While governments around the world are currently thinking about how they're going to regulate Bitcoin exchanges, there is a larger debate coming that could actually have implications for the future of humanity as we know it. This may sound a bit hyperbolic right now, but it's important to think clearly about what the upcoming debate on whether Bitcoin should be banned will really mean for everyone. I've written about how banning Bitcoin would be both impractical and antithetical to a free society, but that won't stop some governments from doing it. Even Gavin Andresen, the lead developer for Bitcoin, talked about how Bitcoin could probably only be regulated in a place like North Korea during his recent appearance at the Council on Foreign Relations. Once we get past the phase of early adoption and at least a small percentage of the population is transacting in bitcoins without ever converting back to dollars, euros, or other fiat currencies, it will be practically impossible to track the transactions on the Bitcoin network. Politicians, at least in the United States, are dedicated to stomping out money laundering, but this becomes impossible in a Bitcoin world. The only way to stop Bitcoin and other related technologies, such as the Open Transactions Bazaar, will be to instill a tyrannical government that watches everything people do on their laptops, mobile phones, and desktop computers.
Government Becomes a Black and White Argument
There are massive differences between the governments in the United States and North Korea, and the varying degree as to how much government we allow in our lives has always been sort of a gray area. Should we have the government tell us what we can put into our bodies? Should we only have the government ban certain substances? While there are definitely anarcho-capitalists and communists active in world politics today, the general consensus seems to be that the best form of governance is the centrist approach. That mix of capitalism and socialism is what creates the gray area of modern government in developed nations.
Many of the technologies in development today, especially the ones related to the idea of decentralized consensus based on a blockchain, are going to completely destroy "gray area governance", which is where most governments find themselves right now. Instead of choosing which aspects of our lives could use a more Libertarian approach or which parts of our lives should probably be regulated or controlled by government, the world is going to face a situation where the government is either Libertarian or Authoritarian across the board. If money laundering isn't allowed to basically become legal through Bitcoin, then you'll always have someone looking over your shoulder to make sure you aren't connecting to the Bitcoin network. Perhaps every shipment sent through the mail will be subject to random searches to make sure there aren't any drugs in there from the new version of Silk Road. How will a government collect taxes if everyone gets paid in bitcoins and works as a freelancer or for a distributed autonomous company? People usually don't mind paying their "fair share", but they may decide that 10% or less of their income is enough to give to the government. To complete many of the basic tasks thought to be required of politicians and regulators, these institutions are going to have to infringe on personal freedoms at a level that has never been seen by most of the younger generation in developed world.
Which Direction Will We Tip?
There could definitely be a few decades of resistance from the people in control of the current centralized power structures, but the truth has to win out in the end. Legislators, traditional corporations, legal systems, banks, and more can all be replaced by distributed systems of trust. Whether it's Bitcoin, Ethereum, Mastercoin, Invictus, or any other blockchain-based innovation that makes it possible, we will soon be able to apply peer-to-peer technology to every aspect of our real lives. As more people realize that our old institutions are no longer relevant thanks to advances in technology, those institutions will begin to die off and fade into the past. No matter what anyone says, we still live in a free market where people can choose the system that matches up with their personal desires. At the end of the day, most people just want the freedom to pursue their own version of happiness.
Last modified (UTC): April 20, 2014 6:31 PM