Introduction
Bitcoin will revolutionize politics, not replace it.
Even if hyperbitcoinization were to become a reality, with Bitcoin at the center of the monetary system rising from the ruins of the current fiat system, the state would remain the dominator of international relations. It would rise from the ruins of its predecessors, like a phoenix from its ashes.
As Max Weber wrote more than a hundred years ago in his famous essay “Economy and Society”, the state will continue to use legal coercion and violence as its specific and distinctive means of action. This is due to its essence as an aspiring monopolist of violence internally and the king does not recognize the superior external.
Thanks to Bitcoin, the state will undergo new and diverse transformations that are currently difficult to imagine. The state will undoubtedly face significant challenges and reductions compared to the current state, with changes in geographical reach, resources, competences and ambitions. Nevertheless, even with the desires of anarcho-capitalists and the most fervent libertarians, the state will not disappear completely as a social organizational structure.
While the voluntary, transactional, and cooperative aspects of human interactions may predominate in a hyperbitcoinized world, they will not be the only components.
There will always be individuals who choose to enforce their beliefs through violence, simply because it is a viable and convenient option. Furthermore, some level of violence is inherent to our nature as animalistic creatures, and as long as humans inhabit this planet, violence will exist. Consequently, as long as violence exists, there will be attempts to organize, legitimize, and regulate it. This leads to the inevitable “historical necessity” of the state as a regulator and concentrator of power among individuals. Whether it arises from a social pact between equals, is imposed from above through annexation or invasion, or arises from an anarchic “man is wolf to man” scenario in which the strongest dominates and seizes power, the state has evolved over time through various forms—from tribal societies to nation-states to empires—and has been sustained by various political systems such as monocracy, oligarchy, democracy, and more.
The “new state” in a global Bitcoin system will be stripped of extensive monetary power, significantly limiting its ability to collect debts and manipulate currency. Consequently, it will need to shrink in both size and scope, and return to its core functions of lawmaking, adjudication, ensuring security, and providing defense. In an ideal scenario, it would resemble a minimalist state, like those of minarchists, voluntarily embraced by its citizens and based on mutual consent. This envisioned state could be a small entity, akin to a city-state among many others, or a compact nation-state centered around religious, linguistic, ethnic, and moral identities that will certainly not disappear with the advent of a Bitcoin world.
This future trajectory suggests a global landscape reminiscent of past political examples, such as medieval Italy with its city-states, or ancient China with its pre-imperial states, or sixth-century Greece with its poleis, or even the American West of the nineteenth century. Hopefully with a much lower degree of political violence compared to the earlier examples due to a significantly higher average material well-being – a result of enormous technological advances that produce an abundance of goods, discourage predatory human impulses driven by resource scarcity – and an unprecedented level of commercial and informational interconnectedness compared to historical precedents.
Technological advances have facilitated communication as a solution to the prisoners’ dilemma and will continue to do so in the future. Also, large-scale trade can be a useful alternative to war.
That said, we should not expect perpetual peace as Kant envisioned. Interstate warfare will likely be rarer and a last resort in such an environment, but it will not be completely out of the realm of possibility. Some communities would still attempt to use coercive means to achieve their goals at the expense of their neighbors who are drawn into war. However, this rare occurrence would likely result in less blood and resources being shed than today, given the diminished capacity/economic power of the new state, as well as the prevailing interests in peaceful trade and the fresh historical memory of the horrors of warfare and warring states in our era.
Diplomacy and Blockchain
In this hypothetical context, with many small sovereign states, intensive trade, and relative international anarchy, there will be a proliferation of diplomatic activity, a flourishing of bilateral and multilateral alliances, and this is where the Bitcoin network comes into play again. What better place for states to ratify and archive agreements and treaties than on Bitcoin’s layer 1?
Diplomatic negotiations indeed have many similarities with commercial negotiations. In the one case, they are about negotiations between states and treaties; in the other case, they are about contracts. Just as contracts are not concluded in the absence of trust between traders, treaties are not ratified without trust between states. Therefore, a certain degree of trust is essential not only in private economic transactions, but also in political-diplomatic relations.
In a world far more politically decentralized and fragmented than the current one, where every monetary transaction will be based on “trust” in the Bitcoin blockchain or its higher abstractions, and where the security and inviolability of the code will be guaranteed by an enormous amount of energy and the largest network of computers ever seen, it would be perfectly reasonable for newly formed states to choose it as the place to store their legally binding relationships. But how?
One could rely on Bitcoin’s ordinal theory to develop a special standard for digital signatures originating from wallets/public keys belonging to sovereign states and on this basis build an ‘official’ protocol for ratifying, registering and amending international treaties on Bitcoin’s layer 1, which would be universally recognized via a consensus criterion by the network nodes and as common law among sovereign states.
Why Bitcoin Layer 1 specifically?
In addition to its symbolic value as a cornerstone of the future international monetary system, the Bitcoin native blockchain offers many practical advantages as a platform to record international treaties. These include its inherent features such as publicity and traceability (monitorability), immutability, ordinality (the timestamping mechanism to obtain a specific date for each transaction) and last but not least, neutrality (as a public good that can be used by everyone, owned by no one and therefore not subject to influence).
Looking ahead, an additional benefit could be the costliness due to the increase in transaction costs. This would give more weight and value, compared to today, to what is agreed upon and recorded between parties (similar to positional goods).
By considering the possibility of constructing tree structures of ‘smart-treaties’ on the higher layers of Bitcoin, depending on events (transactions) that occur on the main blockchain or other layers, we can see how the flexibility of this tool can extend the options and functionalities of current diplomatic treaties. This extension can make them highly detailed and interactive, and thus effective and adaptable to a highly fragmented and complex international political system.
Conclusions
In conclusion, using the Bitcoin blockchain as a decentralized ledger for recording and archiving international treaties and agreements could offer numerous benefits in terms of publicity, traceability, immutability, neutrality, costliness, and programmability. This technology could revolutionize the way international agreements are written, managed, updated, and monitored, thus providing greater security, transparency, and trust between the parties involved. These improvements should in turn promote collaborative behavior (as taught by game theory) and thus reduce the risk of conflict between states, thereby maximizing the benefits for all members of the future international relations system.