The function of the government in a world dominated by Bitcoin
Even in a world highly dominated by voluntary, transactional, and cooperative human interactions – a feature of a hyperbitcoinized environment, elements of coercion and force will not be completely absent. Some individuals will still opt to use force to assert their perspective, ideally because it’s feasible and a convenient pathway. Additionally, given that violence is inherent in our nature driven by animalistic instincts, as long as humans reside on earth, violence will remain present. This essentially means that efforts to organize, legitimize, and regulate violence will persist as long as violence remains. This concept underscores the likely presence of states or authority bodies that serve as a control mechanism and power consolidation medium among individuals.
The state has developed through a variety of circumstances, be it through a social contract among equals, imposition via annexation or invasion, or emergence from an unruly “every man for himself” environment where the most powerful takes command. This evolution has taken many forms—from tribal societies to nation-states to empires— all maintained by a range of political systems, including monocracy, oligarchy, democracy, amongst others.
Indeed, there are many common aspects between diplomatic and trade negotiations. One involves discussions between nations and agreements, while the other involves contracts. Similar to how traders finalize contracts even in the absence of trust, treaties get certified even when states do not trust each other. Hence, a certain level of trust is crucial, be it in private economic transactions or political-diplomatic relationships.
In this hypothetical scenario of numerous small independent nations, vigorous commerce and comparative international disorder, there would be a surge in diplomatic actions as well as blossoming bilateral and multilateral partnerships. It is precisely in this context that the Bitcoin network once again becomes relevant. Bitcoin’s layer 1 could serve as an excellent platform for these nations to officially approve and store their agreements and treaties.
Source: bitcoinmagazine.com
In a worldwide Bitcoin system, a ‘new state’ will be devoid of vast monetary control, significantly reducing its ability to amass debts and manipulate money. As a result, it will be compelled to reduce in scale and scope, reverting to fundamental functions such as legislating, adjudicating, ensuring security, and providing defense. Ideally, it would resemble the minimalist states preferred by minarchists, adopted voluntarily by citizens and built on mutual consent. The introduction of Bitcoin will surely not eliminate envisioned smaller units similar to city-states, and compact nation-states built around religious, linguistic, ethnic, and moral identities.
Furthermore, the expense associated with transactions on Bitcoin’s primary layer can enhance the significance and worth of contracts relative to the present. Parties that have agreed upon this platform could resemble positional commodities. Contemplating the potential of building tree structures for ‘smart-agreements’ on ensuing layers, reliant on events and transactions taking place on the main blockchain, this presents versatility and broadens alternatives and capabilities for existing diplomatic agreements. This broadening could render them highly intricate, interactive, efficient, and adaptable to an extremely fragmented and intricate international political system.
Max Weber penned his notable essay, “Economy and Society,” over a century ago, where he stated that the state would perpetually exercise legal intimidation and force as its unique and distinguishing form of action. This is fundamentally because it seeks to be the sole user of power within its boundaries, and does not acknowledge any superior power externally.
The future of diplomatic relations using blockchain technology.
Employing Bitcoin’s distributed ledger for recording and storing international treaties and agreements affords several benefits such as visibility, tractability, permanence, impartiality, expensiveness, and programmability. This technology has the potential to transform the way international agreements are crafted, administered, updated, and overseen, providing enhanced security, openness, and trust among the participating parties. These enhancements in turn foster cooperative behaviors, as informed by game theory, lowering the likelihood of conflicts between states and optimizing gains for all participants in the future global relations system.
In a globally politically fragmented and decentralized society compared to what we have now, it is fairly logical for newly established nations to opt to establish and maintain legally binding contracts on the Bitcoin blockchain platform. This preference hinges on every financial transaction’s ‘trust’ in this blockchain’s advanced levels of security and its code’s inviolability, which is ensured by an unprecedented amount of energy and the biggest ever computer network. But what is the method to do so?
Advancements in technology have made, and will continue to make, communication easier and contribute to solving the prisoner’s dilemma, transforming widespread trade into a preferable alternative to warfare. However, we should not anticipate the ceaseless peace that Kant hypothesized. Interstate conflict could become less common and considered as a final option in such circumstances, but it cannot be entirely removed from the list of likely scenarios. Some societies might still choose to employ forceful means to attain their objectives, which could potentially lead to warfare, at the detriment of their neighbours. Nonetheless, the infrequent nature of these events is likely to lead to less bloodshed and resource expenditure than we currently experience. This is due to the reduced capability and economic strength of the emerging state and the prevailing interest in peaceful trade, coupled with vivid recollections of the distress of war in our time.
- The ordinal theory: Establish a unique standard for digital signatures that come from wallets/public keys associated with sovereign states. Create an official procedure for the verification, recording, and modification of international treaties on layer 1, that is universally accepted based on the agreement criterion of network nodes and traditional law among sovereign nations.
This anticipated course implies a world view that mirrors previous political instances such as the city-states of medieval Italy, pre-imperial states of ancient China, the poleis of Greece in the sixth-century BC, and the nineteenth-century American West. The hope is for a lesser extent of political violence in contrast to these old examples, owing to a substantially greater average material prosperity. Technological advancements that yield a plethora of goods will bring about this result. This helps curb aggressive human tendencies incited by lack of resources and provides a level of trade and information interconnectedness that’s unparalleled in comparison to historical standards.
Bitcoin will bring about a radical transformation in politics, but it won’t substitute it. Even if Bitcoin becomes the focal point of a new monetary system, emerging from the collapse of the existing fiat system, in what’s termed as hyperbitcoinization, the state would still continue to exercise control over international relations. It would emerge stronger from the collapse of its earlier forms, similar to a phoenix rising from its ashes.
Bitcoin will undoubtedly induce various unforeseen transitions within the state. These alterations, whilst currently difficult to predict, will likely pose considerable obstacles and diminishments from its current condition, extending to alterations in geographical influence, resources, skills, and aspirations. However, contrary to the wishes of anarcho-capitalists and absolute libertarians, the state’s role as a societal institution will not entirely disappear.
Using Bitcoin’s first layer as the foundational element of the future global monetary system holds immense symbolic importance. This platform offers several practical benefits for recording global treaties due to its inherent features such as transparency, being able to be traced and monitored, unchangeability, a timestamp mechanism providing a unique date for every transaction, and objectivity – a trait due to it being a public good that is accessible to all and owned by no one, therefore it’s free from potential influence.
