Cryptocurrencies begin rivaling nation states within 5 years. Not since Hiroshima and Nagasaki fell has humanity witnessed a technology with deeper impact for society.
The Bomb provided sovereignty to any nation who possessed it because direct conflict means risking extinction.
Whereas crypto provides the individual sovereignty with wealth politicians cannot seize. A critical mass of citizenry enamored with it can nullify any State through peaceful secession.
Crypto is a shield against tyranny no matter where it manifests.
Catalyst:
Maybe Singapore goes first adding Bitcoin to their currency reserves. Or perhaps a sovereign wealth fund buys it. Or maybe Bitcoin ETFs come online in financial centers. Any of these catalysts will mark the beginning of Bitcoin as a reserve currency because each event makes the others more likely.
Yet it is the independence movements which will bend reality. Within two years the next Catalonia wishing to leave Spain can do so by switching to a mature crypto ecosystem. Payments and taxes done solely in crypto bypass the national currency, and with it their influence within the region proclaiming autonomy.
The State may try to crack down but without being able to seize financial assets remotely there is no soft way to stop independence from happening. Force does not scale. Nor is door to door violence tolerable in a social media world.
Even today, Venezuelans could pursue a similar option. The liberty seeking could launch their own cryptocurrency. Airdrop the local population, and commit to making it the new government currency.
Then with exchange listings allow speculators to help finance the rebuilding of Venezuela, and nullification of a dictator. (Electricity issues would be a sticking point)
Once an independence movement is successful the world forever changes. Every politician will sense in their bones that if they over reach they will be nullified. Some may try to crack down but it’ll be too late. Satoshi brought fire to man.
Transition:
After the first independence domino falls others will follow suit. While initially these movements will be away from oppressive governments, they will eventually just become popular.
Yet, escape volatility arrives when the global banking system either implodes again, or inflation gets out of control. As populations can transition to maturing crypto for a sound monetary system. A system not dominated by a handful of banks, nor controlled by the whims of a political class.
Where this walk through the unknown woods leads is a post nation state world, one in which there are numerous city-states. Perhaps something like antiquity’s Greek city-states. One can envision a world where independence movements are common, and natural as societies grow, and group interests shift.
Many of these microstates will run their own protocols. A cryptocurrency with a governance system customized for the region. A prototype is already in the wild, Tezos.
Some city-states will use existing crypto reserves the same way countries like Ecuador, Hong Kong, and Panama use the Dollar. There may be dozens of these global reserve cryptocurrencies. Bitcoin is an obvious winner. We may also see ZCash, Ethereum, Tezos, and others not yet launched hit reserve status after being time tested.
You may imagine that a world made up of microstates maybe high friction. Yet Singapore, and Hong Kong demonstrate this is not true. And cryptocurrencies of each region can be seamlessly swapped through permissionless exchange protocols as one travels, and does business.
I imagine within five years we’ll see at least one crypto independence attempt, and Bitcoin reach a multi-trillion dollar valuation. I put the odds of this at a coin flip. The rest will take time to play out.
Satoshi gave humanity a key to unshackle itself, and you are at the precipice.
Enjoy the ride.
- Justin
P.S. Here is the clearest articulation of the potential impact of crypto. https://www.youtube.com/watch?v=IrSn3zx2GbM
