If Fiat brings War, can Bitcoin bring peace?
How Bitcoin can restrain the nations' drive towards war
The common thread - from a sound money perspective - is that wars would not be possible without the ability to print value ex nihilo.
Looking superficially at the list of wars that were fought after we left the gold standard in 1915 - to finance both World Wars and then transitioning from the 1945 Bretton Woods system to an unconstrained fiat system in 1971 - one might be tempted to think that the number of conflicts have substantially increased.
In 108 years of fiat-fuckery we had 15 major wars, of which two were global world wars. The two most recent regional conflicts, Ukraine and Palestine, nowadays look increasingly global, at least in terms of support, monetary flows and weapon supplies.
The cost of human lives is mind-blowing, between 116 and 132 million people excluding the Ukraine-Russia and the Israel-Palestine open conflicts. However, the numbers could be much higher since the victims of the last 20 years of the "war on terror" seem highly underestimated.
But the perception that wars have increased in the last 108 years - compared to the past 750 years when gold was money - may be misleading. Historically, there have been many wars even at times when the developed world was running on the gold standard. For instance, from the mid 1200 up to the outbreak of WWI the world has always been using gold money. Firstly during the Renaissance with the Florentine Florin and then the Venetian Ducat. Then from the mid-17th century up until 1914 under the classical gold standard.
In this period - spanning almost 750 years - the world's economies and their wars were constrained by the gold supply and its inflation rate of approx 2% per year. Despite the fact that, contrary to the thinking of the apologists of fiat money and of unrestrained credit, mankind made in this period arguably the biggest progresses (with inventions such as the printing press, the telescope, the steam engine, the combustion engines, the telegraph, the electricity, the photography, the radio communications, the telephone, the vaccines and all the modern transportation vehicles), there have been still far too many wars.
Indeed, in this period Europe was plagued by many internal conflicts such as the Thirty Years War, the Italian Wars for the supremacy in the Mediterranean and the Napoleonic Wars, all of them costing millions of lives.
Not only gold did not substantially reduce intranational conflicts but it was one of the main reasons for the bloody colonization campaigns. Sadly, by far the biggest massacres in human history have been made by imperial European powers in their colonization campaigns in search for precious natural resources in the new world. The European conquest of the Americas in 1500 has caused directly or indirectly (due to imported diseases) the death of over 30 million Native Americans.
This is clearly the downside of money based on a natural resource which is both naturally scarce and limited to certain geographical areas. The geopolitical incentive there is clearly to appropriate such resources with violence in a never ending quest for money and power.
In 1904, Halford Mackinder in his "Heartland Theory" has applied this simple concept to the area of Eurasia. His work gives us also a much clearer geopolitical reading of the true reasons behind the current Russia-Ukraine conflict, the sabotaging of the North-Stream pipeline and generally the western aggressive posturing towards China, Russia and the growing Eurasian BRICS axis.
The same is true today for the Israel-Palestine conflict. As usual “managed war triggers”, false-flags and false narratives are hiding the truth to the masses. Money and the geopolitics of vital natural resources are the only key to understand this conflict. Massive gas reserves have been uncovered in front of Gaza and a project worth US$ 55 billion is in the making to build a new channel linking the Indian Ocean to the Mediterranean via the Gulf of Aqaba - thereby bypassing the Suez Canal - with the closest Mediterranean exit right where Gaza is today. Israel has a vital geopolitical interest in both. The Gaza exit will save US$ billions to the Israeli project developers/financiers, rather than having to exit more north on the Israeli territory around Ashkelon. This - in the mind of the unscrupulous Jewish Machiavellian leaders - is more than enough to implement the “final solution” for Gaza and the current genocide of Palestinians. Nowadays the not so secret objective is clearly to deport the leftover Gaza population somewhere else and appropriate the Gaza strip for the above reasons.
Unfortunately nothing new under the sun, the same old colonialist approach.
But what if money could be based, rather than on a scarce natural resource, on a mathematically scarce digital asset, that no one controls and that gives no one on the planet an "exorbitant privilege"? A geopolitically neutral digital commodity?
Now, that could change the world.
This asset is Bitcoin.
It is important to point out the differences between the former gold standard and a future Bitcoin standard to understand how this could be a massive improvement for mankind because of Bitcoin's technological advancements:
Unlike gold or oil or gas, bitcoin is not a commodity. It is geopolitically neutral. One does not need to colonize, dominate, oppress or appropriate someone else´s natural resources with violence to mine bitcoin. Nations simply need to invest in computational power and cheap energy. The cheapest energy available is the abundant renewable energy from stranded sources. The energy sources that no one can tap into because they are located too far from electrical grids and therefore too expensive to exploit. But not for bitcoin mining. Think of the abundance of solar energy in the desert or remote waterfalls, or remote areas rich of thermal sources or volcanoes. No need to build pipelines, no need to lay down hundreds of kilometers of cables. A stand-alone container full of ASICs does the job 24/7, 365 days/year.
Military power also does not help. Small visionary countries like El Salvador could be the superpowers of the future in a Bitcoin standard. Sure, one might object that since energy is generated from natural resources, the access to such sources can shape the geopolitics of Bitcoin. Even if this might happen to a certain limited extent, the key point is that plentiful cheap renewable stranded energy sources exist. Everywhere. Every nation on earth has access to such resources. Some more, some less, some have more sun, some have more waterfalls, some have more thermal sources. But the key point is that everyone on earth has some of it. Differently from natural commodities such as precious metals, oil or gas which are rather concentrated and vulnerable to geopolitics. The same consideration applies to the race to develop faster ASICs hardware. Perhaps the only criticality remains the widespread need for chips, but this is already an open issue for all hardware today, phones, laptops etc. and not solely for the bitcoin mining hardware.
Paradoxically, gold's most valuable property - its physical form - became its biggest shortfall at a time of increasing speed in international commerce. Gold could not keep up with the speed of commerce. This created the opportunity for the banksters to exploit this shortfall by acting as "trusted intermediaries". At the time it all made sense, it was an important advancement. They held physical gold in the vault and issued IOUs which could travel with ease at the speed of goods. Banknotes were born. From that to a fiat only system the step was relatively short.
But in October 2008 the technology made a new giant step forward and gave us a new tool for new money. Bitcoin was born.
Bitcoin has no such shortfalls. It travels at the speed of communications, at the speed of bits not of goods. It is peer to peer exchange of a bearer asset with immediate finality, just like cash or a bar of gold which you hold in your own hands, except that it is digital. It does not have what was gold's major shortfall, its physical form and slowness. No intermediaries, no counterparty risk. Your keys, your bitcoins.
Gold could be sized. It has been on multiple occasions. Roosevelt's infamous Executive Order 6102 is one such examples.
Bitcoin is a censorship resistant digital bearer asset. Unless someone gets your private keys (or force you to give it up with a gun to your head) it cannot be sized, stolen or appropriated by anyone, not even the government, not the NSA nor the CIA. This is very important, and not only for the citizens - which are thereby protected from the rapacious claws of authoritarian governments - but also for Nation-States because it protects them from the aggression of larger and more militarized nations. If you can launch "shock and awe" military operations and carpet bomb into oblivion countries such as Iraq and Libya only to appropriate and exploit their natural resources, your military might will be of no use to appropriate bitcoins.
From point 3 derives the importance of bitcoin's self custody. This is critical. Because it is a natural restraint on monetary expansion. And it achieves that much more effectively than gold did in the past because of its technological advancements. Open source technology and widespread global access to bitcoin and its relative ease of use, make it a much more pervasive instrument of monetary self-defense than gold is.
As soon as the government abuses the printing presses, the flight from fiat to bitcoin is almost effortless compared to having to buy a gold bar and store it safely. The same goes with governments trying to introduce capital controls. One thing is trying to go through customs with a stack of cash, Rolexes or gold bars, another is doing that with a seed-phrase in your brain. The depreciation of fiat vs bitcoin is almost immediately apparent. The loss of purchasing power of fiat vs bitcoin is quickly noticeable and therefore acts as a stronger restraint for the governments than gold did in the past. As an historical parameter consider that by the end of WWI, Germany and Austria had seen 48.9% and 68.9% currency depreciation in comparison to the Swiss franc — which was still on a gold standard. And compared to that bitcoin would react on steroids.
This also explains why governments globally are trying to close the on-off ramps from fiat to bitcoin using regulations to their advantage. This is where the real fight with increasingly authoritarian governments will be. Deceptive regulations masquerading as indispensable tools for combating crime and money laundering will be used to discourage Bitcoin adoption. And CBDCs the final nail in the coffin of the monetary freedom for the bitcoin illiterate masses.
5. From the above derives also a number of additional considerations worth keeping in mind.
(i) the bitcoin constrain on money supply will transform the current destructive "culture of war and the business of war" into a true "defense industry".
Even if bitcoin cannot change human nature and aggressive instincts, it can dramatically alter the incentives. It can deter conflict and encourage peace and collaboration. Nations will refrain from war unless they are forced to for their survival. If there is a choice between peace and war, and you have limited funds, you will be forced to pursue peace first because this will generate positive economic growth rather than wasting resources in a destructive endeavor. War should not be a business like selling mobile phones, rather an unwelcome and sad necessity to defend from an aggression. And that alone will be a major improvement for humanity. Clearly certain conflicts, which are triggered by geopolitical reasons of supremacy for some key natural resources - such as in the current Ukraine-Russia and Israel-Palestine conflicts referred above - will still happen. However they will be likely more constrained both in their duration and the risk of wider escalation.
Take the latest as an example. If Israel´s war of annexation of Gaza could not be funded by US$ unlimited fiat fuckery, the Israelis should have carefully considered the cost of such war (and for how long they would be able to finance it), versus the option to having a mutually convenient agreement with the Palestinians. Maybe, granting them a share of both the gas deal and the Aqaba Canal future revenues - in exchange with the agreement to peacefully clear the areas needed for construction and voluntarily resettle somewhere else - would have been an economically convenient option compared to an all out war with all the risks of it.
The Israeli Central Bank has recently estimated the cost of 2 years of war at US$ 53 billion. This is 10% of Israel´s GDP being literally burned to kill people and destroy infrastructures. This is also equivalent to the estimated cost of building the Ben Gurion Canal at US$ 55 billion. The project should cut from the Gulf of Aqaba right through the middle of Gaza to exit in the Mediterranean sea thereby linking the Indian Ocean and the Mediterranean via the Red Sea as an alternative to the Suez Canal. Intuitively, only a fraction of US$ 53 billion could have been better invested to reach an agreement with the Palestinians over the revenues from the Leviathan gas reserves and the Ben Gurion Canal project, if only Israel had to pay for that war with its bullion reserves or bitcoin, rather than with US$ fiat-fuckery printed ex nihilo by its American friends. But when money is free to print and the bill is shouldered by the ignorant and manipulated masses (via inflation or additional debt), while the profits flow yet again into the pockets of the MIC and the usual war profiteers, then the incentive is clearly to wage war.
As one can see, hard money would create radically different incentives compared to when one can finance an all out war with fiat-fuckery.
(ii) Bitcoin mining will become a strategically important industry for economic development, if not the most important industry. To some extent this will unleash a number of geopolitical considerations both regarding the availability of energy sources and of technological development which I have made above in para 1.
(iii) Bitcoin, if adopted as the primary global neutral reserve asset, will constrain (but not eliminate) most forms of national debt finance/credit.
This will likely be a much more constrained form of debt finance than we currently see, though it is hard to estimate this precisely. Most likely, it would not be sufficient to enable nations to debt-finance large-scale conventional wars involving mass mobilization, let alone decades-long wars or imperial adventures.
The precise outlines of the future state of geopolitical competition in a Bitcoin standard are hard to foresee. Exactly how the incentives of Bitcoin mining and national reserve adoption may affect the calculus of Nation-State violence is unknowable. Still, the above discussed points are very good reasons to believe that Bitcoin may reduce the incentive for large-scale, conventional war and imperial-style occupations.
Conclusion
In the last 20 years the "wars on terror" have yielded immense wealth to the usual suspects. For the Military-Industrial Complex (MIC) the incentive is clear: wars serve to unload stocks of weapons and replenish them. All of the US governments of the last 20 years ruled by divide et impera: they sowed disorder and chaos whenever the "vassal" or the “rebel” refused to comply. This was possible solely because the US had the "exorbitant privilege" of printing unlimited amounts of fiat dollars to finance wars and to corrupt the elites of the vassals to satisfy its demands. The pro-tempore vassal-puppet government gains, the elites of the vassal gain, the imperial MIC gains, all the others lose. And the puppet masters and the cantillionnaires - who had massive vested interest in the MIC and who used the opportunity of 9/11 to launch the profitable 20 years "war on terror" which we paid for - happily laugh at us.
Who pays for yesterday's and today's wars? Citizens do, even if most are unaware of that. We pay with monetary inflation and the loss of purchasing power of the fiat-fuckery. A constraint must be put to the governments´abuse of fiat.
What gold could not achieve, today Bitcoin can. Bitcoin is digital gold on steroids. Bitcoin is the future plumbing of a new monetary system.
Bitcoin can alter the incentives of the governments. The role of the MIC will be constrained to that of a real "defense" industry, reduced from the current metastatic cancer it has become. The MIC shall provide the government products and services within a limited budget allocated for the defense of the Nation-State from external threats. The imperial war machine, which profits from bringing destruction and chaos around the world with endless wars will be neutralized.
Suddenly, by simply replacing the fiat fake-corrupted money with an honest global bearer asset running on a revolutionary protocol which is censorship resistant, decentralized, controlled by no one and not giving any particular advantage to anyone, the world can aim at peace rather than war for the first time in human history.
It is high time that people wake up to the importance of having honest money in our society and understand what money really is and which incentives it creates. People have to understand that the current fiat based monetary system is rigged and benefits only the elites and their vassals at the expenses of all the rest of us.
This is the mother of all evils. For this very reason the elites try to dictate to us what money should be and should not. They want a system that they can control, a monetary system dictated from above and governed from the center.
Like gold was freely chosen as money because it was the best money available at the time, we can now choose a free, open-source, totally decentralized technology as our best form of money. Bitcoin adoption is bottom-up, not bottom-down. Invest some time to learn about it and start using it. If we do that, we can rewrite the incentives to make the world a better place worth living for all humanity.
Bitcoin is peace and hope for the future of humanity. Be part of that peaceful revolution and start learning about it.
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