Since its creation in January 2009, Bitcoin has emerged as a symbol of revolution. With no official ties to any preexisting political organization or financial institution, a majority of young digital natives see it as a means of leveling the economic playing field. People who, due to constant exposure, are increasingly skeptical of governments and banks are now realizing that Bitcoin may be their ticket to self-sovereignty and genuine freedom. More than any interest in emerging technologies, this has been the primary drawing power of Bitcoin.
The Decentralized Future
Taken in part from the technical principles of Bitcoin, ‘decentralization’ has, as an ideology, been adopted by the crypto world as a sort of ‘end goal’. The concept has played such an important role in defining the progress of the entire space that centralized parties are being increasingly criticized and demonized for their role in leaching off the ideals of bitcoin for personal gain. The idea is that blockchain-powered open and transparent digital infrastructure will allow for a truly democratic society that is based on principles of accessibility and personal freedoms. What this world will actually look like is anyone’s guess, but at the moment, ‘decentralization’ acts as the guiding star.
Proponents of decentralization view power and control as a sliding scale whereby one’s sovereignty can only be attained by wrestling it away from central authorities. This view of institutions of power as being oppressors of individual liberties has led to a growing movement in the West to reduce the scale and size of governments. Smaller governments have less capacity to exert power, less capacity to oversee, and fewer responsibilities. In effect, this small government idea is likely to render Western governments as toothless figureheads playing a role similar to modern-day monarchs.
Although this movement towards small government seems like progress towards a fairer world, we are viewing it through an inherently Western bias; the movement is not at all universal. The West’s leading ideological opponent, China, is heading in directly the opposite direction with just as much speed and even more public support. After supporting unthought-of quality of life improvements for Chinese people, the ultra-pragmatic CCP has fully captured the hearts and minds of the world’s largest ethnically homogenous society. In return for their effective leadership, the government has earned unquestioned faith and devotion. If power is a sliding scale, the Chinese government is already past the point of negotiating for movement, and the people are still happy and willing.
Also standing opposed to this fair distribution of wealth and opportunity is the role of high net worth individuals who see investment in Bitcoin as being a hedge against the US dollar. Whether through a genuine interest in an alternate Bitcoin-driven economy or by fear of being left on the wrong side of history, HNWI’s around the world are transferring their traditional wealth into cryptocurrency. This severely limits the ideological value of Bitcoin as the disparity in purchasing power just transfers from one financial system to another, with big players spending a lot to smoothen the transition further. Eventually, as migration friction between the two systems diminishes, cryptocurrency-supported DeFi and traditional finance will be adequately blurred that they become one whole.
A Fragmented World Order
The influence of Bitcoin is not limited to the financial space, however. As we grow more accustomed to the principles of decentralization and digitization of wealth, our culture will also irrevocably change. Happening slowly at the beginning but then achieving snowball-like adoption rates, cryptocurrencies have the capacity to divide societies. This is easy to understand if we consider the symbiotic relationship of money and culture and the incredible pace of developments in cyberspace or the ‘metaverse’. As a species, we are pulling further and further away from our physical reality and entering headfirst into previously unexplored territory; Bitcoin is just one piece of the puzzle. Moving forward, some will choose to adopt this new digital-first culture, whereas others will object and retain their traditional lives.
Through division and separation comes competition. As the ideologies of decentralization and centralization develop into definitive spheres of influence, the world will enter a new world order, with each governing its own semi-dependent financial system. Technological advancements will allow involvement and participation to be accessible to all, creating a truly universal world system and subsequent clash of civilizations.
The symbolic value of Bitcoin as the trigger to a worldwide financial and cultural transformation is often overlooked by marginalized digital natives just wanting to stick it to ‘the man’. Eventually, Bitcoin may underpin a world economy that revolutionizes the concept of wealth and power, leading to cultural and political anarchy not seen for a long time.