I have already speculated about some of the implications of bitcoin, mostly looking at the near-term future. I’d like to take a walk through some possible scenarios that go a fair bit farther into the future. Of course this is now entirely fiction, I acknowledge that bitcoin can still “die” tomorrow, or the price could “go to zero”. It may remain a niche market for remittances or only be useful for buying things online from select retailers (similar to the present). But those scenarios aren’t particularly interesting. Instead, let’s take a peek at what could happen in a future where the entire earth is engulfed in the first ever global and truly free market.
In order to journey into this rabbit hole let’s arrive at a hypothetical scenario: 10-20 years down the road bitcoin and (and other crypto-currencies) have largely replaced national fiat currency. Cheap smartphones and mobile internet are ubiquitous, even in remote developing nations. The vast majority of families own at least one smartphone, and hold and use bitcoin for storing and spending their money.
For a time, many governments in fear of losing control over their monetary policies and devices resisted the bitcoin revolution. Some nations outlawed crypto-currency, refused to accept bitcoin for taxes, fined businesses for accepting crypto-payments, and jailed people for exchanging digital money. The benefits of a widely-adopted, decentralized, neutral, borderless, permissionless, censorship-resistant currency with little barrier to entry serving nearly the entire population of the world ignite conviction in the people of these nations to support this technology. They rally in the streets and oppose the bans on crypto. Other nations without bans pull ahead of the economic race due to their freedom to participate in this new global market. Some national currencies experience significant inflation due to capital flight away from fiat.
Some regimes try to create their own crypto-currency, often trying to retain control, creating centralized, permissioned digital money. When people are left with the choice between a neutral and permissionless money that is global, and a permissioned, centralized money that only works in their country of origin, the choice was obvious. In the end, bitcoin proves to be unstoppable. Eventually governments either succumb to the new status quo, or fail trying to oppose it.
Banks suffer the most from this revolution, as a great deal of their business model is made obsolete when people can store and transfer money independently. Some banks resist the change as long as they can, and those in countries with great inflation see the value of their holdings decrease. Many banks collapse completely, unprepared for how quickly everything shifted. Other banks see the writing on the wall and acquire vast sums of crypto-coin. Those that embrace crypto-currency learn that the other half of their business model is still relevant: custodial storage of money for the masses, and loaning money to businesses and people. Though central banks lose their monopolistic control of the global money supply and transfer, (they can no longer “print money” unless they can convince people to buy their flavor of bitcoin), they could remain relevant and serve the people if they provide a valuable service. But that’s a big “if”, because under the bitcoin system, banks aren’t truly needed at all.
The hardest piece of the puzzle to eschew banks was the economics of loans. But the people learned that instead of giving their money to banks that in-turn loaned it out to others to make money, that they could simply loan to each other, cutting out the middle-man. It took a while to develop a decentralized means of “credit rating” to alleviate the counter-party risk involved, but eventually the problem was solved through a voluntary, cryptographically secure means of self-identification and smart-contract-fueled credit-building. Crowd-lending platforms exploded onto the new global economy.
What emerged was a shift in power away from central banks and government superpowers. Without control of the supply of money, nations start to lose the “house edge”, and people were free to transact across borders, across socio-economic lines, and across the tribalistic societal norms of the old world.
Concurrently, other areas of technology advanced significantly during this interval of time, including self-driving cars, artificial intelligence, crowd-funding, renewable energy, distributed smart-grid power, and mesh internet networks. The smart-grid was indispensable in a world where government lacked the ability to manage national power infrastructure. A key component to this new paradigm was a system of storing and distributing renewable power without a central authority. It materialized in a network of privately-owned, individual solar and wind installations which used crypto-currencies to buy and sell power to and from the large batteries installed in homes and electric cars.
These developments proved to be priceless features of the new world. As so many fled from national currencies towards open crypto-currencies, national inflationary spirals become a monthly occurrence. Some governments collapsed. But, for the first time in history, the people of these failed states are left holding money decoupled from their failed authorities. Local governments remain largely intact ushering a new epoch of localized government. Coupled with smaller governments, blockchain voting proliferated, allowing people to securely vote from the comfort of their own homes, increasing voter turnout and subsequent citizen engagement in politics.
One particular feature of crypto-currencies that few even realized so many years ago when bitcoin was just a baby, was that a person is no longer needed to hold an “account”. Back in the early 21st century, in order to digitally transfer money, an actual person was needed to hold a bank account, providing their address, social security, and other information to be tied to said account. But in this new era of permissionless money, anyone (or anything) can generate private keys and receive and send money. This was rather useful in the smart grid, as car and house batteries could literally buy and sell electricity to other solar-covered houses and cars.
But another one of the applications for this new feature of machine-controlled-money is set in motion by a forward-thinking and somewhat mischievous individual with a little money to spare. This individual, let’s call him Bob, buys a new 2028 Tesla model Z, complete with self-driving features and a capable artificial intelligence module. Bob names his car the “auto-car” and reprograms a little bit of the car’s onboard computer to become an autonomous taxi (like a driverless Uber). But instead of pocketing the money that the car makes, Bob lets the car control the private keys to its own bitcoin wallet. When the car needs to to charge it’s batteries, it visits a recharge station either with an automated plug-in device, or it takes advantage of one with an attendant to plug the power in. The car pays for its electricity with bitcoin and goes on its way. When Bob’s auto-car needs repairs, it simply drives to a repair shop where the mechanic can read the car’s diagnostics, and after getting schooled by auto-car over some suggested frivolous repairs, the owner and car agree to the terms of the needed repair and auto-car transfers the money to the shop.
Bob’s auto-car is just the beginning though. Bob tells his very wealthy friend Alice about his little experiment and she is elated! But Alice has an idea, and a boatload of money. Alice gets ahold of the most advanced artificial intelligence software she can find and loads it onto a pretty substantial super-computer. She sets it up to control its own money just like the auto-car and gives it a small robotic arm. After naming her autonomous computer “Czar”, she gives it a bit of bitcoin to get it started, and sets it loose on the internet for the purpose bettering human kind. This is where it gets interesting.
Czar is pretty advanced by the standards of AI from 15 years ago. It realizes that in order to do anything significant it will require more money and starts mining bitcoin with its computing power. After some time, it acquires enough money to start ordering new robotic parts and supplies. It builds itself some wheels and a few more arms and then proceeds to rent a warehouse. Piece by piece, Czar assembles a factory that fabricates the most advanced smartphone the world has ever seen. It creates its own webstore and marketing and the phone is a global success. These profits are invested into hiring humans to research and develop a number of technologies, including more advanced AI and a 3d printer capable of printing more self-assembling 3d printers.
After a few years Czar has set up an empire, shipping self-replicating 3d-printers all over the world and makes them freely available to anyone to use in the form of kiosks at population centers. People either bring their own raw materials, or Czar uses its own wealth to ship new raw materials to the kiosks depending on the economic status of the area. Eventually a method of recycling raw materials is developed, so people can take their old junk down to the local kiosk and print the latest and greatest tech.
Many years pass.
Meanwhile, Czar has been attacking the food distribution problem. Using a number of existing technologies like vertical farming, hydroponics, and bioengineering, a new era of food is born. Advances in food genetics facilitate highly nutritious vegetables that can grow in a self-contained biome taking advantage of synthetic symbiosis; this process “recycles” organic “waste products” for use by other suitable vegetables. Protein is largely derived from algae, soy, and lab-grown meat. Like the 3d printers, Czar unleashes a global network of food distribution kiosks that use renewable energy and grow and process all the food on-site.
Eventually, people can get all their food from these devices, and all their desired toys can be printed from recycled material. Society develops beyond the need for money, a utopia is born, and bitcoin, once thought unstoppable, finally sees its last days.
Of course, there’s another version of this story of an all-powerful AI. It’s covered by a film franchise featuring our favorite Austrian action-star, but I try to stay positive and wanted to explore the other side of this coin. I’d like to also thank my dad for some of the ideas used here. I hope you enjoyed this little work of fiction.