Cryptocurrencies as international rights guarantors
I.
Bitcoin’s Genesis block contains the following text:
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks,” referring to a headline on the front page:
Strikingly, over the last decade, many have assumed this to be Satoshi's commentary on the dangers of fractional reserve banking in traditional finance, making it their goal to rebuild modern finance from the ground up through Proof of Work algorithms and decentralization.
Yet, today, an even more prescient coincidence is that a big area of The Times’s front page is actually about Israel getting ready to invade Gaza, a circumstance we know today as being maximally destructive to Gazan lives and property.
But 14 years after Satoshi’s mining of the Genesis block, a vision has materialized that few still dare to fully understand, namely that much more reliable than spontaneously formed local governments, cryptocurrencies like Ethereum and Bitcoin are newly emergent global rights guarantors for private property.
II.
In first-world Western circles, cryptocurrencies are not seen as a new form of digital, international rights layer as Westerners buy Bitcoin and Ethereum mostly as a “high risk, high reward” startup bet, similar to how they buy Uber or Airbnb stocks.
The thesis behind these investments is that these companies still have growth potential relative to their price and that by capturing more market share, the investment can generate higher cash flow, increasing the investor's extractable value and, hence, the stock price.
While this is certainly a valid form of investment that surely makes some money, it also, however, never considers cryptocurrencies’ usefulness in places where basic human rights aren’t continuously upheld by stable and liberal governments.
At the same time, when Americans and Europeans build crypto consumer applications with the aim of capturing more monetizable eyeballs and leading users into spending more money on their products, cryptocurrencies are not used to play their strengths of being maximally defensible as the private property of the self-sovereign individual.
Rather, here, Bitcoin and Ethereum are merely being used as a lighter-hurdle form of an online payment mechanism. In this way, however, Westerners will fail to see the one amazing human rights-preserving use case cryptocurrencies can have: to be a crisis-resilient global private property.
III.
Cryptocurrencies implicitly implement a maximal version of internationally executable private property. Similar to how the United States has very strong “freedom-maximizing” free speech laws, cryptocurrencies have “freedom-maximizing” private property implementations.
Once held in self-custody, Ethereum and Bitcoin cannot easily be seized by governments. Their custody cannot be traced when crossing borders, but their respective fiat value can be redeemed in safety and on par with their acquisition cost, for example, through stablecoins.
For war-struck citizens of governments that fail to protect their private property, cryptocurrencies can even be stored in a person’s brain or by decentralizing their ownership among a family or group of friends, a property hardly achievable with other, more traditional stores of value.
Cryptocurrencies don’t need the goodwill of the local government or that of the invader. They aren’t (necessarily) destructible by bombs, fire (if done right), or other disasters caused or not prevented by local governments.
They’re easily accessible and obtainable by any human globally, as someone’s heritage or nationality is not an account-creation requirement, as is with many bank accounts or other stores of value. Smartphones are cheap.
Cryptocurrencies aren’t easily shut down by adversaries. Their constant technical innovation in distributed systems engineering has kept networks like Bitcoin and Ethereum up and running for decades.
IV.
Cryptocurrencies like Bitcoin and Ethereum are newly emerging global rights guarantors for private property. They have carved out a unique niche in ownership for those in dire need of lightweight, safe, and globally liquid stores of value and media of exchange.
They are usable despite failing governments and wars. They continue to work precisely because they have not been built on the wet code trust assumptions of traditional institutions but because they’re conceived as closed-loop digital substitutes.
Prescient as he seems today, Satoshi realized the usefulness of Bitcoin as a guarantor for international private property in a war-stricken place like Gaza when reading The Times on January 3, 2009.
I hope we can all be inspired by his actions and not stop at building private property as a closed-loop digital system. Cryptocurrency technology has many exciting and world changing use cases it could also serve, such as the dream of a truly free social network, a perfectly private digital currency, and many other, not even dreamed-up yet use cases. Let’s build them!
Thanks to Emre Ekinci and Galen, who I had conversations with that led me to have this idea.