Back at the height of the blockchain bubble, I made a hobby of pointing out that crypto weirdos were palming a card. I used this formulation:

if: problem + blockchain = problem – blockchain

then: blockchain = 0

https://pluralistic.net/2022/01/30/the-inevitability-of-trusted-third-parties/

You see, blockchain weirdos kept insisting that they could solve problems related to trust and institutional design with "smart contracts." Rather than having to trust a board of directors to steer an organization, you could just have a self-executing institution, the "distributed autonomous organization" or DAO.

So for example, if you want to buy a copy of the US Constitution at a Sotheby's auction, you could set up a DAO to raise and pool the funds, eliminating the need to find trustworthy people to receive, hold and deploy these funds:

https://en.wikipedia.org/wiki/ConstitutionDAO

However – and here's where the palmed card comes in – the DAO can't go to Sotheby's and place a bid on the Constitution. Instead, the members of the DAO have to elect a guy to receive all that cash, walk into Sotheby's, get one of those little ping-pong paddles last seen at the State of the Union in Chuck Schumer's withered claw (emblazoned with the brave slogan "You're hurting my fee-fees&quot and raise the paddle during the bidding.

That guy doesn't have to go to Sotheby's. That guy can simply walk away with all the money. Members of the DAO are trusting this guy with their entire collective treasury. Indeed, since the DAO has no corresponding legal entity, it might even be that members of the DAO can't sue this guy if he steals all their money – and even worse, without a limited liability structure, it might mean that everyone in the DAO can be sued for anything bad this guy does with the money.

Which raises the question: what's the point of building this insanely complex hairball of blockchain-based smart contracts to raise and hold the money if you're just going to hand it to this guy and trust him without limit? Why not just have that guy set up a Zelle account and a Whatsapp group? In other words: the problem that the DAO is trying to solve is the difficulty of trusting people with the keys to the kingdom, but no matter how much blockchain you sprinkle on this DAO, it ends with this one guy walking around with all your money, which he can steal with impunity if he so chooses.

Or, put more succinctly:

if: problem + blockchain = problem – blockchain

then: blockchain = 0

This turns out to be a really good way of assessing policy prescriptions for their soundness and foundation in reality, because – as the blockchain swindle shows us – it's possible to come up with entirely fictitious solutions to entirely real problems. The problem of designing a trustworthy institution that can't be betrayed by its leaders and whose operations don't consume all its resources is a real problem – it's quite possibly the real problem – but adding a DAO does nothing to solve the core problems of institutional design, and actually makes some of those problems worse.

There's another real problem with a fictitious solution that is – surprise! – tied to another tech bubble: digital sovereignty.

It's a genuine problem that everyone in the world (outside of China's sphere of influence) is glued to America's tech platforms. These platforms steal everyone's money and data, and every country has signed a trade deal with the USA promising not to let its own technologists and entrepreneurs go into business making add-ons and complementary goods that remediate the defects in America's tech exports:

https://pluralistic.net/2026/01/29/post-american-canada/#ottawa

What's more, Trump's response to finding himself in this poker game that's rigged entirely in his favor is to flip over the table because he resents having to pretend to play at all (as November Kelly so aptly put it). His incontinent belligerence on the world stage sees him making bids to steal whole countries and he's recruited American tech giants to help him in this chaotic program of lunatic imperialism. When other countries' public officials make decisions that Trump dislikes, he gets companies like Microsoft to disconnect whole institutions from the internet, deleting their files, email archives, calendars and address books, and depriving them of the ability to connect to any service tied to their Outlook accounts:

https://pluralistic.net/2026/04/20/praxis/#acceleration

Which means that if Trump wants to steal Greenland, he doesn't have to roll tanks into Nuuk – he can just brick the country of Denmark. He can shut down all their ministries, every large firm, every household. He can shut down their iPhones and Android devices. He can kill their smart-speakers. He can hormuz the world's supply of Ozempic, Lego and ferociously strong licorice:

https://pluralistic.net/2026/04/04/digital-subjugation/#greenlands-next

It doesn't stop there! Trump can also shut down every tractor!

https://pluralistic.net/2022/05/08/about-those-kill-switched-ukrainian-tractors/

This is the digital sovereignty risk. It's also the digital sovereignty opportunity. If countries repeal the laws that the US bullied them into accepting, laws that protect US tech giants from local competitors who block their plunder of data and money, they can turn America's tech trillions into their own tech billions. As Jeff Bezos likes to say, "your margin is my opportunity":

https://pluralistic.net/2026/01/30/zucksauce/#gandersauce

Meanwhile, repealing these US-protecting laws would enable countries to extract their data from US platforms so they can move it into domestic alternatives, and bypass the software locks that block them from updating phones, cars, tractors and ventilators to protect them from remote killswitches:

https://pluralistic.net/2026/01/01/39c3/#the-new-coalition

The digital sovereignty risk is having your country's government, businesses and industries terminated by Trump. The digital sovereignty opportunity is making billions of dollars by producing and exporting products that defend people from Big Tech plunder and Trumpian killswitches. That is the real world.

But many "digital sovereignty" advocates are living in an imaginary world, in which the digital sovereignty risk is that Trump will shut off their country's access to AI.

This is where the "if problem + blockchain" formulation comes in handy. If Trump shut off Canada's access to Chatgpt, Claude and Grok tomorrow, nothing would happen. No significant business, no federal or provincial ministry, no municipal government depends on these products for anything essential. And if Canada were to build their own local AI to sub in for Chatgpt, Claude and Grok, it would loose tens, if not hundreds of billions of dollars. Worst of all, a national AI strategy does nothing – not one solitary thing – to protect Canada from Trump shutting down our ministries, our companies, or our tractors.

In other words:

If: digital sovereignty + AI = digital sovereignty – AI

Then: AI = 0

If you think AI tools are nifty and want Canada to invest in AI, then first, please stop pretending that this has anything to do with "digital sovereignty." Not only is this a transparent bit of nonsense, it's a dangerous one, because digital sovereignty is a real problem, and AI does nothing to solve it.

If you want a good "national AI strategy," try this: save your money until the bubble bursts, and then buy your GPUs and hire your talent at 10 cents on the dollar and put them to work refining open source models:

https://pluralistic.net/2025/12/05/pop-that-bubble/#u-washington

Buying AI at the top of the market is nuts. That would be like shopping for Aeron chairs and foosball tables in March 2000. If you just sit tight for a couple months, you'll be able to find bankrupt dotcom entrepreneurs selling these at knock-down prices out front of their formerly overpriced office space in the Mission, in the time-honored tradition of former Wall Street millionaires selling apples out of their Rolls Royces:

https://digicoll.lib.berkeley.edu/record/323794

(Literally: I bought a "dining room set" of six $1500 Steelcase Leap chairs in the summer of 2000 from a failed dotcom CEO on Van Ness for $25 a piece – still in the original plastic!)

And in the meantime, please let's stop pretending that digital sovereignty has anything to do with "national AI." If Trump takes away your AI, everything is fine. If Trump takes away your iPhones, Office 365 and tractors, your country grinds to a halt. This is just not that complicated:

If: digital sovereignty + AI = digital sovereignty – AI

Then: AI = 0

(Image: Armin Kübelbeck, CC BY-SA 4.0, modified)