The existing government absolutely does not write the protocols. Rather the ecosystem around the protocols (or more accurately maybe something like versioned semantic modules) becomes a new paradigm that supercedes traditional government.

How or whether that type of thing comes into existence is obviously extremely challenging and isn't determined.

I believe that useful governments will support some structures that enable these types of systems, but must not be allowed to directly control them -- we have too much evidence of how poorly that works out. That will be the remaining utility that allows the existence of traditional government, until these new systems are fully deployed.

Yes, data management isn't free, and there are severe challenges related to that. But we have technologies that give us hope that we can find better ways to do data management than just letting Facebook or Google track everything we click on and store them in their own data centers.