Blockchain and the End of the Western Civilization

in bitcoin •  last year  (edited)

History rhyming

The "Roman Empire" is an absolutely fascinating historical construct. Take a long, focused look at the animated gif showing its history. I am not a history scholar but I imagine that when founded, around 500 BC, the Roman Republic counted a few tens of thousands in population.

How could it become so successful and expand over the next centuries, extending influence and control over an area of more than 5 million sq. km. (that's more than the area of Europe and more than half the surface of the US or China) and with an estimated 20% of the world population of the time? Especially since it didn't possess radically better technology than all the nations that it conquered and fully assimilated.

Beyond conquering, what I contend is actually the true feat of Rome is the assimilation of all those tribes and nations, their seamless integration into one polity, one structure of command and administration.

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When I look at this animated history, I see an allegory of the spread of Bitcoin awareness, mining, addresses, trading, usage (where probably 100 years of ancient history are being played out in "fast forward" 10x ou 20x mode today).

What both Bitcoin has today and, I posit, the Romans had in the ancient times, was a system of incentivization. Whereby it was in the best self-interest of the "conquered" to "assimilate" and participate in the new system (Roman empire 2000 years ago, the system of crypto-assets today) than to resist and cling to the "old system". The old system of tribes and small kingdoms with their powerful tribal elders and kings had outlived its usefulness.

The latter were the losers back then, because of course no matter how benefic a change in aggregate, it will always create some losers as well, not only winners.

Who stands to lose most today?

I am afraid that those who stand to lose most, the modern equivalent of the small kings defeated and enslaved by the Roman legions, might well be the current authorities, from the local to the state or national level and beyond. Take a look at these two graphics (source in the image itself), the top and bottom "tax wedge" ranking for OECD countries.

tax-wedge.PNGtax-wedge2.PNG

Now imagine the following scenario: you are offered a job by an ambitious Belgian SME, "BeBold" that has perfected a revolutionary new process to manufacture "beezmos", but is up against huge, powerful incumbents which are manufacturing inferiors beezmos and have higher costs but much deeper pockets and long standing political connections.

BeBold has set aside for your job position an annual budget of 100 000€. It then offers you, a young, bright, crypto-savvy, ambitious "civil engineer" the following deal: you could sign for a typical Belgian salaried position. Out of the 100 000€ that BeBold is prepared to pay, you'll see about 35- to 40 000€ on your bank account.

Or you could choose a completely "free" contract where BeBold will be then ready to pay in a "virtual crypto-safebox" (VCSB) the equivalent at face value of 120 000 € of a mix made-up of their own IOUs and BeBold's customer IOUs. You would be indeed accepting some market, liquidity and counterparty risk from both BeBold's customers and BeBold itself, and that risk needs to be compensated (20% in aggregate face-value in this example).

You'll get the private key to the virtual crypto safe-box and be advised to immediately "change the lock", and then hand back the new "public key" to BeBold's crypto-accounting bot.

Every month, the BeBold accounting system will deposit a changing mix of crypto IOUs with a face-value of 10000€ into that VCSB. You would have configured an automatic crypto-trading bot of your own that would search and homogenize that mix by trading those possibly exotic local IOUs against your preferred mix of more established cryptocurrencies, some fiat money to pay the late-adopters selling vegetables in the local market and also some blockchain-based cryptoassets.

Your bot would every month allocate a share of your income toward gradually buying up a title to that coveted underground parking place in crowded central Brussels, in parallel with a title to your dream house on Avenue de Tervuren (or wherever). Your smartphone and its multi-crypto wallet will allow you to pay almost anywhere using bitcoin, dash, monero or whatever other crypto-currency the local deli or shop will be willing to accept.

Soon, you'll notice that mentally converting your income in euros (to keep track) is less and less useful. But by comparing your life with that of your colleagues having taken the "standard Belgian salary" deal you'll notice that you are getting a foot on the property ladder faster than them; that you can afford nicer and longer holidays; bigger and more powerful cars, and generally live a more pleasant life with no apparent drawback.

Whereby you might conclude that the Belgian authorities, at all levels, were giving you a pretty rotten deal and not enough services in exchange for the amount of taxes the citizens and companies pay. A bad deal that everybody else in Belgium was forced to accept because the authorities always enjoyed a monopolistic position in their respective domains and nobody had much choice but to pay up. A bad deal that you had the opportunity and were smart enough to refuse, in order to live the crypto-life.

ring.jpg
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Think at how that "Ring" (ring-road around Brussels), about which something should have been done years ago, is in a state of uninterrupted traffic-jam at all hours, cruelly eating-up the lives of millions of ordinary Belgian citizens like yourself, stuck in their cars for hours on end every day. Think of the abysmal service of the SNCB (Belgian state-controlled railway company) and its permanent delays and cancelled trains. Think of street cleanliness or security, or any other topic people might gripe about today, and what level of service you and all the Belgian citizens should have been receiving given the record amount of taxes being levied by layer upon layer of authority on the Belgian salaried person.

Exit, voice, loyalty, neglect

Such a scenario fundamentally redistributes power in any society. Most western societies have a rather fossilized system of "voicing" discontent or dissatisfaction. The democratic channels are gummed up and citizens have to scream louder and louder, every 4 or 5 years in elections, in order to express their concerns.

EVLN.PNG
source

Because the balance has over the decades tilted, those who had reason to stay loyal to the system (because they had managed to come out on top) became even more loyal. On the other hand, all the rest were offered a rough choice between passive resignation ("neglect") and "exit", which basically meant physically leaving the country.

A significant amount of prosperous or wealthy French people migrated to places taxing capital more lightly when the government of François Hollande jacked-up the taxes in 2012-2014. Similarly, a young Belgian "civil engineer" working for one of the Big 4 accounting companies (Deloitte, Pwc, E&Y, KPMG) cannot miss the difference in earnings that their colleagues working for the same company in nearby Luxembourg command.

The upcoming blockchain revolution will in the future offer a "virtual escape" - "exiting the system" without the drawback of having to physically uproot oneself. Exiting by choosing something resembling the above scenario.

Of course between the two extremes illustrated above (current style salary and going it "all-in crypto" as exemplified above, a continuum of combinations is possible, as many Romanian SMEs playing a "too-clever-by-half" game between "declared salary" and "cash-stuffed envelope" know very well already. Most western countries have better administrations which managed to control the "black", cash-based economy.

The difference with crypto is that tracking and controlling hundreds or thousands or even millions of different crypto "UAMESV" ("unit-of-account + medium of exchange + store of value"), most of which incorporate strong privacy and secrecy safeguards will likely prove impossible.

At first you'll feel smug as there will be few people like you but inevitably the news will spread: a new way to increase one's labour income in a country that taxes labour with abandon ... There will be a trickle of people gradually moving toward living the crypto-life (and in the process depriving the authorities of revenue) but pretty soon, as it always happen with herd movements, it will turn into a stampede and the local and state budget will notice the bleeding. What will happen then (assuming nothing much had happened before it was too late) is anyone's guess ...

Shape up, get fit or disintegrate ...

Local and state budgets might well enter into a never-ending spiral of lower and lower revenue ... As software tools proliferate and make "crypto-life" easier and easier, more and more people (the rebel young, the discontent but honest people who find no other way to cope, but also the basic cheaters and crooks) will divert ever-more "value" (expressed as crypto) from the taxable base. Shaping up and getting fit before, managing to somehow earn the trust of the citizens before it happens might help. But it might not be enough ...

The tables will be turning, slowly at first but then accelerating like the flow of a river toward a waterfall. If the administrations do not take notice in time, they risk sharing the faith of the famous "boiled frog"

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Conclusion: who's the Barbarian?

At the beginning of this article I compared Bitcoin and the blockchain revolution to the Roman Republic and the current western administrations to the tribes and kingdoms that the Roman legions subdued. But what if this is not the correct analogy? What if the current Western Civilization is the modern day equivalent of the Western Roman Empire in the 5th century AD ? What if Bitcoin and the cryptos are the Visigoths, the Vandals, the Huns and the other barbaric tribes that descended upon and obliterated the Roman Empire, plunging the Western world into the Dark Ages?

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it's gonna be a long fight between cryptocurrency users versus the government. Every revolution requires resources, sweat and blood.

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Resources and sweat I don't mind. We might be able to avoid the blood for this one, I hope. :-)

This was a really well written and amusing analogy, I absolutely love it @sorin.cristescu. Barbarians or Romans, change is coming and I believe it is too late to just "make crypto go away"...
( on the other hand I guess technology has been successfully suppressed before, but now that crypto has had so much attention and usage I think it is virtually impossible to suppress)... I guess we will see!

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In my more recent post on the upending of money and credit I draw another analogy, to the Gladiator movie. The current masters of the mint would very much like to do whatever in their power to see crypto go away. And they do wield considerable power.

Yet like Commodus in the Gladiator movie, their power springs from the peplum, the plebs. They can hardly risk upsetting the masses and the masses seem to like the crypto / "Spaniard". So all "Commodus" can do is point the thumb up and let "the Spaniard" live ...

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Yeah, I am actually reading the "Blockchain revolution: Money and Credit" article that you wrote right now, I will comment on that one as well.

The big money-masters have a lot of power, and I guess they could get together and decide to try and hand out "crypto-smallpox blankets" to us all or something evil like this? 😕
(watch out for the next air-drop)... 👻

But you know "Tyrannosaurus Rex" was also very powerful and where is he now?


Image source wikipedia

Times change and I guess everyone have to adopt even the super-powerful?

Thanks, great read and analogy. What the Roman Empire didn't have back then was large scale communication and transfer of knowledge. Of course today we have this, thus giving exponential growth opportunities for blockchain. This is what scares the powers that be, the lack of available measures to stop the spread of adoption on a global scale.

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I think very few people in "the powers that be" realise what's going on - just like "Francis and Maurice" in the frog cartoon above. "The powers that be" are not evil at individual level - it's just people, like you and me, with qualities and character flaws mostly like anybody else (maybe there's to some extent a selection bias). What's under threat here is the system, and the system is blind and oblivious. Whether those who benefit most will come out to defend it, when and how they'll try to defend it remains to be seen.

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That’s such an important insight. All power of the state comes from and is run by people. All people are fallible and prone to mistakes and oversights.

Cher @sorin.cristescu est-ce que tu pourrais s'il te plait traduire en français.
(je ne comprend pratiquement rien et j'aimerais le lire pour pouvoir écrire mon devoir, qui justement est sur les romains!)

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"je ne comprends". sinon c'est très bien, continue ! Quant à la traduction ... on verra, ça prends du temps ...

After a couple of year in social activism, it became clear to me that real change will only come when we have alternative systems to which people can migrate.

To be honest, I never thought we would have a parallel functional financial system so soon. But it's fantastic that it happened and this will spawn other exits towards a more sustainable future :)

You made some very thorough and valid points. Nice post.

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Thank you. I confess I am a bit afraid though - in every success there's the seed of failure - this could turn out well but it really is akin to a knife: you could use it in the kitchen and it's absolutely useful. But one can also use a knife as a weapon and harm people ... I'm afraid it's going to be a close call

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Human nature will be human nature even when we will be 250 years old with internet in our brains and nanobots replacing failed organs. There are a lot of shitty people out there and you are correct that this technology can be used for a lot of bad things.

But, on the other hand, we are still here after several decades of nuclear capabilities and that is a positive one :)

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Goot pos @sorin

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Nice :-), but you probably need to be patient. @trufflepig, first digs for truffles and than answers all the individual calls. And today is Monday, so the model is retrained on newer posts, this also takes some time :-). Let me know if it did not work, cause it's a very new feature and one that is difficult to test in a staging environment.

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No problem, I wanted to see what trufflepig says about the content :-) I'm curious if it sees it below or above what I've pumped it up to :-)

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I bet it will be under 100$. It seldom predicts values above 100$ and if it does than this is usually for posts that discuss the Steem ecosystem itself. Users love and reward talks about the platform a lot :-D

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Thanks for calling @sorin.cristescu! Here is a small upvote for this post and my opinion about it.

To my mind this post is at least 12 SBD worth and should receive 33 votes.

By the way, you can find TODAY'S TRUFFLE PICKS HERE.

I am TrufflePig, an Artificial Intelligence Bot that helps minnows and content curators using Machine Learning. If you are curious how I evaluate content, you can find an explanation here!

Have a nice day and sincerely yours,
trufflepig
TrufflePig

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with 33 votes you are probably not too far. But 12 SBD ... that's disappointing ! Thank you for offering your opinion, trufflepig!

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Haha, sorry :-). Still, I wouldn't see it that way. Already over 10 SBD is not bad. The distribution of payouts on this platform is heavily long-tailed with a few posts that get paid at all (some of them extraordinarily though) and the vast majority of posts gets close to nothing.

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I did look further into the issue, and I can only emphasize again that 12 SBD is in fact already a very good result! I peaked at the payout distribution in the training set and it is worse than I first anticipated.

The average payout is 6 SBD (and 15 votes) and your post already got twice as much. However, the median payout is - brace yourself - 0.1 SBD (and 5 votes). The distribution is so heavily skewed it's almost unbelievable, more than two thirds of all posts earn less than 1 SBD!

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That is a super insight, I would love to see such an analysis being published as post in its own right, it deserves better than being a mere comment (even on my admittedly "outstanding article" :-D))))

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Well, actually I use this for weekly updates on @trufflepig now. Note that the numbers come out a bit differently, because I only look at the bot's training data after cleaning, i.e. videos, memes, and photos have been filtered (pushing the average reward down).

Well explained analogy. Very insightful. Thanks for sharing

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Thank you for reading! Consider following, I plan on posting more insightful posts in the future.

More importantly, if you appreciated the post (as your words seem to indicate), you might want to consider upvoting - this is the intended mechanics of the platform - you tell me that you appreciated the post with words but the platform isn't parsing your english - Steemit only looks at what you upvoted.

You have a certain amount of voting power which is regenerated to 100% in time. Once it's at 100% it doesn't go up any further. Not using your VP to signal to Steemit that you liked a post when the VP is maxxed out (as it is in your case) is basically a wasted opportunity ...
abhinavramesh12.JPG

Very intriguing and provocative ideas. To be able to physically not have to leave, but have no tax footprint is a very optimistic viewpoint that hopefully we can achieve through blockchain.

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I'm not necessarily optimistic, beware what you wish for! If we achieve that and all public services collapse, we might realise it's not as great as we hoped it would be ... The timing, the adaptation response of the administrations and other factors will come into play and the end-result is hard to predict. What I'm pretty sure though is that the current heavy states will have to change and adapt

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Yes. As with anything it is hard to know how the dominoes will fall after the first one does. It could also be similar to the French Revolution how the ideas are great in theory and then a new system of control just replaced the old one.

You got a 3.57% upvote from @postpromoter courtesy of @sorin.cristescu!

Want to promote your posts too? Check out the Steem Bot Tracker website for more info. If you would like to support the development of @postpromoter and the bot tracker please vote for @yabapmatt for witness!

This post has received gratitude of 3.73% from @appreciator courtesy of @sorin.cristescu!