Softwar as a Real Threat in a Bitcoin World

E.L. Tankred

Published in

Coinmonks

7 min readAug 30, 2023

or: A Concrete Softwar Scenario: Beyond Bitcoin and Lowery’s Thesis

(Klicke hier für die deutsche Version.)

In this article, I take a look at an interesting discussion between @Blocktrainer, also known as @RomanReher, and @SunnyDecree.

https://www.youtube.com/watch?v=bUWr8hyMeOc

My goal is to shed light on three assumptions made by Roman, which, upon closer examination, prove to be empirically unsustainable. Furthermore, I aim to illustrate the thesis outlined by Lowery in his book with a demonstrable example. I do all of this with the intention of providing both my Bitcoin education heroes and all those interested in this field with an alternative perspective.

“Softwar” by Major Jason P. Lowery: A Look Back

The book “Softwar” by Major Jason P. Lowery caused a stir this year (2023). However, the work gained particular attention on July 27, 2023, when Lowery announced:

„For those asking what’s been going on w/me, I was ordered to take SOFTWAR down & asked to stop talking about the subject publicly. Doesn’t appear on MIT’s library either.

Can’t talk details but things are good & I’m working hard behind the scenes. Appreciate the kind words.“ [1]

Since that time, copies of the book that were already sold have been traded at significant prices on eBay. If you’d like to save the investment of several thousand Euros for a copy and still get an overview of Lowery’s Softwar thesis*, I recommend checking out the book summary by SunnyDecree.

https://www.youtube.com/watch?v=rnFVOxpHvRI

*In short, Lowery argues in his book that in the nature of the target of an attack, the costs of the attack are juxtaposed. For example, honey raiders fear the bees’ stingers, warlords fear castle walls behind which treasures lie, pirates fear warships that safeguard merchant ships, and so on. This projection of power continues to this day, manifesting militarily in ground forces, sailors on warships, or pilots in their fighter planes.

Cooperation versus Hostility: Reassessing Efficiency Trade-offs

In the conversation with SunnyDecree, which takes place at 30:28 minutes, Roman explains that historically, wars have never been efficient. “Every war in human history has cost more than it has brought in” [2, 3].

This observation might apply to wars. However, the focus should not solely be on the extreme case of competition, i.e., war. If we transition from war to a less drastic situation, such as a personal dispute, hostile behavior can indeed appear enticing. For example, the benefit of a violent attack — the loot gained in relation to the costs of the attack — could be disproportionately high. In this context, the private key to another person’s Bitcoin could represent the majority of their wealth, and it’s also easier to transport than any gold bar.

In this regard, Roman underscores at 35:54 minutes that cooperation is always more efficient than hostile behavior. People could come together to confront aggressors. This aligns with Lowery’s thesis that costly attacks can make the target less attractive.

However, what both Roman and Lowery, in my view, do not adequately consider are the opportunity costs associated with defense or legal measures. These could include, for example, missed work time during self-defense or expenses for protective measures. These opportunity costs mean that not every form of hostile behavior can be prevented by the community, as the effort might not justify it. Only Bitcoin’s high security standards provide a natural barrier against such attacks without incurring additional costs.

Yet, as long as the loot appears more lucrative than the effort to access the Bitcoin wallet, people will resort to violence. It is no coincidence that minor financial damages are often not taken to court nowadays. The costs of a legal proceeding often exceed the damages. As long as the issue of opportunity costs remains unsolved, the following questions arise: How much hostile behavior must a cooperative society without central authority tolerate in the future? And is that acceptable?

Wealthy individuals don’t help others more than the poor

Starting at 39:25 minutes, Roman argues that individuals with financial reserves are more willing to help other people [4]. However, this argument cannot be sustained based on facts, as I have explained multiple times before. If you’re interested in the facts, simply read my articles “3 Arguments for Bitcoin, 1 Problem” and “Bitcoin’s Blind Spot.”

This doesn’t mean that wealthy individuals would never help others. It merely illustrates that they often hold their own prosperity closer than the well-being of others. They frequently secure their wealth in a way that it remains preserved even for their descendants 600 years later. Mocetti and Barone provide evidence for this through their analysis of historical tax documents [5].

Not all people are inclined towards harmony

Not all individuals seek harmony. This assumption is often made. Even Roman explains in the video starting at 39:25 minutes that people naturally have a need for harmony. However, this perspective contrasts with many insights from motivational research*. To clarify this contradiction, I would like to draw upon the Zurich Model of Social Motivation by Norbert Bischof. Other motivational researchers arrive at similar conclusions.

*According to Kurt Lewin, human behavior is a function of motivation and situation. Only when the incentive of a situation aligns with the currently dominant motivation can individuals exhibit corresponding motivation. An example of this would be my hunger diverting me from my original goal, such as stacking sats. Instead of buying sats, hunger shifts my attention to the efrigerator. This change in orientation doesn’t even have to be conscious to me.

Bischof’s model divides human motivation into three systems: Security, Excitement, and Autonomy. Through his research, he demonstrates that only one of these three systems dominates within each individual [6].

The yearning for harmony is rooted in the security system, which is considered a relationship motive. On the other hand, the desire for power belongs to the autonomy system. This already indicates that in some individuals, the power motive dominates over the relationship orientation. Therefore, Roman’s argument, which considers only the perspective of one group of individuals — those who act relationally — is limited in its significance. It’s worth examining human behavior from the viewpoints of excitement orientation and autonomy orientation as well. In fact, it’s even imperative to do so in order to envision the future more accurately.

My Softwar Scenario

In his book “Softwar,” Lowery views Bitcoin as a kind of weapon system. However, I wonder if this metaphor truly holds. Its implication is that the core thesis of Softwar is often considered through the technical attributes of Bitcoin, leading to many critical voices.

Nevertheless, my concerns are of a different nature. I assume that under a Bitcoin standard, future conflicts will more likely take the form of economic warfare. In this context, the “weapon system” described by Lowery symbolically represents the amount of Bitcoins each state possesses, as well as the deflationary economic dynamics that Bitcoin brings [7]. From a military standpoint, wealth in the form of Bitcoin is better protected than gold in Fort Knox.

Let’s imagine Bitcoin-rich states extending loans to needy nations, but under certain conditions. Even in a situation of economic deflation, these lenders would insist on full repayment. Bitcoin-rich countries could use these loans to access new markets in the borrower countries. In this scenario, the markets of the borrowers could serve as both cost-effective suppliers and markets for high-quality products. A similar principle is, incidentally, described and criticized by Alex Gladstein in relation to fiat money [8].

But there is a crucial distinction: under a bitcoin standard, there is no possibility of simply expanding the money supply to destabilize the borrower country [8]. Instead, they would have to provide collateral that could be demanded at any time. Similar to the feudal system, ownership — perhaps land — would serve as collateral, which could be seized if needed. Of course, all of this would be in accordance with international treaty law.

This strategy is already being demonstrated by China today. The country invests in the infrastructure of other nations and acquires stakes in companies across various sectors such as energy, finance, and technology to exert influence [9]. Now, replace the acquisition with collateral for lenders, and you can see how they could gain influence in a Bitcoin-dominated world.

Let’s Discover Scenarios Like the US Military Does

I’m not necessarily claiming that the Softwar scenario I’ve outlined will inevitably become reality. Instead, I see it as a potential avenue for future threats known as Softwars. The scenario I’ve presented is meant solely to illustrate a potential pitfall for less developed countries. My hope is that these countries can evade this danger. At the same time, I anticipate the Bitcoin community to generate further scenarios, much like the US military does behind closed doors.

Because our greatest challenges on the path to a better world lie in the yet unknown traps that can be laid out for us. Nobody should inadvertently step into them.

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