a publicly accessible ledger. Blockchain by itself is not a panacea, but rather it allows for data immutability and for whole asset transfer. These are two essential preconditions for sharing information between multiple distrusting parties, and this allows applications to be built atop that traditionally unstable foundation. From this data which we can trust, it is possible to build an artificial intelligence that helps to execute on the goals of simplifying the calculative complexities that happen at every step of the solution. It also acts as mutual assurance for the prospects of economies of scale in the public-goods provision, inter-regional differences in taxation and the public finance benefits of large jurisdictions versus the costs of political heterogeneity.


We have long believed that nation-states rely on the holding of territory. Nations are defined as an identifiable people. Digital currencies and blockchains may be the technical key to dividing nation-states into states within nations. We could be on the verge of a radical reversal of world powers similar to what was experienced during the 1700s and 1800s with the incorporation of smaller states in Italy, Germany, Russia, and Japan into collective, unified, and centralized nation-state empires.

We define countries as a nation that exists within the bounds of a separate governance that occupy a particular physical territory. We define nations as peoples bounded by similar descent, language history, or cultures. What we soon might experience is a governance that occupies a territory within cyberspace with little national identity of its constituents existing beyond the common language of shared computer code.

Perhaps people will be able to subscribe to the digital nation which best benefits their lifestyle. If government identities could be distributed this way, what prevents people from assuming the identity of their choice rather than the one with which they were born?

Let’s consider trends in technology and geopolitics: Estonia’s e-Residency, the general trend of separation in the EU, the breaking up of nation-states due to economic factors like in Scotland, the concept of floating cities and seasteaders like Blue Frontiers and the Seasteading Institute, wild ideas for libertarian governance like Roger Ver’s Free Society and the Space Kingdom of Asgardia. Consider the future of Elysium and Mars colonization by a corporation. We could be looking at an evolution of nation-states into decentralized economic holdings of corporatist actors. This leads to the question of how does the technology we’re building today shape the future of decentralized geopolitics?

This is an issue and question we will return to.

Here are some additional questions to consider:

1. What defines economic independence? What defines economic autonomy?

2. Could political and economic autonomy exist in a decentralized form exist within a central authoritative governing body?

3. If all these solutions were implemented, what would be the promise of the technology?

4. Who would implement the technological solution?

5. How does this reflect a trend towards separatism? Is it more realistic now?

6. Could developing and smaller countries leapfrog larger countries? Is there something to be said about smaller administrations with more personalized administrations for their constituents?

7. How much autonomy should regions of sovereign countries be given?

8. If a region isn’t legally given that level of autonomy, what is the most peaceful and just means for a region to attain it?”

Thanks for reading! Sources all attached.


About the Authors:

Mitchell Opatowsky is Head of Operations for a DC-based cryptocurrency market intelligence, blockchain development, and investment company for Alluminate Consulting. Mitchell’s background is concentrated on international development economics and geographic information systems. He’s fascinated by social business model alternatives to traditional nonprofit models, particularly as mechanisms for creating economically viable solutions to problems that have yet to be tackled. Moreover, he’s passionate about smart city solutions and creating modular living environments designed for social inclusion, minimizing extreme wealth inequality, and eradicating poverty.

If you’re interested in blockchain, have an idea that you want to test, or want to geek out about anything, contact

Co-founder @BUIDLHub @DexibleApp