The Bleak Future of Retirement
For our next thought experiment, lets consider what will happen to Grandma. For her whole life, she has carefully saved her money, and now she is living in reasonable comfort. She gets money and health care from the government, and she has her own savings to fall back on. Grandma has done everything right, including taking her savings out of the stock market; most of her savings are now invested in the safest asset known to man: U.S. Treasury Bonds.
Rather suddenly, things start to go wrong. At the same time all her expenses start skyrocketing, the government has a liquidity crisis; they are having trouble collecting taxes and can no longer pay for her health care. Her savings are still safe in the sense that she will get U.S. Dollars out of them, but that is little comfort when those dollars which should have lasted years can barely pay her weekly grocery bill.
Grandmas retirement has been sabotaged by the rise of a new kind of money that she cant even begin to understand. All she knows is that she did everything right, and now she has nothing.
Well, your grandma may not be at fault here, but on the other hand their generation (or rather the government of their generation) has 'borrowed' money from our generation by putting up a scheme of massive debt, the same debt we now have to pay off, while a lot of us don't have jobs, and the ones who do have jobs are massively underpaid.
So we are pretty much just 'stealing' back what they 'borrowed' from us in the first place. No offense to your grandma, it's not her fault, solely at least.
The Bleak Future Wealth Disparities
All the worlds wealth has essentially been stolen, but by whom? By you, dear reader.
Well be very lucky if we arent all rounded up and summarily executed. Thankfully, youll be able to use some of that money to purchase protection, but Im not at all convinced that it will be enough. A wrathful government backed by an enraged population is a fearful enemy. Satoshi foresaw this long ago, and I doubt he/she/it/they will ever voluntarily come into the light.
If there are enough of us, and we are very careful and charming, we may be physically safe. However, the massive displacement of wealth will still have some awful consequences. People argue all the time about the societal benefits and drawbacks of wealth disparities, and the rise of distributed currencies will create disparities that previously did not seem possible. It seems clear that there will be a lot of jobs created by the new wealthy, but whether the average person is better off or not, one thing is sure to rise: resentment. What right do we have to take all the wealth of the world and put it in our pockets? Sure, a nifty new idea should pay off for early visionaries, but nobody ever expected a new idea to suck all the wealth out of the world like a financial black hole!
Well, yes many will see it like this, and it is somewhat true. Every time someone gains wealth, another persons loses it. But by now pretty much everyone in the world has had the chance to hear about bitcoin, and it's their own responsibility to inform themselves of the scam they are living in.
Bitcoin will hurt a lot of people and it will hurt a lot, probably it will hurt more than it will help, (in the short term at least, things will even out in the long run, if we make it that far). But it's a necessity because the fiat scam will only make things worse in the long run. It's already almost impossible to life normally even in a first world country, let alone in third world countries. And this will only get worse the more the debt increases. Debt to whom? Debt to the 0.1% who have the sole 'right' to print money. Either directly or through loans.
The Bleak Future of Law Enforcement
This is where things get really bleak. Currently distributed currencies facilitate money laundering, black market commerce (the Silk Road), and insider trading (TorBroker). These applications in their current form are just a snowflake on the tip of the iceberg. Not only will they get MUCH bigger, but we will see applications which are much less savory. Historically, the Dark Net accessible by Tor and private networks has been nothing more than a hidey-hole for illegal files and a hangout for paranoid schizophrenics, but it is quickly becoming the platform of choice for large-scale illegal commerce.
For this thought experiment, we will imagine that your child has been kidnapped and put up for sale on TorSlaver. Their business plan is to kidnap children and sell them to the highest bidder, whether parent or pedophile. The winning bidder is sent the location of the child, probably bound and gagged and dumped somewhere. As long as they dont get caught doing the kidnapping, the kidnappers can do this again and again with complete impunity. Once someone proves it can be done, copycats will come out of the woodwork, and it wont matter if the first mover gets caught.
As a parent of three small children, I cannot describe to you how awful this makes me feel. I have always been a very reluctant bitcoin investor, for this very reason. I dont invest in bitcoin because I think it will bring about a happy utopian world. Quite the opposite. I invest in bitcoin because the rise of distributed currency is inevitable, and owning some bitcoins seems to be the best way to prepare for the chaos ahead. And just maybe, if I position myself correctly, I can make things a little less awful.
Some people make me sick, but this might happen indeed and there's little i can think of we can do to prevent it.
The Government Strikes Back
Does anyone really expect the government to sit back quietly and watch while their currency is debased, terrorism is funded, and children are kidnapped? The only question is when and how they will strike back against these forces. While the government does have a lot of options, ultimately those options only slow things down. At some point, we collectively with our governments face a difficult choice between trying to survive this deadly storm or attempting to destroy all decentralized computer networks (including the internet). The former seems unthinkable, the latter, impossible.
I wouldnt be surprised if this chaos gives rise to a strong, centralized, one-world government which gets its revenues by tightly reigning in freedom of commerce in order to collect taxes. For instance, I will not be surprised to see a requirement someday that every person buying or selling have an implant which tightly binds their identity to the sale. Perhaps the implant will even be located on the back of the right hand or the forehead! This may seem repugnant to you now, but wait until you have lived in the storm for a while before you call it impossible. The natural reaction to the deadly chaos of decentralized currency is for the populace to embrace increasingly centralized controls on commerce. The battle lines are only just starting to be drawn, and your guess is as good as mine for how it will play out.
I'm sure you're referring to the biblical prophecy in revelations. I'm not so sure the prophecy will be fulfilled this literally, especially because revelations in particular is a very symbolic book. But on the other hand, I wouldn't be too surprised if it happens. I would most likely resist such marks even if that means I will not be able to buy anything at all (even though at that point I'd be richer than most people on the earth). I'll just know that it's a sure sign that the prophecy is nearing fulfillment and the whole world as we know it will end soon by divine intervention. And the world will finally be cured from it's maddening sickness and corruption. It will be very tough, but it will only be tough for a short while.
What Should We Do?We need people thinking about this. Ill admit that many of the things I wrote about may not happen at all, or may happen very differently than I imagine. However, there are lots of people touting the fantastic benefits that bitcoin and its children can give us, and I dont see anybody talking about how bad things could potentially get.
We need solutions. When the government finally starts taking decentralized currency seriously, it will probably be doing so in a state of panic. We need to be advising governments
now about how they can survive the storm and protect their populace. We need to think of ways the government can pay for its most critical operations, and what legislation makes sense to mitigate these new risks while preserving as much freedom as we can.
The Lifeboat Foundation is attempting to provide this thinking, advice, and solutions. They are already getting ready for a new advisory board, culled from computer scientists, economists, and bitcoin experts. If you make a fortune from your investments in decentralized currency, I urge you to consider how you can help all the people harmed by these rapid changes. Many bitcoin enthusiasts seem to think they will get to retire on a private island with a harem and a stable of Italian sports cars. This is wrong. Bitcoin investors need to someday become bitcoin philanthropists, and our giving needs to be targeted at helping all the people we have harmed. The Lifeboat Foundation is one option, but Im sure there will be others.
I first published this article on the blog of the Lifeboat Foundation:
http://lifeboat.com/blog/2013/04/bitcoins-dystopian-futureReddit version is here:
http://www.reddit.com/r/Bitcoin/comments/1cos8x/bitcoins_dystopian_future/tl;dr: Wildly successful distributed currencies could hurt a lot of people.
I agree that it is likely that in case of a major wealth transfer, possible a transfer the world has never seen in the entire history of mankind, things will not go smoothly.
We'll be rich alright, but the world will most likely be in great chaos and many of them will hate us even more than they hate the bankers now. We may even have to fear for our lives.