Bitcoins Will Change the Power Dynamics of the World | Longform

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Bitcoins Will Change the Power Dynamics of the World | Longform

Power Dynamics is comprised of three elements — Authority, Information & Money.

Anatomy of Power DynamicsAnatomy of Power Dynamics

The three elements of power dynamics just mentioned are often interrelated. Achieving any one of the three brings the other two closer.

The President has authority. The Governments have information. Google has information and hence money. Richard Branson and Mark Cuban have money, hence authority. It is often interesting to see the world through the power dynamics lens. For the reader willing to develop the skill of Power Spotting, here is a video I recommend.

The power dynamics have been institutionalised, regulated and controlled in most of our current economies (and sometimes by religions). Note that I say economies, and not countries. The economies may follow democracy, communism, socialism or be lead by a King, Queen or the Top Commander of the Militia. In each case the Authority, Information and Money (a.k.a. Power) is distributed among the people in their own accepted ways. But the power dynamics exist nonetheless.

So What Is A Government Made Of?

Any form of government usually has three functions

Governments are just like Bitcoins — the value is secure until the point when Humans stop believing in the system.

It is really that simple. As Paul Krugman famously put it, government is essentially “An Insurance Company With An Army” [sic]. Governments are imaginary constructs that we have faith in. Governments are just like Bitcoins — the value is secure until the point when Humans stop believing in the system. This explains the various ‘Springs’; just the way the Bitcoin prices fluctuate. The power dynamics are very similar in both cases.

The Changing Power Dynamics of the Past

Let’t take a walk from the Agricultural Economy to the Digital Economy. 

There was a nomadic population called Humans who used to hunt to feed themselves. Then they started growing their own food — we entered the Agricultural Economy. Growing food as an economic activity consumes a lot of time. People then worked for about 12 hours a day. Then came the Industrial Economy. We got machines that could do more than 50% (e.g Tillers and typewriters) of what we could do, thereby saving about 50% of time. People then used to work 7-9 hours a day. As the Industrial economy progressed, the hours of work reduced (considerably). Then we had a lot of spare time and we entered the Post-Industrial Economy.

We got spare time to do other things, like buying coffee from Starbucks (we don’t have to grow coffee ourselves anymore) or eat from McDonalds (we don’t have to hunt those cows anymore). We entered the Experience economy — the one in which we are partially in now. Then came Internet and computers.

Enter the Information Economy. This changed everything. A single tweet could start a movement. Social media could raise millions of dollars for charitable causes, from around the world.

The Power Dynamics Changes — Explained

Cryptocurrencies — The Democracy of Computers

I take a moment to appreciate your attention span, for having read this far. Did you know that only 10% of readers make it till here? Thank you, but good choice. 

Then the Cryptocurrencies entered the World. Here is the interesting part about the cryptocurrencies, especially Bitcoins. I leave it to your imagination to connect the dots to see the shifting Power Dynamics in your mind’s eye.

Now imagine a world, where the currencies are digital and anonymous. Where the civilisation functions on perfect information, part of which is automated (as humans can’t handle it). There is a democracy of computers. So humanity eventually enters the post-democracy society — where voting does’t  count or matter, as there is no representation required.

  1. We only need representation in a system of power dynamics where the flow of information is asymmetric.
  2. We only need governments in the place where the distribution of authority is asymmetric [Read: not flat].
  3. We only need fiat currencies in the place where the money has to be monitored, to accumulate the power and information.

Cryptocurrencies, fortunately or unfortunately, are here to stay. There are here to disrupt the old ways of power concentration. They are here to change the Power Dynamics of the World. Whether we like it or not.

And please do not bring up the illegal usage of Bitcoins into this conversation — I have already written about that in the past concluding decisively that the de-facto modus operandi of illegal trade up until this point has been with the consent of fiat currencies. So don’t blame this on the Bitcoins, rather find those people!

To all the skeptics and critics who are reading this post, consider the following —You don’t have to pay taxes. The pie is yours.  

Finally, Consider This.

We are in the knowledge economy, selling our brains (decisions) for money & getting paid through a process beyond our control. Through intermediaries and banks that are made of people just like us, selling their brains for a different reason to make their money. It’s predatory.

And you thought we stopped hunting for our food ever since we entered the agricultural economy?

Image Credit: Ram N (author), using But Feel Free to Share.