Erik Weijers, 10 days ago
We wrote about it earlier: Jason Lowery believes Bitcoin could become the world's reserve currency and that countries should engage in a peaceful "arms race" to mine Bitcoin. He believes Bitcoin is a form of digital property that will be defended similar to how navies secure maritime thoroughfare. Not everyone is sold on this concept. Let's discuss a contrarian view.
Lowery, a US Air Force member and MIT graduate, thinks Bitcoin goes beyond being a currency: it's a digital space to secure various kinds of data. In a world that has become and will become increasingly 'digitized', he envisions Bitcoin moving from a digital cash system to 'digital warfare', with nations using it to protect their autonomy. Earlier, we wrote about Lowery's Softwar. The antlers on the cover his book are an image for the peaceful nature of this war without bloodshed.
Not everyone is sold on Lowery's concept. Micah Warren, an associate professor at the University of Oregon, thinks Bitcoin mining won't replace traditional warfare. He lays out his view in the short book Limpwar, clearly a reference to Lowery's book.
Warren points out that nation-states aren't forced to participate in Bitcoin mining. Unlike an arms race over real territory, an arms race over blockspace has a different dynamic. To put it in the bluntest way possible: a country can’t fork off land in ‘meat space’. It will have to fight over it or surrender. But a country can fork off their personal version of Bitcoin if it doesn't like its odds in the hash wars. Or simply not use Bitcoin. Or opt for Ethereum.
Warren also gives potential scenarios that could lead to a 'permissioned' form of Bitcoin, moving the protocol away from the permissionless nature we love. Should nations co-opt Bitcoin, it is not untinkable that Bitcoin won't come out unscathed. There will be a lot of pressure from this 'stakeholder system' to morph Bitcoin into something they can work with.
“Disputes happen, wars happen, tension elevates. But this would not escalate in the sense that world powers would be increasing their hashrate to show force, they would be using traditional diplomacy, shoring up alliances, shaking hands, marrying princes to princesses, etc. It’s a political war just like it’s always been, but now any colluding interest with enough hashrate can shut down the blockchain at will.”
Another core point of Warren is that that proof of work, while vital in Bitcoin, isn't necessary for the type of databases that countries have an interest in protecting. Proof of work is an arbitrage mechanism that helps to order a waiting line of new transactions - without needing a central authority. According to Warren, Lowery's thesis that proof of work protects Bitcoin's blockspace is incorrect. Your private keys are protected by cryptography.
Lowery's analogy of Bitcoin mining to antlers as a non-violent way of fighting is tempting. But Warren's critique provides some reality checks: Bitcoin's proof of work isn't an invincible security fence, and the transition from corporate mining to nation-state mining may not be a straight path.
Is this a problem? Probably not because perhaps... just perhaps... Bitcoin's real value lies in being analternative to the problematic fiat system rather than being co-opted by it. There's still plenty of room for 'number to go up' without nation-states fomo'ing in.
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