As Bitcoin becomes a significant player in the financial world, the next big step is its acceptance by governments. In today’s divided landscape, clear discussions about Bitcoin and its impact on statecraft are crucial.
A new book, National Security In The Digital Age, addresses this topic well. It features chapters from various experts who delve into the unique benefits Bitcoin offers. This makes it a valuable read for lawmakers and policymakers.
We are at a critical point in geopolitics. The dollar system, established in 1973, is facing challenges. Many writers highlight the long-standing dominance of the U.S. dollar and its global implications. After President Nixon took the dollar off the gold standard, the world relied heavily on fiat dollars and U.S. debt. This has shaped the global economy significantly.
However, this shift has led to unexpected outcomes. One major change has been the movement of manufacturing jobs out of the U.S. to a more globally connected economy. China has emerged as a key player, rapidly increasing its capacity to produce military equipment. This development positions China as a near-equal competitor to U.S. military power.
China and Russia are collaborating in various ways. China offers Central Bank Digital Currency (CBDC) and M-Bridge services to counteract U.S. sanctions, while Russia provides military support through private contractors in Africa. The global landscape is shifting, especially as sanctions against Russia take effect. The U.S. dollar's share of foreign reserves is now at a historic low.
Questions arise about whether Tether and U.S.-dollar stablecoins can provide some protection as demand for the dollar increases. Matthew Pines raises this point. Additionally, Robert Malka wonders if Bitcoin can help Middle Eastern countries move away from China. What about Africa, an emerging energy powerhouse? Ben Kincaid explores this topic.
The struggle between techno-authoritarianism and freedom technologies like Bitcoin and Nostr is unfolding across many regions. The first chapter focuses on the Great Power Conflict, particularly how China has leveraged the U.S. monetary system to its advantage. The second chapter looks at Africa and the grassroots adoption of Bitcoin compared to central bank digital currencies like the e-Naira.
Fedimint showcases how the democratic principles of the "African village" can be utilized through peer-to-peer transactions in Bitcoin. Bitcoin mining could also drive energy growth across the continent, as seen in projects like Gridless.
This global conflict reaches the Middle East, where energy powers from the 20th century are exploring new technologies like Bitcoin while trying to maintain political control. The book details how China exports technical standards for mobile Internet and digital authoritarianism worldwide.
Despite these challenges, the United States still has an advantage with the dollar. The book argues that as electricity becomes the dominant force, the U.S. can leverage Bitcoin mining, reassess nuclear power, and implement effective grid management policies to create alternatives.
By embracing freedom technologies like Bitcoin, similar to how the U.S. adopted neutral cryptography and Internet standards, national security interests could be strengthened.
One interesting point is how Bitcoin and related technologies like Nostr create grassroots demand that resists top-down control. This is especially relevant for those looking to mitigate the effects of CBDCs and merchants seeking lower transaction fees. The analysis of China’s Bitcoin mining ban, which hasn’t diminished Bitcoin’s influence, is thoroughly examined in a dedicated chapter.
The book is primarily aimed at policymakers. It weaves sophisticated geopolitical arguments into an accessible overview of Bitcoin's energy dynamics. Specific examples, like how it interacts with ERCOT and stabilizes the Texas grid, are included, along with insights from Pierre Rochard, VP of Research at Riot.
One chapter focuses on "illicit finance," exploring the complexities of Bitcoin's coexistence with traditional financial systems. It discusses how nation-states move money for questionable reasons, contrasting cash's anonymity with Bitcoin's pseudonymous nature.
The book begins with a deep dive into Bitcoin's geopolitics. The middle section is more technical, explaining different facets of Bitcoin, mining, and the Lightning Network, along with various use cases like stabilizing energy grids. Towards the end, it highlights Bitcoin’s potential to create a neutral platform that addresses trust issues, reduces remittance costs, and navigates challenges in healthcare, inflation, and corruption in Africa.
Throughout, the text emphasizes that it’s about Bitcoin, not "crypto." This distinction is made clear from the very first page of the foreword by Dr. Julia Nesheiwat. She explains the differences between proof-of-work and proof-of-stake models, particularly how the Lightning Network works and its policy implications. This stands in stark contrast to the common tendency among policymakers to conflate Bitcoin with cryptocurrency.
This book deeply explores Bitcoin, geopolitics, technology, and the stakes of the 21st century. It raises critical questions about who will drive innovation and benefit as we transition from an oil-driven age to one dominated by electricity and computing. For those interested in the intersection of Bitcoin and geopolitics, National Security in The Digital Age is an essential read.