I am sending this message from the year 2025. Things are looking bleak here, and some of you will carry blood on your hands…’
What sounds like the opening to a dystopian novel is in fact a viral Reddit post published in 2014 that sketches a nightmarish vision of Bitcoin displacing fiat money. A future in which land and cryptocurrency are the two main forms of wealth, with society torn asunder with the bitcoin holders fortified in the Citadel.
If you thought the world was hamstrung by inequality in 2014, it’s irredeemably unjust in the near future, if Reddit’s time traveller is to be believed, a consequence of stagnant economic growth (Bitcoin having crushed governments’ tax-raising powers) and the apathy of rich bitcoiners who live off their hoarded crypto wealth.
The apocalyptic story goes like this: the dream of early adopters came true, though their glee soon turned to terror after the collapse of central banks around the world.
At ground zero, it became obvious that anyone who had ever broadcasted their crypto wealth had daubed a target on their backs. In this nightmarish milieu, merciless brigands and shakedown merchants sought out bitcoiners to extort, fiat currency having been displaced by ever-appreciating crypto.
The erosion of the rule of law was swift and internecine violence forced Bitcoiners to head for the hills, armed with a survival kit containing their precious hardware wallets. Guns became a necessity, and contact with Nocoiner friends and family members treacherous due to tapped phones and mistrust. Your own son might kill you for a few satoshis.
Chaos. Civil war. Murders, beatings and torture on an unimaginable scale. For the luckless, an uncertain life circumscribed by lawlessness and fear; for the Bitcoiners who escaped the ruins, a life of grandeur in fortified citadels constructed to repel extortionists and desperate Nocoiners.
‘You believed you were helping the world by eliminating the central banking cartel that governs your economies. However, I have seen where it ends.’
It is a world of haves and have-nots where Bitcoin is king, and wealth and authority concentrates evermore into the hands of the canny citizens and corporations who hodled for dear life; as well as the shady scammers, gangsters, and rogue states (North Korea, Saudi Arabia) who accrued a fortune through a combination of ingenuity and villainy.
‘You believed you were helping the world by eliminating the central banking cartel that governs your economies,’ writes the future-dweller. ‘However, I have seen where it ends.’
This is, of course, just one interpretation – and an extreme one, at that – of a Bitcoin Standard world. But is full civil unrest really the logical endpoint of the road we’ve embarked upon? Will early adopters be the new nobility, with Nocoiners relegated to second-class status and penury; or might the future be a little brighter?
It is true that there can only ever be 21 million bitcoins, 89% of which have already been mined: some coins are inaccessible due to owners passing without leaving behind their private keys, while other sad souls have forgotten or misplaced their seed phrases.
Although every bitcoin is divisible into 100 million satoshis, the fear that there aren’t enough left to go around is shared by many. And yet, we have to be especially pessimistic to endorse the citadel hypothesis.
The maximum number of bitcoin that will ever exist
After all, Bitcoin could engender (and indeed already has engendered) serious societal benefits. In the Citadel scenario, the only real advantage is personal enrichment. But what if governments around the world start turning their abundant stranded and wasted energy resources into appreciable revenue via bitcoin mining?
Mining with stranded gas assets would not only reduce reliance on a debasing fiat currency, but also minimize environmental damage by eliminating overproduction – since miners are always searching for cheap energy.
The resultant wealth, if wielded by a suitably progressive or benevolent state/national government, could fund improvements in education, health, infrastructure, and countless other areas of life as we know it.
For all the criticism of Bitcoin’s energy consumption, the asset ultimately represents the ability to convert energy – both technological and physical – into a scarce monetary good that cannot be censored, confiscated or copied, and this fact alone could set the stage for improvements in all areas of life.
Bitcoin is the antithesis of fiat airdropped into the accounts of high time-preference individuals. Instead, it rewards low time-preference citizens who are compensated for resisting gratification in the here and now.
If history has taught us anything, it’s that hard money has always been a key driver of growth: productivity is a natural corollary of a society that adheres to a sound monetary standard, with citizens safe in the knowledge that their wealth won’t depreciate over time.
A value-driven Bitcoin standard future, governed by a politically-neutral, provably scarce asset, could well inspire the next great epoch.
The best example of this is the Gold Standard and La Belle Epoque, during which many of our most consequential advancements were made, be they technological, architectural, musical, economic, or medical.
A value-driven Bitcoin standard future, governed by a politically-neutral, provably scarce asset, could well inspire the next great epoch. With increased purchase power and rising opportunity costs, we will build better roads, construct grander buildings, and create glorious public spaces. Even discourse will flourish with the death of divisive, debt-backed fiat.
It’s almost inevitable that crypto will upend multiple industries – but that mightn’t be a bad thing: it will cause people to build back better (to borrow a sinisterly ubiquitous phrase). To build products and services that are decentralized, secure, private, efficient, and accessible right out the gates.
The abandonment of unfettered money printing won’t solve our problems overnight, and a phoenix won’t arise from the ashes: the phoenix is already alive, fluttering and embedded in the public consciousness. It’s Bitcoin.
It’s the year 2025. Things are looking pretty good.