The American Revolution is still being fought, and the Washington-based administrative state is the biggest enemy.
Bitcoin and Blockchain
Bitcoin, the world’s first form of digital cash, is a nascent invention that has overturned centuries of commonly-held assumptions about monetary policy and the role of government in the provision of money. Whereas universities have long taught that money can only be provided by a government that guarantees it and demands its use in taxation, Bitcoin has thrived for eight years without any government backing it, tantalizingly offering a glimpse of a future separation between state and money, starving government of the fuel that powers its totalitarian impulses and warlike tendencies.
In my last article and blog on Bitcoin, I discussed some issues that Bitcoin faced from consolidation and the increasing professionalization of Bitcoin “mining.” These issues may soon be coming to a head in an argument about Bitcoin’s underlying code that offers two divergent paths for the future of Bitcoin – or a third way in which it splits into two separate assets. This possibility is both a serious concern for Bitcoin users and investors.
Those who dream of a world with greater economic freedom have traditionally relied on the pen, the ballot box, and sometimes the sword to effect change. But a relatively new technology called blockchain may make the computer a potent tool to achieve greater liberty.
We have written recently at AIER about how blockchain – and bitcoin, the cryptocurrency that is one early and prominent application of blockchain technology – may be important to the future of money and exchange. In this article, I discuss how in the past few years, the center of gravity of the bitcoin world moved to China and the lessons we can draw from the resulting cycle of consolidation and regulation. This may have important implications for the future of bitcoin, as well as a being a potential challenge to the decentralization that is part of the fundamental appeal of cryptocurrencies.
New technologies that bring major changes to society rarely do so in ways that are straightforward or easy to predict. In a previous article, we described the basics of blockchain technology and how it could enhance and safeguard fundamental economic rights. Viewing adoption of this technology as an inevitable force that will protect civil liberties and reduce government dominance over legal and economic affairs is therefore tempting.
New technology can both disrupt and entrench existing large and powerful players in a market. In a previous article, I explained the importance of blockchain technology. A blockchain is a type of database that is distributed to all users without a centrally managed hub and that stores unalterable digital records. It is most commonly known today as the technology underlying bitcoin, keeping records of the cryptocurrency’s ownership and allowing ownership to be transferred.