Can you imagine a world without war? Pretty difficult as we’ve been at war the last 20+ years and nobody is really sure why. Ask one hundred different people and you’ll get one hundred different answers. I am going to attempt to illustrate how a Bitcoin world would discourage and actually defund wars.
Most wars are fought over money, power, and control. Depending on how far back into the history books you’d like to go you can find countless examples of rulers invading countries/empires to take all their gold. Whether it was Napoleon conquering most of Europe or Hitler invading Poland it was all an attempt to gain more riches and have more power. Upon conquering a new city the conquerer would go straight to the gold reserves. Gold is a centralized money that begs to be stolen - this is why we lock it underground in high security vaults with several guards. Egyptian Pharaohs were mummified with a bunch of gold, only to be looted throughout time. You could literally drop a bomb on a city and then go in and take the gold after the dust settles. Gold is inherently centralizing and incentives conflict.
The good thing with gold though was that when you run out you can no longer finance the war spending…. that went out the window with the introduction of paper (fiat) money. Governments need to pay for war and that is done through bonds (a debt instrument) and taxes. In World War I the Germans took on so much debt to continue fighting that they ended up ruining their currency via hyperinflation.
The way the government is supposed to get its money is from the citizens paying taxes. It then choses where to allocate these funds based on the needs of society. For example, building a new school or bridge. As you can see from the chart below the governments of today spend A LOT more than they make. How is this possible? Rather simple - the government has a monopoly on violence and money. You are forced to pay taxes or you end up in jail. They must be paid in dollars. An easy example to help illustrate this monopoly is the fact that whichever country has the strongest military has the world reserve currency. Also, oil can ONLY be sold in dollars. People who have tried to sell it in anything else are no longer alive. This is called the petrodollar system and is a rabbit hole of its own.
I’ll ask you two questions. 1) If they can just print all this money, why do we still have to pay taxes? 2) Do you have a say in how your federal tax dollars are allocated or does the government know best what the people need?
How does Bitcoin change this?
Bitcoin as a money is pure information. We can carry it around in our heads by memorizing our private keys. These private keys can be split up and stored in different geographic locations. It is not physical. Even if someone puts a gun to your head it doesn’t mean they get access to your Bitcoin. All these reasons deter “war.” War is a lot less likely if the money is not easily confiscated.
Bitcoin defunds the state. Bitcoin is a peer to peer money with no need for a third party. It is the first and only money outside the control of a government. A money for the people and if a government is going to continue to exist they better provide services that the people want! This includes war and I would be willing to bet that is not something the people want to pay for. How many people want to be in Afghanistan and dropping bombs in Syria? War is a product of the nation state over power and control. In a Bitcoin world, if the people don’t want war it is going to be impossible to finance it. People want to see their tax dollars going towards actual good in the community like parks and schools.
Bitcoin will continue to grow as a parallel financial system and in the long run everyone will chose Bitcoin because it is a superior form of money. That being said, Bitcoin is still raw and has a lot of growing to do in terms of user experience, key storage, and accessibility and more. As this system grows and people adopt it, it defunds the state. The demand for Bitcoin grows while the demand for dollars shrinks. This leads the government to print more and further devalue the dollar until it is eventually worth nothing.
Bitcoin removes the control of money from the government and the endless fiat printing machine is no longer able to finance never ending wars. The states/countries that offer the best tax incentives will be the ones that wins in a Bitcoin world.
Removing the control of money from a massive and powerful overarching government is not going to be easy. It is going to cause tremendous pain as the dollar loses value. Bitcoin offers us a peaceful protest against the government and the printing press. It is the life boat and the sooner you realize this the better. In 1984 a famous Austrian economist named Friedrich Hayek said:
This concept may be getting too “in the weeds” on Bitcoin but I promise you it has all the potential in the world. Bitcoin offers hope for a better future and a more peaceful future. The world needs Bitcoin to succeed.