Pax Bitcoiniana: after the last state on Earth

As a fun thought experiment, imagine that Bitcoin not only swallowed up all the money in the world,but also all states. Of course, this will not happen in one day. Bitcoin’s economic paradigm is quite abstract for the majority, and its political effect is even more difficult to understand.

Since after 150 years I will no longer be here,The following notes are written for historical purposes only. If you read this in the future, let it be a testament to you how it all began.

1. World Map: Consolidation and Fragmentation

The early 2000s was a period of "cartographic stagnation."

From 2000 to 2019 only 3 new states were formally included in the official UN list: Montenegro, South Sudan and East Timor(Kosovo tried, but Russia did not “let it in”). The planet was in turmoil. But the borders remained frighteningly inert.

On the contrary, at the end of the previous century there was a realnew states boom. The most famous example is perhaps the formermembers of the USSR — the short-lived anomalously centralized core of power — but similar fragmentation was also observed in the Third World. For example, more than 3/4 of the Asian states (32)declared independence from 1900 to 2000.

In Invisible Lands, Joshua Keating explores the seeming"Lull in the redrawing of borders"observed during the first two decades of the 21st century. Thisfar from a long-term trend.

The following is a graph of the number of sovereign states in Europe:

Throughout the second millennium, borders in the Old World were far from stable. In some centuries it was observedconsolidation (red down arrow), while in others it occurredfragmentation (green up arrow).

Politicsplayed a very important role in those days.And before the advent of sovereign money, politics meant something completely different: not a hobby for ordinary people, but a sport for the elite. This was not a game of motivation, but an arena for disputes over power.

Politicians passed the world's workforce through an entertainment theater for making money, which then returned to a parasitic structure consisting of the same politicians.

The cognitive dissonance was so strong that in some countries the term “donor” was used instead of the concept of “taxpayer” - and no one objected.

People were taught (and they obeyed) to serve their army and honor their flag, save up fiat currencies and save 100-year “state” bonds for old age.

However, international war has become wastefulunproductive with the advent of improvised military equipment; the average fiat currency existed for only 27 years; and the median life span of states barely exceeded 50 years, and only a few managed to hold out for more than 100 years.

“Ignorance is strength,” as one writer said. For a long time this was indeed the case. The world map was ready to crumble into dust. And almost no one noticed it.

2. Technology and war: footprints on the map

Historically, there was only one way to permanently redraw borders: war.(Children learned this through a well-known board game. The Monopoly game, actually built on the struggle for power, was also passed down from generation to generation).

The war had two varieties. It originated eitherinsidea sovereign state, orbetweenstates.

International conflicts(which were the largest) led to a consolidation effect (empires annexed conquered territories).
Intra-national conflicts(which were born only in the absence of serious clashes with other states, or in times of relative “peace”) led tofragmentation(decolonization and declaration of independence).

The war was all-powerful, but, as one might expect,advantagein war could be obtained by different means. And the main one is technology.

The discovery of gunpowder gave China a 400-year head start inmodern arms race before this knowledge reached the Middle East. The Renaissance and the Industrial Revolution ensured Europe's place at the top of the colonial food chain for half a millennium. Research into nuclear physics and cryptography played a crucial role in winning World War II.

It may seem that after this war they died down. In fact, in the 20th century, wars began to become proactive.

3. Property and states as military alliances

“States” were a short-lived phenomenon that lasted no more than a millennium. They acted likemilitary alliances. Groups of people banded together to protectproperty rightswithin the limits of what they considered theirssovereignty.

Who did not want to participate in the military or legislative apparatus, he paid a fee from almost everything to finance third parties who did it for him.

Landhas always been at the top of the list of whatneeds to be protected. In the old days, property meant almost exclusively land. Over time, the concept of property has expanded. People began to appropriate and track ownership of abstract things such as publishing rights and ideas.

The higher, moral value of property - as history has painfully taught - has been the subject of deeper discussions on which it is difficult to reach consensus.

Platoprobably inspired by the Spartans, was against private ownership in most of its manifestations, including child custody. He saw property as corrupting, leading to envy and violence.

Aristotle, his student, had a different opinion. He refuted the argument that the joint ownership system would eliminate vices, since people are more in conflict over common property, rather than what is in their private possession. Aristotle considered private property important for progress, indicating that we are motivated to work hard only for what truly belongs to us.

Over the next two and a half millennia thesisAristotle found confirmation. States that did not protect the private property of their citizens were inevitably abolished, annexed, or disintegrated. Those states that coped well with this, as a rule, existed long enough to leave a mark in human history.

Success inproperty protectionwas highly correlated withmilitary power. Although this does not mean that the larger the army, the longer the state exists, in fact, apparently, there is an elegant balance between militarization and the longevity of states.

However, the majority sought to get to the forefront, targetingspecial privilege: imposing a monetary standard on the rest of the world.

Throughout history, states with the most powerful armies have invariably turned theirnational money into global reserve currency.

The trend began with ancient Athens and silverdrachmas. Next was Rome with a golden aureus and later a silver dinarium. Dinar occupied the throne during the heyday of the Byzantine Empire. Next was florin from Florence, who in the 15th century replaced the Venetian ducat. Then there was the Dutch guilder, the British pound, and after the Second World War - the US dollar.

Weaving historyprivate property, states and warsit is self-evident: the protection of property required violence, and states that were the best at dealing with this were monopolists of violence.

For a long time it was impossible to draw a line betweenthe stateand protectionprivate property, in addition to philosophical entertainment.

4. Asymmetric cryptography and immutable memory: a new state appears on the scene

"States" ceased to exist because they became obsolete,when private property was exempted from government.

Bitcoin was the first technology to make ownership and the exchange of economic value possible, contrary to any government jurisdictions.

You must agree to the rules;
You can freely join or leave.

That was it in a nutshellpoliticsBitcoin.

No one ruled. Managed by all.

Thousands of machines competed for network security. The result was a stable, unchangeable, always available for those who want to write his story, the state.

Bitcoin carried out a preventive war,protecting private property without a state- which was not previously observed on such a scale. If Bitcoin appeared in Ancient Greece, Plato and Aristotle would probably change their view of the nature of property.

The state of Bitcoin did not immediately get the right to be called such, since its innovation was based on a previously little-known field of knowledge, which only a few knew.

This disciplineoriginated in warAndforever changed her.

5. Ethnicity of cipher banks

Cryptography is the science of protecting and deciphering secrets.

The early development of cryptography was mainly motivated by war. In fact, the Second World War ended because one side managed to decipher the communications of the other.

The "Axis" (losing side) exposed the vulnerability of symmetric cryptography - where the samesecret phrase (secret) encryptedAnddecodedmessage.

The Allies (victors) laid the foundation for the discovery of asymmetric cryptography in 1976. Nowone secretcould be used forencryptionmessages, andother,privately held, - for hisdecryption. Mathematics allowed them to be created (and be their owner) by the same agent, and one could forever remain hidden.

If the participant in the scheme fully accepted his trustee responsibility, thishad major consequences.

Property Informationwas not issued, certified or stored by any third party:she was yoursand could be stored in your head.

“Sacred Guardians of Property”paid attention to this. This posed a threat to their very reason for existence.

In 1995The American government has prohibited citizens from exporting cryptographic software without a proper license, classifying such products as a type of weapon. The first popular version of asymmetric key software, PGP (Pretty Good Privacy), was considered “illegal” outside of America.

In practice this had little effect. The code was repeatedly made public and was printed for mass distribution under the protection of the First Amendment to the US Constitution.

These early examples of cyber activism were the work of ciphers. The creator of PGP has become a prominent member of this movement. He also had mentors who became key figures in the development of Bitcoin.

The cipher banks were a special ethnic group that took great risks, spreading technology and providing ordinary people with tools no less powerful than military weapons.

Many people confuse ethnicity with population or race.(which the human species does not have). An ethnic group is, roughly speaking,set of people having a common origin and linguistic and cultural kinshipwho do not necessarily live on the same physical territory.

In retrospect, the Cypherpunks seem to have had a clear vision for the future of politics. Remember I said thatWas war the only way to redraw borders long-term?

Their borders were originally intangible.

6. Islands in the network, free enclaves and temporary autonomous zones

In the literature of cipherpunk there is one influential character - Hakim Bey. In 1985, he published his work, Temporary Autonomous Zones.

Temporary Autonomous Zones (VAZ)is a manifestation of pirate culture(semi-nomadic, subtle, leaving ephemeral traces)in the digital space.

Bey analyzed historical enclaves, which he called "pirate utopias," from medieval assassins to anarchist Sufis. In his understanding“Islands on the net” (or “free enclaves”) are unavoidable symptomsthe decline of political regimes where the economy is becoming increasingly computerized.

Bay suggested that censorship-resistant communication technologies would cover the entire feast map with autonomous zones.

VAZ is the place where the revolution really takes place, even if it is short or only for a few. The author does not give a definition of the concept, so as not to impose political dogma on it.

“In the end, the WHA are self-evident. If the term is used, then it will be easy to understand ... understand in action. " - Hakim Bey, 1985

7. The people: the blood of states

At a fundamental level, the state consists ofof the people. If the people are properly organized, then the state is healthy. If disorder reigns among the people, then the state is unhealthy. It resembles an organism made up of molecules.

In 2019In a semi-autonomous region in the East, where a considerable share of the planet’s money has accumulated, a social crisis has arisen. The people of Hong Kong—known for their civilized culture—faced an assault on their sovereignty from a neighboring country and were not adequately protected by those to whom they paid taxes.

First, several thousand people took to the streets. Soon a quarter of the population joined the protests.

1.7 million citizens took to the streets peacefully with our calls on free-election! #FreedomHK #FreeHongKong #antiELAB pic.twitter.com/J6iwU8lSSP

— Joshua Wong 黃之鋒 ? (@joshuawongcf) August 18, 2019

To counter severe harassment, citizensdeveloped their own sign language, began to communicate through uncensored networks and dazzle police with massively distributed cheap laser pointers.

For the first time around the world(not in sci-fi thrillers, but in the news)Photos circulated of an angry crowdbreaks street cameras. In a matter of months, anti-facial recognition makeup has gone from being a fashion fetish to being part of everyday street style. Celebrities began promoting clothing that confused cars, gradually undermining the surveillance apparatus.

The methods of war were on the verge of full digitalization.

Everyone has the right to become a soldier online, regardless of location.

“Cyber commerce will inevitably lead to cyber money. This new form of money will reboot, limiting the ability of states to determine who will be a sovereign individual ”- Davidson and Rhys-Mogg,“ Sovereign Individual ”, 1997.

8. What does “state” mean?

For a long time, the significance of a sovereign state was determined by the Westphalian Accords. They put an end to the Thirty Years War in Europe and played a fundamental role in international law.

Two key points:Firstly, agents of geopolitics should be sovereign states;Secondly, regardless of the differences between them, in the face of international law, their sovereignty must be equal.

The Westphalian world is ultimately paradoxical. All sovereign states are equal before international law, but if someone does something that international law does not like, then this international law will punish him.

In practice, international law advocated by organizations such as the UN, WTO and IMF.

It's funny that philosophy and law long ago came toa good definition of law - only it was irrelevant, since all states were tied to borders that were constantly redrawn during wars, andwars were above everything else.

So-calleddeclarative theory of statehoodconcluded that states must act as agents of international law if they have:

certain territory;
resident population;
functional management;
ability to enter into relations with other states.

According to this theory, state sovereignty does not depend on recognition by other states.

“[States] are nothing more than a product of the human imagination.” - President of Liberland, a semi-autonomous region between Croatia and Serbia, 2018

9. Bitcoin as a sovereign state

Bitcoin clearly fit the billthe four criteria for a declarative theory of statehood. This was obvious to his pioneers, who took possession of most of the virtual land plots available at that time.

Judge for yourself:

Defined Territory:21 million will always be an inviolable border, inwithin which bitcoins can move freely. The historical ledger—or map—of Bitcoin is physically manifested in digital memory, the actual location of which is irrelevant. Bitcoin territory is a rare example of a territory that does not conflict with the borders of neighboring states.
Resident population:There was no official census, but there is also no doubt about the permanent population (hodlers).
Functional Management:Nakamoto consensus and social contract.
Ability to enter into relations with other states:no one is preventing other countries from mining or participating in Bitcoinomics.

The theoretical sovereignty of Bitcoin may be difficult to understand, but the empirical evidence leaves no room for doubt. At a certain stageBitcoin state survived all statesthat existed at the time of his birth.

Asymmetric cryptography ultimately reconfigured the social contract that had defined human societies for millennia:individuals need a government guaranteeing property protection, and a government needs citizens to finance its existence.

10. The Great Migration

In 2009, several hundred people owned Bitcoin property. In 2010, several thousand. In 2011, a million. In 2020 - a billion.

Among the pioneers were drug dealers,criminals and adventurers. It was the same during the period of great geographical discoveries several centuries earlier. These traits do not matter - ultimately, history took into account only the gold they found.

The second wave of immigrants - again, as during the period of colonialism - wasdriven not by curiosity, but by need. Political dissidents, exiled activists anddeprived of rights stepped ahead of the flight of wealth from the states. There was no formal way to transfer property to parallel legal systems, so they did it informally.

You can consider an exampleRoma- one of the largest ethnic groups,never having their own state. They observed such people as the Knights of Malta - whose connection with the Catholic Church gave it the so-calledsovereignty since the early Crusades, - and wondered why they were presented with some of the most beautiful islands in Europe.

The gypsies had property(and defiantly proud of it). They had broad socioeconomic ties, a unique morality, a strong culture, and identity. What separated them from sovereignty?

When the gypsies began to transfer everything they had(money, contracts, history), in Bitcoin, few people paid attention to this. In view of their marginal existence, their taxes were of little importance, few had heard of their commerce, and they were not at all famous for their wealth.

They attracted attention only whenseveral gypsy families were among the richest in Europe. Having mastered the cultivation of rare mushrooms growing in Romanian meadows, they built an empire on Bitcoin that sold hallucinogens, pharmaceutical raw materials and spices to half of the Northern Hemisphere.

They were followed by other peripheral peoples. The long-forgotten, sleeping separatist movements that survived globalization found in cryptocurrency an opportunity for rebirth.

The peoples of Catalonia, Venice, Lombardy, the Basque Country, Flanders, Corsica, Kosovo, Abkhazia, Palestine, Chechnya, Tibet, Dagestan, Kurdistan and Rojavapossessed valuable skills that they learned to apply in bitcoin.

Governments have actively prevented the movement of wealth outside their sphere of influence, but when a significant portion of different communitiesearned a living in Bitcoin, control over the movement of capital became vain.

Tax evasion was used asoccasion for government attacks on isolated bitcoin community. People who were united by a common ethnicity came together to defend themselves. Most dissidents already had home-made weapons and basic military equipment. After the second and third waves of attacks, they began to build fences and traps around their settlements. After the fourth and fifth, they began hiring military mercenaries and private cybersecurity professionals.

Yes, some settlements were invaded,annexations or were cut off from natural resources such as water. Dissidents gave officials impressive bribes in cryptocurrency to reach an agreement, and in some cases moved elsewhere.

If there weren’t corrupt officials, then,perhaps a witch hunt would succeed. But if there were no opportunities for corruption in governments, then politicians would have little motivation to protect the ruling system.

Bitcoin did not win the war on any particular battlegrounds or in events-rich places. He won the war in a cunning, distributed way.

The influence of gypsies, for example, spread likeepidemic. They could be chased, but impossible to strangle. They could be sent to prison, but the rich bought them. They could be denied public services and sanctioned, but all this no longer mattered.

Their mushrooms grew almost everywhere, only they knew best how to hide and look for them. Nobody would burn all the forests and meadows of Western Europe.

The wealth of the gypsies was their own, and no one could confiscate it. In addition, they composed excellent music, and their ability to learn languages made them great programmers.

There was a moment when governments were thinking about destroying Bitcoin itself.

But like mushrooms, it grew quickly. It could beeither turn off the electricitythroughout the country, orcome to terms.

When the authorities realized this, there was no other effective way to stop the warlike cauldron boiling right under their nose.

Bitcoin has quietly recruited a huge armybest-in-class machines, exponentially increased energy consumption and gave a big middle finger to the inert ideologists and old-fashioned statists who chose to denytechnological spirit of the time.

11. Pax Bitcoiniana

Bitcoin marked the beginning of a new era of great discoveries - intangible.

His virtual land could be eitherbuy, orto earn- but it was impossibleconfiscateas it was in the past.Land expropriation has become mathematically impossible.The best strategy for the colonialists was to befriend the natives rather than attack them.

This does not mean that the revolution was peaceful. This does not happen. After the appearance of Bitcoin, states conducted mass propaganda and sponsored private counterfeiters who promised cash gifts and free freedom.

Bitcoin had no public relations department. But the billionaires on his side certainly financed a successful counter-propaganda.

Governments advertisedSmart money, tailored to your needs and preferences, in the spirit of “bread and circuses”. Then they imposed limits on existing data, memory, contacts - in factdigital slaveryimposed with the help of technological oligarchs.

Bitcoiners focused on survival. They understood that the only winning move was not to participate in the old politics.

Because Bitcoin's Politics Are Astonishingly Simple(don't break the rules; come and go whenever you want), individuals and organizations ultimately accepted the need to compete for the provision of better rules, social environments and conditions in general for those they wanted to see nearby.

The cipherpunk's vision of a moving archipelago in the network gradually materialized.

The war began to decline:in a free market for money, few were willing to bear the risks and consequences. Generalfaith in society as a zero-sum game has significantly weakened (she was always associated with a low level of civil liberties and high militarization). After a dark transition, commerce between the citadels began to flourish under the protection of all those who lived nearby physical trade routes.

Temporary preference collapsed:people were now able to “choose” how long they wanted to live, and they knew that their property would outlive them. Savings have reached historic levels.“You really don’t own bitcoins,” the popular proverb said, “and you save them for the next generation.”

Democracies did not disappear at all: those that survived were simply forced to adhere to responsibility, consistency, and optimization commensurate with the alternative political and economic systems that now competed with them for human capital.

Common property was partially preserved in those communities where successful economic experiments were carried out with it. Some taboos persisted where people considered them appropriate(cryonics is still banned in some conservative strongholds). The key cultural difference between modern times and pre-Bitcoin times is freedomentry and exitfrom social contracts.

Politics has become a rule market. Morality separated from politics.

Bitcoin turned out to benot just money, but neutralplatform for money.Not global hegemonyandplatform for local sovereignty.

It would be too presumptuous to say thatBitcoin already successful. At the moment, if we consider the long term, this phenomenon is still in its infancy and can be crushed by unforeseen threats.

But, as cryptographer Ralph Merkle once so aptly pointed out, the question is not whether"Will success be achieved [in rebooting the world order]."

It will take more than one generation to materialize a satisfactory answer.

The question - the real choice that people make over and over - is whether they prefer to be in the control group or in the experimental one.

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