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Bitcoin and the March Toward the Abolition of State Control

Reading Time: 5 minutes by on January 11, 2017 Bitcoin, Commentary, News
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Since the birth of bitcoin, this has motivated many aspects of the blockchain on its way to reshaping society and the nation state. Bitcoin separates money and state, reducing the power of central banks. Moreover, bitcoin provides some anonymity to support a perpetual traveler lifestyle, as people begin to protest against governments by not complying with taxes and as blockchain technology develops even further, smart contracts will disintermediate many aspects of government, radically changing our concept of the nation state.

Bitcoin Separates Money and State

Bitcoin is a perfect tool for a new way people can achieve the outcome of avoiding taxes and exercise the freedom of self-governance. Jeff Berwick, the founder of the Dollar Vigilante, outlines how to legally avoid taxes and gives insights on how to be a perpetual traveler on a podcast. Berwick in his words believes that a government is an unnecessary evil, taxation is theft and a way for the government to enslave people.

Berwick disagrees with the ideology or the need for government control or taxation as the underlying aims of governance is to force others into indoctrination and coercion. These principles are imbedding in the way Berwick lives his life and tax is used inappropriately “mostly war, which is murder, it funds giant communist style bureaucracy, and most of it wasted and destroyed and actually creates all sorts of problems in the economy.”  Dollar Vigilante has thousands of subscribers worldwide and many people share the same philosophy of sovereignty, which is growing strongly amidst the ‘War on Terror’. 

Berwick describes the perpetual traveler concept and how the attractiveness of this lifestyle is growing as people are waking up to the slavery of the taxation system. The popularity of the perpetual traveller was amplified initially by Harry D. Shultz and draws on individuals spending several periods of their time in different countries in order to increase their overall freedom. The idea focuses on individuals avoiding taxation and civic obligations, and Berwick states this has grown and continues to gain popularity as people are learning more about the lifestyle.

Perpetual travelers are required to juggle the movement of wealth in various ways, which are not traceable by governments. The use of cryptocurrency allows anonymity away from state involvement and therefore extremely treasured by a perpetual traveler to avoid tax along with other private dealings. Additionally, a perpetual traveler is faced with the challenges of concealing wealth from intrusive firms such as the NSA and the use of bitcoin provides an opportunity for unprecedented freedom.

Edward Snowden remarked in November 2016 that “Coincidently, new technologies raise the possibility of unstoppable tax protests.” Since bitcoin allows people to avoid paying taxes and allows people to buy and sell currency pseudo-ananoymously it is the best option available other than using cash and bartering in order not to leave a trail or be accountable to pay tax. There is also applications available that increase the anonymity of cryptocurrency use such as coin shufflers, tumblers, and Tor which allows users to hide their location.   

Alternative cryptocurrencies such as Monero, Dash, and Zcash are making advancements towards pure anonymity on to the digital realm and many people believe in these advancements will improve privacy. Edward Snowden also stated June 2016 that Zcash might be the solution as the Bitcoin blockchain is increasingly monitored.

Bitcoin has increasingly attracted radical libertarian, geek groups, those that use darknet to buy illicit possessions. However the growth in popularity of the three groups above has impacted bitcoin being a trusted store of value and unit of account and to improve on these functions of money, it will take time.   

Furthermore, bitcoin and other cryptocurrencies are not managed by the government and were introduced to remove the controls of government and surveillance. Therefore the growing adoption of bitcoin or any other cryptocurrency is pushing toward the removal of the nation state as we know it. Although the process of such an ideal has already begun, it is decades away from realization.

Although a dominant design of cryptocurrency may emerge, a single currency for everyone to use is not realistic or even ideal. However we can anticipate groups to develop with similar interests and economic aspects; we are already starting to see this play out in the cryptocurrency space, with Ethereum for smart contracts, Monero for darknet markets and bitcoin as a store of value and funding currency.

The US dollar is the world’s most dominant currency not due to the nation’s unyielding belief in freedom or undertaking of the leaders to run their country in a successful manner, but rather from its ability and willingness to engage in military conflict and oppression. However, as history has shown us that when a country wants to separate from the dependency of the US, they will ignore the laws and pursue to destroy those that seek their own best interests.

An interesting aspect of bitcoin is that it cannot be bullied or destroyed by government or military forces. The digital platform which bitcoin operates in however will be susceptible to violence within the cyberspace environment since it consists of the issuance and theft of money. The bitcoin network can be targeted in other ways since important information such as movement of data, relationship of financial information and holdings. According to a report published by Diginomics titled “Bitcoin is cash under surveillance,” the Bitcoin network appears to offer financial liberation and anonymity. However, in the long run, the Bitcoin network is anticipated to become the most surveilled method of money, similar to how the internet was revolutionary but now the activity of users is monitored.

Blockchain Tech Will Reshape the Nation State 

Although the process of decline of the nation state has already begun, the mixture of these aspects will mean that the nation state is expected to transition through a disruptive societal shift and this will take decades.   

The use of smart contracts will be a substantial move towards the role of self-governance. Smart contracts are built on the reliance of the protocols rules and perform independently with agreed outcomes.

The wider population have recently been exposed to the possibilities of smart contracts through the use bitcoin and cryptocurrencies such as Ethereum providing the solution for its operations and are yet to be aware of the full potential of the technology. Smart contracts will lead to the decline of the nation state by handling business without the government’s involvement. Smart contracts have the potential change and influence various sectors such as an array of financial services, the entire legal system, and property law. Therefore smart contracts open up an entire digital realm that allows people to exercise their sovereignty, and will benefit from a substantial reduction in costs and efficiency gains.

In this way, these technological advances are igniting the general public to question the very aspects of the ethics of authority. For example, many protocols are being trailed and tested such as voting mechanisms, people creating digital establishments, real estate transactions, property, international passports and IDs are all at the early stages of realization and a significant step toward the progress of choice and autonomy. 

The breakdown of the traditional nation state is exemplified by the emergence of microstates such as Liberland and the proposed space haven, Asgardia. In an interview Liberland’s founder, Vít Jedlička, said Bitcoin is “truly the base of our economy”:

“It is truly the base of our economy. Even first boat in Liberland was bought using bitcoin. Very soon there will be an Uber-like app that will allow E-resident of Liberland to make business in bitcoins all around this planet.”

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