This post was originally published on HackerNoon, and I'm re-publishing it on here.
Can we predict the future?
Of course not.
Can we understand the socioeconomic forces that shape the future?
Yes, but it requires some digging.
When you parse the historical literature, you find that history gives us many examples of highly-disruptive time periods – commonly called Revolutions. The more examples you dig into, the clearer the patterns become.
This article places Bitcoin in the context of radical paradigm shifts we’ve seen throughout history, uncovers the preconditions that led up to them, and gives us a fresh lens that goes way beyond the asset’s current price.
Trust in our central institutions has a huge leak that can’t be patched
The failures of central institutions have never been more front and center. Never before have so many people been publicly questioning the competency and character of elected officials. It’s too prominent to ignore.
The "core characteristics of historical disruption" – as described by University of Michigan Professor of Greek and Roman History David Potter in his book Disruption: Why Things Change – tend to have the following ingredients:
- Major losses of confidence in a society’s central institutions
- Previously-fringe ideas made their way to the center of the socioeconomic order
- A strong, committed group of leaders driving the change
Let’s apply some historical context to The Peaceful Bitcoin Revolution, shall we?
Constantine’s disruption in ancient Rome
Most people don’t know that Constantine was one of the main drivers of the Roman Empire’s switch to Christianity during the 4th century.
For hundreds of years prior, the empire suffered through episodes of disease, military failures, and devastating inflation. And unsurprisingly, most leaders dealt with these problems by trying to make old, stale systems work better. These centuries of boiling hardship led to a situation that made Rome a fertile ground for socioeconomic disruption:
- Citizens lost their faith in the imperial government
- The previously fringe idea of Christianity made its way to the center of the political order
- Constantine formed a cohesive leadership group that initiated the change to grow their community
Knowing that religious persecution wouldn't work, Constantine incentivized people to change how they think. By introducing Christian ideologies, he opened up paths of advancement to everyone, not just wealthy elites. The idea that anyone, regardless of societal status, could obtain moral improvement in the eyes of God was considered extremely fringe at the time.
In making Christianity front and center, Constantine permanently restructured the empire, and in doing so broke stale ideas about religious authority with a fresh new model that gave the masses the feeling society was evolving towards something better.
But what ultimately set Constantine apart from his predecessors was his abundant clarity on citizen choice. The reason his message resonated so deeply with commoners is that it gave them the decision-making power to opt-in or opt-out.
Martin Luther’s disruption of the Catholic Church kickstarts the Protestant Reformation
Fast forward a little over a millennium later, and Martin Luther is famously hammering his 95 Theses on the door of the church at Wittenberg, Germany. The pages argued that the church’s Catholic teachings and selfish overspending on indulgences were not benefitting the people.
The idea that there was an intellectual world outside the church is what drove the Protestant Reformation to sweep through Europe in the 1500s. Similarly today, Satoshi’s discovery is allowing people to understand that an entire monetary system can exist outside of the state.
The same psychology applies to Roger Banister's breaking of the “Four-Minute Mile Barrier”. After many years of the record being considered “impossible”, it suddenly became possible. Since 1954, thousands of people have run a four-minute mile.
The French Revolution shows us how violent disruptions fail
There is perhaps no better example of a failure to reform than Maximilien Robespierre's Reign of Terror during the French Revolution. His regime's approach was to enforce "virtuous behavior" with the threat of execution via the guillotine. He already made the choice for citizens.
Aside from the violence, Robespierre provided no lasting alternative to the existing system. Contrast this with Bitcoin’s non-violent properties, such as removing the vectors by which governments can enforce more violence on their people by financing wars through inflation.
As governments around the world fail to change themselves to meet new circumstances and propose different versions of the same old, unworkable systems (CBDC pilot projects), it’s Bitcoin’s job to sit there like a rock and continue to offer the world a viable, politically-neutral alternative.
Above all else, choice is what makes Bitcoin highly likely to pan out as a positive disruption
Every successful historical example we've looked at has one common denominator: freedom to choose which side of the disruption you're on.
The stark difference between Constantine and Robespierre, for example, was that the community was given the choice to opt-in or opt-out without punishment. Unlike Robespierre, Constantine obsoleted failing systems and put a stronger structure in their place. Christianity’s introduction to Roman society was largely based on inclusion and education instead of hatred and violence.
The first socioeconomic disruption in history that’s based on lack of trust
As we've seen throughout history, the solution to these losses of faith in centralized institutions has been to place that faith in a different centralized institution. Satoshi used a fundamentally different Game Theory to discover a solution that doesn’t require trust in a central institution to begin with.
Instead of relying on a different crop of fallible humans to enforce the new rules, Bitcoin uses incorruptible distributed software to enforce predetermined consensus parameters. Put simply, Bitcoin is the sound money humanity desperately needs – and that’s it.
Thus, we’re seeing the emergence of a new Anti-Violent Digital Establishment that’s creating a ripe space for Bitcoin to radically redefine the distribution of financial power in our world.
Only time will tell how this unfolds. Fascinating times are ahead of us, that’s for sure.