introduction
Bitcoin will revolutionize politics, not replace it.
Even if the overuse of Bitcoin becomes a reality with Bitcoin at the center of the monetary system emerging from the ruins of the current fiat currency system, the state will still be the dominant force in international relations. It will rise from the ruins of its predecessors, like a phoenix rising 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 because of its very nature of monopolizing force internally and externally. The king does not recognize his president Externally.
Thanks to Bitcoin, the state will undergo new and diverse transformations, which are currently difficult to imagine. It will undoubtedly face significant challenges and reductions compared to its current state, including changes in geographic scope, resources, competencies, and ambitions. However, even with the desires of anarcho-capitalists and the most ardent libertarians, the state will not disappear completely as a societal organizational structure.
While the voluntary, transactional, and cooperative aspects of human interactions may dominate in a hyper-Bitcoin world, they will not be the exclusive components.
We will not surrender to violence. There will always be individuals who choose to resort to force to assert their beliefs, simply because it is possible and appropriate. Moreover, a certain level of violence is inherent in our nature as animalistic beings, and as long as humans inhabit this planet, violence will exist. Thus, as long as violence persists, there will be efforts to regulate, legitimize, and organize it. This leads to the inevitable “historical necessity” of the state as an organizer and center of authority among individuals. Whether the state arises from a social compact among equals, is imposed from above through annexation or conquest, or emerges from an anarchic “man is wolf to man” scenario where the strongest dominates and seizes control, the state has evolved in various forms over time—from tribal societies to nation-states to empires—and has been supported by diverse political systems such as monopoly, oligarchy, democracy, and more.
The “new state” in the Bitcoin world system would be stripped of its broad monetary authority, severely limiting its ability to accumulate debt and manipulate currency. It would therefore need to be reduced in size and scope, returning to its core functions: legislating, governing, ensuring security, and providing defense. In an ideal scenario, it would resemble a simple state, such as the one favored by microstate theorists, voluntarily accepted by its citizens and founded on mutual consent. This envisioned state could be a small entity, more like a city-state among many others, or a compact nation-state centered on religious, linguistic, ethnic, and moral identities that would certainly not disappear with the advent of the Bitcoin world.
This future trajectory suggests a global landscape reminiscent of earlier political examples such as medieval Italy with its city-states, ancient China with its pre-imperial states, Greece in the sixth century BCE with its states, or even the American West in the nineteenth century. The level of political violence will hopefully be much lower than in earlier examples, thanks to much higher average material well-being—the result of massive technological progress that provides an abundance of goods and discourages human predatory impulses driven by scarcity of resources—and a level of commercial and information interconnectedness unprecedented in historical precedent.
Technological advances have facilitated and will continue to facilitate communications as a solution to the prisoner dilemma and large-scale trade as a useful alternative to war.
But we should not expect the perpetual peace that Kant envisioned. War between states may be rarer, and may be a last resort in such an environment, but it is not entirely excluded from the realm of possibility. Some societies may try to use coercive means to achieve their goals at the expense of their neighbors, who end up at war. But this rare occurrence is likely to result in less bloodshed and less resources than it does today, given the reduced capacity and economic power of the new state, the prevailing interest in peaceful trade, and the new historical memory of the horrors of war and warring states in our time.
Diplomacy and Blockchain
In this hypothetical context, with many small sovereign states, extensive trade, and relative international chaos, there would be a proliferation of diplomatic activity, a flourishing of bilateral and multilateral alliances, and this is where the Bitcoin network would come into play. What better place for states to ratify and archive agreements and treaties than on the first layer of Bitcoin?
Diplomatic negotiations share many similarities with commercial negotiations. In the former, negotiations are about bargaining between states and treaties; in the latter, they are about contracts. Just as contracts cannot be concluded if there is no trust between traders, treaties cannot be ratified if there is no trust between states. Thus, a certain degree of trust is essential not only in private economic dealings but also in diplomatic political relations.
In a world more decentralized and politically fragmented than the current one, where every monetary transaction would be based on “trust” in the Bitcoin blockchain or its higher abstractions, and where the security and sanctity of the code would be guaranteed by vast amounts of energy and the largest network of computers we have ever seen, it would be entirely reasonable for newly formed states to choose Bitcoin as a place to store their legally binding relationships. But how?
Bitcoin’s ordinal theory can be used to develop a custom standard for digital signatures generated by sovereign state wallets/public keys and build from this a “formal” protocol for ratifying, recording and amending international treaties on the first layer of Bitcoin that is globally recognized through a consensus standard by network nodes and customary 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 original Bitcoin blockchain offers many practical advantages as a platform for recording international treaties. These include its inherent properties of publicity, traceability (the ability to monitor), immutability, ordering (a timestamping mechanism to have a specific date for each transaction), and last but not least, neutrality (as a public good that can be used by anyone, owned by no one, and therefore not subject to influence).
Looking ahead, there may be an added benefit of being more expensive due to higher transaction fees. This would give more weight and value, compared to today, to what is agreed upon between the parties and recorded on it (similar to spot commodities).
By considering the possibility of building tree structures of “smart treaties” on the upper layers of Bitcoin based on events (transactions) that occur on the main blockchain or other layers, we can see how the flexibility of this tool could expand the options and functionality of existing diplomatic treaties. This expansion could make them highly detailed and interactive, and thus efficient and adaptable to a highly fragmented and complex international political system.
Conclusions
In conclusion, using the Bitcoin blockchain as a decentralized registry to record and archive international treaties and agreements could offer several advantages in terms of publicity, traceability, immutability, neutrality, cost, and programmability. This technology could revolutionize how international agreements are written, managed, updated, and monitored, ensuring greater security, transparency, and trust between the parties involved. These improvements, in turn, could promote cooperative behavior (as taught by game theory) and thus reduce the risk of conflict between states, maximizing the benefits for all members of the international relations system in the future.
