🗺 Pax Bitcoiniana: After The Last Country on Earth
"Islands in the web" and the 21st century nation-state.
As an amusing thought experiment, imagine that Bitcoin gobbles not only all of the money in the world, but also all of the countries.
It surely won't happen overnight. Bitcoin's economical paradigm is abstract enough for most to grasp - its political effect is an even harder pill to swallow.
As I won't be here 150 years from now, the words below are jot down for purely historical purposes. If you're reading from the future, let this be your account of how it all began.
🌎 1. Mundi Map: Consolidation & Fragmentation
The early 2000s were times of “cartographical stasis”.
From 2000 to 2019, only 3 new countries formally entered the UN official list: Montenegro, South Sudan and East Timor (Kosovo tried hard, but was never "allowed in” by Russia).
The planet felt anxious. But its borders were unsettlingly inert.
In contrast, the end of the previous century had brought an ebullition of newborn nations. The most prominent example were probably former members of the USSR — a brief, anomalously centralised nucleus of power — , but similar fragmentation also happened in the "third world". Of the countries that made up Asia, for example, more than ¾ (32) have had their independence declared between 1900 and 2000.
In the book “Invisible Countries”, author Joshua Keating explored the apparent "lull in the upheaval of borders" that had been the case for the first twenty years of the 2000s. That was not at all a long term trend.
This chart of the nº of sovereign states in Europe may help you zoom out:
The Old Continent between 1000 and 2000 was not at all one of stable frontiers. Some centuries brought consolidation (red line going down); others, fragmentation (red line going up).
Politics were a very big deal at the time. And before sovereign money, politics meant something strikingly different: not a laymen hobby, but an elite sport. Not a game of incentives, but an arena for disputes of power.
Politicians drove the world's labour through an entertaining theatre of moneymaking that fed back the parasitic structure they inhabited.
Cognitive dissonance was such that some countries renamed "taxpayer" (like, literally, the word) to "contributor" — and nobody raised a hand.
People were taught (and obeyed) to serve their armies and honour their flags; hoard their fiat currencies; save for retirement on 100-year “sovereign” bonds.
Yet inter-national war had been wastefully unproductive since the advent of DIY military equipment; the average fiat currency lasted only 27 years; and the median lifespan for countries was hardly above 50 years, few ever surpassing the 100-milestone.
"Ignorance is strength", an old fictionist wrote. For a long time, indeed it was.
The mundi map was about to be torn apart. Almost nobody was watching.
👣 2. Technology & War: Footprints on the Map
There was ever only one means of lastingly redrawing borders: war.
War came in two flavours. Either born within sovereign nations, or between them.
Inter-national unrest (which yielded the greatest conflicts) led to a consolidation effect in the nº of states (imperialism annexing conquered territories).
Intra-national unrest (which only thrived in the absence of major hurdles with other state powers, or relative "peace") led to fragmentation (de-colonisation and independences).
War was omnipotent, but as you'd expect, advantage in war could be conquered by diverse means. Technology was the main one.
The discovery of powder gave China a 400 year head start on the modern arms race, before that knowledge travelled to the Middle East. The Renaissance and Industrial Revolution kept Europe at the top of the colonialist food chain for half a millenium. Mastery in nuclear sciences and cryptography were decisive in the victory of WW2.
Thereon, one might have the impression that war waned. What happened was that, in the 20th century, war started to become preemptive.
🏰 3. State, Property & Countries as Bellic Unions
"Countries" were a short lived phenomenon, lasting no more than a full millenium. They worked like bellic unions. Groups of people united to defend their property rights over whatever they considered under their sovereignty.
Whoever didn't want to engage in the military or the law-making apparatus paid a fee on basically everything, so that third parties were financed to do such for them.
Land had always been at the top of the priority list of things to be defended. In fact, ages ago, property referred almost exclusively to land. Over time, the concept of property expanded. People started to assign and track the possession of abstract things, like publishing rights and ideas.
Property's ultimate, moral meaning — history had been painfully teaching — was a deeper debate, that would hardly ever be subject to consensus.
Plato, likely inspired by Spartans, was against private property in most of its manifestations, including the guard of children. He saw property as a corrupt force that fed envy and violence.
Aristotle, his pupil, held orthogonal thoughts. He rejected the argument that a common property system would eliminate vices, since people tend to fight more for what they share than for stuff they privately own. Aristotle saw private property as crucial to progress, pointing out we are only incentivised to work hard for stuff that's truly ours.
Throughout ~2500 years, the Aristotelian thesis was corroborated. Nations that failed to protect private property of their citizens were inevitably eliminated, annexed or broken apart. Nations that did it well generally persisted long enough to make a dent in mankind’s path
Success in protecting property was strongly correlated with military power. Not that the biggest armies also led to the most enduring nations — actually, there seemed to be a fine balance in the relationship between militarisation and longevity, when it came to nation-states.
Most strived to reach the top of the ranks, though, eyeing a very special privilege: to impose a monetary standard on the rest of the world.
Over history, countries that had strongest armies have consistently made their national money the global reserve currency.
The trend started with the Silver Drachma, in ancient Athens. Next up was Rome, with the Gold Aureus and later the Silver Denarius. The Islamic Dinar occupied the throne during the apex of the Byzantine empire. Then came the Fiorino, from Florence; followed in the 15th century by the Ducato, of Venice. Later the Dutch Guilder, the British Pound Sterling, and finally, after World War II, the US dollar.
The intertwined history of private property, nation-states and war is self-evident: property required violence to be enforced, which made states — monopolists of violence — the best ones around in doing so.
🔐 4. Asymmetric Crypto & Immutable Memories: Enter the New State
"Countries" ceased to exist because they were obsoleted once private property was emancipated from the nation-state.
Bitcoin was the first technology to allow for the ownership and exchange of economic value in spite of any government-backed jurisdiction.
- Thou shall agree on the rules;
- Thou shall be free to join and leave.
That was the politics of Bitcoin in a nutshell.
Nobody ruled. Everybody ruled.
Thousands of machines competed to secure the network; the outcome was a stable, immutable, always available State, for anyone to write history on.
Bitcoin mastered preemptive war by protecting private property allodially — something unseen before on scale. Plato and Aristotle might not have disagreed on the nature of property had Bitcoin arisen in ancient Greece.
Bitcoin's State took time to earn a capital letter because its novelty was rooted in a once-obscure field of knowledge that was palpable to very few.
A discipline born within war, and that forever changed it.
⚔ 5. Cypherpunk Ethnicity
"Cryptography" is the science of protecting and deciphering secrets.
Early on, advances in cryptography were mainly motivated by warfare. The WW2 (in the 1940s) ended basically because one side managed to crack and spy on the communications of the other.
The Axis (who lost) opened wide the vulnerability of symmetric cryptography — on which a same secret encoded and decoded a message.
The Allies (who won) laid the ground for the discovery of asymmetric cryptography, in 1976. Now, one secret could be used for encoding a message, while another, privately held, for decoding it. Math ensured both were created (owned) by the same agent, even though one could be kept hidden forever.
If a participant of the scheme fully embraced his custodial responsibility, the implications were tremendous.
The piece of information that attributed property was not issued, stamped or held by a third party: it was allodially yours, and fitted inside your mind.
The "sacred guardians of property" took notice. That s*** was a threat to their raison d'être.
In 1995, the US government restricted citizens from exporting cryptographic software without due licenses, classifying such products as a form of munition. The first popular version of an asymmetric key software, PGP (Pretty Good Privacy), was "ilegal" outside of America.
These early acts of cyber activism were a feat of the cypherpunks. The inventor of PGP would become a notable member of theirs. He'd also mentor figures that'd become key to Bitcoin's development.
The cypherpunks were a peculiar ethnic group, who took great risks to disseminate the technology and ensure that the average individual could have access to tools as powerful as those of the military.
Many people mistake ethnicity for population or race (which the human species has not). An ethnic group is, roughly, a set of people that share a common origin, linguistic and cultural affinities; that may or may not share physical territory.
In retrospective, the cypherpunks seemed to have a clear vision for the future of politics. Remember I said war was the only way to ever lastingly redraw borders?
Theirs was ethereal from start.
🏴 6. Islands in the Web, Free Enclaves & Temporary Autonomous Zones
An influential character in Cypherpunk literature is Hakim Bey². In 1985, Bey published Temporary Autonomous Zones (TAZ).
Temporary Autonomous Zones are the manifestation of pirate culture (semi-nomad, obscure, of ephemeral traces) in the digital realm.
Bey researched enclaves he dubbed "pirate utopias" throughout history, from medieval assassins to anarchic sufis. For him, "islands in the web" (or "free enclaves") are inevitable symptoms of decadent political regimes in economies that are more and more informatised.
Non-permissioned communication technologies, Bey presumed, would allow for an entire mundi map of autonomous zones.
A TAZ is a place where revolution has indeed taken place, even if briefly, or for a few only. The author doesn't define the concept to avoid imposing it a political dogma.
“In the end, a TAZ is self evident. If the term got used, it'd be comprehended easily… comprehended in action”. — Hakim Bey, 1985
💉 7. People: The Running Blood of Nations
Fundamentally, States are made of people. When people are arranged properly, the State is healthy. When they’re in disorder, the State is unhealthy. Pretty much like organisms and molecules.
In 2019, a semiautonomous island in the East, that happened to conglomerate a good chunk of the planet’s money, erupted in social crisis.
The people of Hong Kong — known for its civilised culture — had their sovereignty subjugated by a neighbouring country, and were not properly protected by those to whom they paid taxes.
First a few thousands came to the streets. Soon, a whole quarter of the population was joining the protests.
Against severe militar oppression, civilians devised their own sign language; communicated over uncensorable mesh networks; and blurred police's sights on public spaces with cheap laser pens distributed en masse.
For the first time, images of street cameras being depredated by angry mobs were broadcast all over the world (not through sci-fi thrillers, but actual news). Anti surveillance makeup went from catwalk fetiche to streetwear in a matter of months. Machine-confusing clothes were embraced by celebrities, gradually mining the public surveillance apparatus.
Warfare was on the cusp of being fully digitised.
Online, regardless of geography, anyone had the right be a soldier.
“As cybercommerce begins, it will lead inevitably to cybermoney. This new form of money will reset the odds, reducing the capacity of the world’s nation states to determine who becomes a Sovereign Individual” — Davidson & Rees-Mogg, The Sovereign Individual, 1997.
🗺 8. What did it mean "to be a country"?
For a long time, the Treaty of Westphalia established what it meant to be a Sovereign State. It ended 30 years of war in Central Europe, and served a foundational role on the field of International Law.
Two key points. First: the agents of geopolitics shall be the nation-states, rooted in their own sovereignty. Second: regardlessly of any differences among them, their sovereignties shall be equivalent in the face of International Law.
The Treaty of Westphalia was utterly paradoxical. All sovereignties are equal in face of International Law. But if one does something that "International Law" dislikes, "International Law" shall punish it.
“International Law”, in practice, was a bunch of very closely monitored supranational organs like the UN, WTO and IMF.
The funny thing is that philosophy and law had already agreed on a decent definition of State — it was just irrelevant, since all States were still confined within borders, borders were constantly revised by war, and war trumped everything else.
The declaratory theory of the State, as it was called, concluded States should become an agent in International Law if they had:
- a defined territory;
- a permanent population;
- a functional form of governance;
- the ability to enter relationships with other States.
According to it, the sovereignty of a State in-depended from the recognition from other States.
"[Countries are] no more than a product of people's imagination" — president of Liberland, a semiautonomous island between Croatia and Serbia, 2018
👑 9. Bitcoin as a Sovereign State
Bitcoin obviously attended to all 4 requisites of the declaratory theory of the State. This was crystal clear for firstcomers, who took possession of most of the virtual land parcels available at the time.
Reason yourself, from first principles:
- To have a defined territory: 21M was always the uncrossable frontier— within it, bitcoin may be moved freely. The historical registry — or map — of Bitcoin is manifested physically in digital memory, whose actual location is irrelevant. Bitcoin's territory is a rare case of one that does not conflict with borders of neighbouring countries.
- To have a permanent population: there was never an official census, but never an official doubt on a permanent population (hodlers) too.
- To have a functional government: Nakamoto consensus and the social contract.
- To be able to enter relationships with other States: nobody ever impeded other States from trying to mine or engage in Bitcoinomics.
Bitcoin's theoretical sovereignty may have been a tough pill to swallow, but empirical evidence left no room for doubt. At some point, The State of Bitcoin outlived all the countries that existed when it was conceived.
Asymmetric cryptography ended up reconfiguring the social contract that defined human societies for thousands of years: individuals need a government to guarantee the protection of property, and the government needs them to finance its survival.
⚖ 10. The Great Migration
In 2009, few hundreds of people had any property on Bitcoin. In 2010, small thousands. In 2011, the first million. In 2020, the first billion.
The pioneers were traffickers, criminals and opportunist adventurers. No different from the vanguardists of the Great Navigations, centuries before. These traits didn't matter — in the end, history only took note of the gold they found.
The second wave of immigrants — again, like in old-time colonialism — was necessity-driven, rather than curiosity-led. Political dissidents, exiled activists and populations deprived of rights drove an exodus of wealth out of nation-states. There was no way of formally moving their property to parallel law-systems, hence informally they did so.
Take the case of the gipsies — one of the largest ethnicities to never have its own country. They saw people like the knights of the Military Order of Malta — whose ties to Catholicism had granted them so-called sovereignty since the early Crusades — and wondered why the hell these types had been gifted some of the most beautiful islands in Europe.
The gipsies had property (and were ostentatiously proud of it). They had widespread socioeconomical relationships, a unique moral ruleset, strong culture, identity. What separated them from sovereignty?
When gipsies started moving all they had (money, contracts, history) to Bitcoin, few noticed. Living on the margins, their taxes were barely accounted for; their commerce, hardly heard of; their means, fair from well known.
Attention was drawn only as a handful of gipsy families rose the ranks of the wealthiest in Europe. Having mastered the crop of rare mushrooms in Romanian pastures, they built a Bitcoin empire selling hallucinogenics, pharmaceutical raw material and spices to half of the Northern Hemisphere.
Other peripheral populations followed suit. Long-forgotten, latent secessionist movements that had survived globalisation found in crypto a way to ressurge.
The people of Catalunya, Veneto, Lombardia, Basque Country, Flandres, Corsega, Kosovo, Abkhazia, Palestina, Chechenia, Tibet, Daguestan, Curdistan and Rojava all had valuable skills they eventually learned to leverage on Bitcoin.
Governments proactively curbed individuals from migrating wealth away from their purview, but when a good portion of a given community was earning a living on Bitcoin, capital controls became a frugal exercise.
Tax faults were used as an excuse for state-sponsored attacks on marginalised bitcoiner communities. Those who shared a common ethnicity got closer together in defense. Most dissidents already had DIY guns and entry-level military equipment. After the 2nd and 3rd wave of attacks, they started to build fences and traps around their settlements. After the 4th and 5th, they begun to hire mercenaries and private cybersecurity contractors.
Yes, some of these settlements were invaded, annexed or cut off natural resources, like running water. Dissidents would lobby officials with hefty crypto-bribes to negotiate an agreement, and, in some cases, move on to reassemble elsewhere.
If no government employee was corrupt, maybe the witch hunt could've worked out. But if there was no more room for corruption in governments, politicians would have little incentives to keep defending the ruling system, at all.
Bitcoin didn't win the war in specific battlefields or eventful spots. It won the war in a sneaky fashion, distributed.
The gipsies' influence, for instance, spread like an epidemic. They could be prosecuted, but never extinguished. They could be put in jail, but the magnates would bail them out. They could have public services denied and sanctions imposed, but none mattered anymore.
Their shrooms grew pretty much anywhere, it was just that they knew how to hide and spot them like nobody. Burning down all of Western Europe's forests and fields wasn't really an option.
The gipsies' fortune was allodial; their money, unconfiscatable. Besides, their music was awesome, and a polyglot inclination made them great programmers.
At some point, to be frank, Governments did consider "burning down" Bitcoin itself.
But, just like the shrooms, it spread like a plague. Either you were willing to cut off electricity on a country-level, or you were willing to live with it.
When those in power realised it, there was no more viable path to stop the bellic cauldron that had brewed right under their noses.
Furtively, Bitcoin had recruited a massive army of best-in-class machines; was drawing energy exponentially; and showing off a big middle finger to inert ideologies & antiquated statists that chose to reject the technological zeitgeist.
🤝 11. Pax Bitcoiniana
Bitcoin sparkled a new era of great navigations; not onto the sea, but onto the ether.
Its virtual land could either be bought or earned — never confiscated, as it’d been the norm in history. Extrativism was now mathematically impossible. The colonialists’ best bet was to befriend — not attack — the natives.
That's not to say revolution was peaceful. It never is.
During the emergence of Bitcoin, states mass-produced propaganda and sponsored private faux-monies with promises of airdrops and costless freedom.
Governments advertised “smart money”, adaptable to your needs and preferences, panis-et-circensis-like. Then placed IP restrictions on individuals’ existing data, memories, connections — effectively a form of digital slavery enforced with the help of tech oligarchs.
Bitcoiners remained focused on survival. They understood that the only winning move in old politics was not to play.
As politics in Bitcoin is strikingly simple (don’t break the rules; join or leave anytime), individuals and organisations eventually embraced the need to compete in providing the best rulesets, societal environments, and neighbourhoods, generally speaking, to those whom they wanted nearby.
The cypherpunk vision of a fluid archipelago in the web took shape uneventfully.
War waned, indeed: in a free market for money, few were willing to take the risks and consequences. General belief in society as a zero sum game fell drastically (it was always associated with low civil liberties and high militarisation). Commerce between citadels flourished after a dark period of transition, protected by all those who lived nearby physical trade routes.
Time preference plummeted: people could now "choose" how much they wanted to live, and they knew that their properties would outlive them. Saving rates reached historical levels. "You never really own a bitcoin", a saying turned viral, "you merely take care of it for the next generation".
Democracies didn't perish definitively: the ones that survived were just forced to a level of responsibility, coherency and optimisation befitting to the alternative politico-economical systems that now competed with them for human capital.
Partially common property persisted in communities that had successful economic experiments with it. A subset of taboos lasted wherever people deemed them worthy (cryonics is still prohibited in some conservative citadels). The key cultural difference between now and pre-Bitcoin times is the freedom to opt-in and out of collective social contracts as you wish.
Politics became a market for rules. Morals, unbundled from law.
Bitcoin turned not to be merely money, but a neutral platform for monies. Not a global hegemony in itself, but rather a platform for local sovereignties.
It'd be presumptuous to state that Bitcoin has already succeeded. In a long, long term view, it's still an infant phenomenon, prone to be crushed by yet unforeseen threats.
But the question, as cryptographer Ralph Merkle once elegantly noted*, was never “whether this was indeed going to succeed or not [in overhauling the world’s order]”. A decent answer needs generations to crystallise.
The question — the actual choice people make, over and over— is whether they'd rather be in the control group, or in the experimental one.
- How Cryptography Redefines Private Property (Hugo Nguyen).
- Understanding the Ethics of Bitcoin Through the Ideas of 19th Century Thinker George Simmel (David Auerbach).
- Bitcoin Will Be Attacked (Zain Allarakhia).
- What Is It Like to Be a Bitcoin (Nic Carter).
- Who Controls Bitcoin Core (Jameson Lopp).
- To Be a UX Designer For The Law (Peter Van Valkenburgh).
- Property and Ownership (Stanford Encyclopaedia of Philosophy).
- Lessons from International Law: The Global Governance Model & Its Takeaways as Applied to Crypto (Katherine Wu).
- Unpacking Bitcoin’s Social Contract (Hasu).
- Ostracism, Voice and Exit: The Biology Of Social Participation (Roger Masters).
- Big Tech’s problem is Big, not Tech (Cory Doctorow).
- Collectivist Economic Planning (Friedrich A. Hayek).
- The BitLicense Is a Bad Idea That Must Die (Beautyton).
- Exit and Freedom (Nick Szabo).
- Bitcoin's Department of Defense (Anthony Pompliano).
- Inter-State, Intra-State, and Extra-State Wars: A Comprehensive Look at Their Distribution over Time, 1816–1997 (Meredith Sarkees, Frank Wayman & David Singer, 2003).
- The Waning of War is Real (Bethany Lacina & Nils Petter Gleditsch, 2013).
- Bitcoin Miners Beware: Invalid Blocks Need Not Apply (StopAndDecrypt).
- A Most Peaceful Revolution (Nic Carter).
- Data From 30 Countries Show That Belief in a Zero-Sum Game Is Related to Military Expenditure and Low Civil Liberties (Różycka-Tran, Jurek, Olech, Piotrowski & Żemojtel-Piotrowska, 2018).
¹ Hakim Bey/Peter Lamborn Wilson is a controversial figure, who appeared to lean positively towards pedophilia in some occasions. I obviously condemn the attitude and disagree. Most of the thinkers mentioned here have once held morally questionable positions (e.g.: Aristotle "supported" slavery).
² Anthony Smith, an influent thinker in Nationalism, had a straightforward view. He argued a nation-state needed a single ethnic and cultural population to inhabit its frontiers, and the frontiers to coincide with those of the population's presence itself. The narrow definition presumes the existence of a "one-nation-one-state" model. Less than 10% of countries, today, fit such requirement.