Bitcoin breaks that – Political fragmentation versus decentralized collectivity

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The Greek polis – a city-state – is considered by most historians to be the prototype of the modern structure of Western society. As a closed city-state, each polis would have its own political system, its economy, its army, its local political weight and its relations with its neighbors.

Most of the Greek city-states like Athens, Mycenae and Sparta were virtually always at war with each other and thereafter, this is how the fractured political landscape of ancient Greece formed.

The relentless internal squabbles, fierce rivalries, growing and ever more bitter hawkish rhetoric directed at both adversaries and so-called allies that we see today across the socio-political spectrum look a lot like these pre-conditions. modern.

With the United States increasingly divided by interracial and bipartisan conflicts, and the European Union bordering on authoritarianism, it is becoming evident that new instruments of social governance and leverage over the elites are needed to prevent the world from falling. sink into a conflict of global proportions. .

The advent of such a populous means of social governance may be promising, as decentralized currencies prove to be one of the most powerful disruptive forces feared by governments and their financial vassals.

In 2021, we saw Bitcoin start to impact the political sphere and encroach on the narrative more than WikiLeaks. The strong resistance that Bitcoin is encountering from all layers of governance is proof of its growing power.

Digitization as a path to genuine democratization

While most of the attention is paid to crypto as an asset class that is gaining ground against the backdrop of a larger macroeconomic process driven by the threat of real inflation, hypernumerization and d In general social disorientation, less attention is paid to political processes which are likely to proliferate in the years to come. The more Bitcoin and unlicensed networks take hold, the more influence and attention will be given to libertarian principles like decentralization.

The Republic of El Salvador, a small nation in Central America, proved to be the state with the most political will and vision when it announced the adoption of Bitcoin as a legal payment method in September 2021. President Nayib Bukele later announced to the Latin American Bitcoin and Blockchain Conference with his plans to build Bitcoin City in the eastern region of the country of La Union.

Bitcoin City is likely to become a tax haven for wealthy crypto investors, as it will be tax exempt except for 10% VAT. The construction of Bitcoin City is to be funded by $ 1 billion in Bitcoin bonds issued on Blockstream.

Bitcoin is an important innovation in terms of the rationalization of power, offering the possibility for countries and communities of the periphery to assert their sovereignty, to reinvent their economy and to engage in new forms of local wealth generation. Game theory suggests that small developing countries will be the first to shape this new paradigm, having recognized its potential to revive economies. Large institutions and economies will be forced to join in as Bitcoin begins to eat away at the status quo.

Back to polis

While Bitcoin plays a central role in the arena of decentralization as a model of virtue and role model, there is room for innovation above Bitcoin that enables more utility and scalability of applications. more localized.

The Lightning Network is a well-known example of improving the Bitcoin network as a layer two payment solution. It is intended to enable fast transactions between participating nodes and is designed to solve the scalability issue. Projects like Stacks are also gaining traction. Designed as a blockchain linked to Bitcoin by its consensus mechanism, Stacks takes advantage of the security and attractiveness of the Bitcoin network and opens up new opportunities for deploying DApp on top of it.

You could argue that the largely fragmented blockchain network space resembles the political landscape of ancient Greece with its many polished city-states. It seems that modern society is beginning to emulate this structure in its method of applying decentralized technologies.

The latest trend in CityCoins is tapping into a demand for self-sovereignty in economic terms. The concept of a CityCoin involves the issuance of cryptocurrencies that allow their holders to support their favorite city while earning a return in Bitcoin and Stacks tokens. Currently, Miami, Austin and New York appear to be endorsing their own urban cryptocurrencies, made possible by the Stacks protocol, which powers CityCoins.

MiamiCoin (MIA) is the first CityCoin, launched in August, which has generated around $ 21.3 million, proving to be a financial success and encouraging other cities to jump on the trend. Next was NewYorkCityCoin (NYC Coin), with mining officially launching on November 10, 2021. NYCCoin also rewards users through the Stacks protocol and will likely be joined by Austin Coin soon.

Satoshi Nakamoto designed a network that could be borderless, and although they made reference to side chains and other similar projects that would be integrated with Bitcoin, some might say that CityCoins are deviating from the target. initial of Satoshi. It could also be argued that these projects are helping further push different jurisdictions to shift to a crypto-based economy with Bitcoin as the backbone.

Not to their liking

While Blockstream CEO Samson Mow said the founding of Bitcoin City would make El Salvador the world’s financial center, most politicians were less than enthusiastic about Bitcoin’s growing influence on the scene. global.

Hillary Clinton has been tough on the adoption of Bitcoin and its undermining of the US dollar’s waning dominance on the global economic stage. Clinton said,

“What looks like a very interesting and somewhat exotic effort to literally mine new coins in order to trade with them has the potential to undermine currencies, undermine the dollar’s role as a reserve currency, destabilize nations, maybe starting with the small ones, but going much bigger.

The politician did not miss the opportunity to weave the adages and ghosts that haunt his party’s geopolitical line, adding:

“We’re not just looking at states like China or Russia that are manipulating all kinds of technology to their advantage. We are looking at non-state actors – either in concert with States or on their own – destabilize countries, destabilize the dollar as a reserve currency.

El Salvador’s Ambassador to the United States Milena Mayorga proved that small countries have the wisdom to stay focused on the future of their societies when she responded to the multitude of comments following the announcement by President Bukele of Bitcoin City. Mayorga said,

“We have to have the conversation, but we are an independent country, so [the US has] accept our movement and understand that we want to take ourselves to a different level and with a system of definition.

Blinded by the fear of change

Let’s start with these recent words from the President of the European Central Bank, Christine Lagarde.

Christine Lagarde talks about #Bitcoins pic.twitter.com/QhkYM0W3r2

– Dennis Parker (@Xentagz) November 27, 2021

The term gerontocracy is beginning to show its relevance on the global political scene, where innovation and much-needed changes are ignored in favor of lingering old feuds and courses that are no longer viable in the context of progress.

Crypto doesn’t fragment the economy, as Hillary Clinton thinks – IInstead, it offers a more democratic approach to governing a system that is both sclerotic and non-inefficient in light of modern demands and opportunities.

We are on the brink of changes as big as when the world moved away from the gold standard or when the Bretton Woods system was reached after World War II. The coming changes will affect the lifeblood of the global political system – finance – the one and most important leverage that political elites do not want to let go. The times are changing.

Ben Caselin is Head of Research and Strategy at AAX, the first crypto exchange to be powered by LSEG technology from the London Stock Exchange Group. With a background in creative arts, social research and fintech, Ben develops knowledge about Bitcoin and decentralized finance and provides strategic direction to AAX. He is also an active member of Global Digital Finance (GDF), a leading industry body dedicated to the acceleration and adoption of digital finance.

Featured Image: Shutterstock / GrandeDuc