Chapter 16: Blockchain, The New Geopolitical Arms Race
The last chapter focused mainly on the origins and long-term impacts of unbacked fiat currency policies, especially at a domestic level. We left one fundamental question unaddressed: the international aspect of finance and the role that finance, economics, and financial technology play in the competition between states for scarce resources.
This competition is a contest that involves both attack and defense, and blockchain fits into both sides of this equation. As states seek to wall off their economies, intellectual property, and spheres of influence, they will require more secure internet and banking infrastructure. As countries seek to explore new monetary policies in a world with negative global interest rates, blockchain will fit into how states (and companies) evolve their financial systems.
The individual gets a vote too, and blockchain also changes the classical equation in this contest, since it adds personal sovereignty and freedom to those who get caught in the crossfire between governments and large corporations - a first in human history.
As we covered above, central banks evolved as a policy response to competition between countries, especially for use in wars. Throughout modern history, central banks have been instruments of state power that have facilitated borrowing from the future to survive the demands of the present. Fiat systems have also mutated to serve present-day consumption and political patronage networks over and above the long-term national interest, often subsidizing private industries and special interests.
Democratic countries who embrace blockchain and strong encryption for the right applications will be able to maintain their edge. Those that don't, won't. This chapter outlines strategies for the next geoeconomic arms race...
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