Annihilation commencing. Whether through poorly conceived boot up instructions to a novel AI, a global war between desperate nation states, or the final rug pull of our fragile ozone layer – the end of the world hasn’t felt this tangible since school children ducked and covered under desks in the nuclear psychic ashes of the post-WW2 era. Eschatological preachers now claim the end times without needing the Mayan calendar on hand to back them up, with the Covid pandemic still a livid scar on the fragile socially-driven economies that make up our global village.
When everything is gone, what will remain? For doomsday preppers, tech enthusiasts, and hedge fund managers making the biggest hedge of all – the answer is crypto, in particular Bitcoin, with its time-tested Proof of Work (PoW) economics. But why? Why in a world of scavengers and sawn-off shotguns would the world’s largest decentralised ledger have any use at all? The answer breaks down into two parts: what Bitcoin is, and what it has gone on to narratively represent in the global economic consciousness.
Bitcoin, to date, has performed excellently in the face of macro-economic squalls. Its birth, remember, was the result of a crisis. Nakamoto’s original zeal was born out of the horror felt seeing state treasuries around the world, following the UK Chancellor Alistair Darling’s lead, massively devaluing their fiat currencies in order to plug the liquidity crisis in the global banking system – and in doing so, playing god with the value distribution among the societies they were elected to lead.
The average citizen saw their life savings reduced dramatically to cover the losses of the irresponsible and the criminal. A system the public had played along with, and paid into, was altered to maintain the status quo and entrench wealth inequality in every aspect of society. Bitcoin has always been, in effect, an alternative to ‘when things go wrong’.
And so it has continued to prove. In Venezuela, Zimbabwe and Turkey, whose economies and national currencies continue to struggle, crypto ownership is on the rise. In Russia and Ukraine, where war rages, crypto is seen as a safe haven. In both cases, Bitcoin is a global asset, supported by a network that reaches far beyond any locality, even one the size of a country. Crypto’s most recent bull run happened against the backdrop of a global pandemic. If a pillar in the current system fails, Bitcoin rises on the back of it. It currently sits pretty as the ultimate ‘out of context’ asset, a decentralised, deracinated system that works no matter what happens in a country. Should a state’s central systems architecture suffer a cyberattack, the ledger still runs. If global warming floods a nation’s land, destroying its economy, value held in BTC by its citizens will remain. And if a country rampantly inflates its currency to protect its merchant class…oh wait, that one already happened. Bitcoin will always function and have value, oftentimes regardless of which government rises and falls and – crucially – irrespective of how cold they are towards it. Then again, if the immense industrial power of the United States was ploughed into upkeep of the Bitcoin ledger – this changes things. The brute hash force an entity like the U.S could bring to bear if committed would very quickly upend the current Bitcoin dynamic, and force others to participate for fear of them seizing the network for themselves.
Bitcoin’s censorship resistance and pseudonymous security means that as an exchange of value, it remains viable even if a dictatorship were to rise and attempt to stamp it out or seize control. There is nothing a small nation state could do to affect the global integrity of the network, but a fast acting U.S or China with its energy reserves intact could threaten the network without adequate competition – competition that would be sorely lacking in the result of a massive network disruption event. Despite BTC’s global network status, nodes are still far too heavily concentrated in specific areas of the world and held by too few operators, and if one major miner survives and the rest don’t – total seizure of the network is on the table, albeit the inevitable hard fork designed to maintain the time-space continuum of the ledger.
Even in total blackout, however, as long as a few nodes exist somewhere, the network will sustain. It might require a hard fork to reduce difficulty (the original BTC timeline conceived with Moore’s law fully in mind and probably not expecting computing power to fall), but even in the event of a truly global apocalypse – the Bitcoin network should survive. With the use of the Bitcoin satellite network, SMS services being developed, even radio, plus the ability to make offline transactions – even internet outage wouldn’t spell the death of the ledger. Certainly not any more than it would spell the death of every major banking and financial institution.
A risk remains, however, of forks emanating from areas isolated from global telecommunications that results in a splintered network. Antarctica’s ledger, say, may begin to diverge significantly from the rest of the world through lack of global participation – but at least it would still work temporarily for the people living there. This fungibility, malleability, resistance, permanence and privacy is what made many early crypto users ‘cypherpunks’, believers in alternate anarchist structures fused with a libertarian ethos. Self-custody of your beans, your Bitcoin and your guns. Take it from me.
PoW has drawbacks (some readers will drawl wryly about how energy usage by Bitcoin miners will cause the climate catastrophe in the first place), but its resistance to ex-mural shocks still make it king. As BTC becomes more ensconced in the TradFi system, effective legislation can offset the most deleterious effects of excessive energy consumption. Proof of Stake (PoS) has a crucial weakness in the face of an apocalyptic event – the entrenched systems that support it may break entirely.
PoS requires an ordered world of stakeholders voting to a precise regimen. If 60% of your network holders and validators evaporate under the crimson fire of a hydrogen bomb, some networks may not even be able to reach a plurality in the first place, even to change the regimen – rendering it worthless. Or, the network may become so vulnerable to economic attack it loses its meaning entirely. Many PoS networks rely on economic infeasibility to attack it, something meaningless in an apocalypse scenario. BTC just needs a few computers fighting over the protocol and the system still works as well as it ever did, albeit with a need to grow. PoS requires a structured wealth owning democracy, Bitcoin does not.
So, buy Bitcoin and hide in a basement until it’s the only currency left? Well, not quite – despite its obvious status as the ultimate hedge against disaster alongside gold, the digital version of a golden tooth for a rainy day, would-be preppers shouldn’t dream of calamity too quickly. Global adoption for BTC is still low, even in developed countries like the UK, where only 6.1% of Brits reportedly have experience with the on-chain realm. If people don’t want BTC now, then why would they want it when the world ends? The network as a whole needs to experience substantial growth and adoption – even if explicitly in the general public consciousness alone – for it to act as a failsafe currency.
Self-custody in a world without police forces and national militaries will indeed revert the world to be wary of highwaymen, wielding wrenches and looking to pull out your golden digital tooth – by force if necessary. Alternatively, no one will care about your keys – they’ll want your canned tuna more than they’ll want a USB with a string of ‘meaningless’ ciphers.
Yet, for all that, the narrative persists. In a world of all-too-physical attack vectors, the decentralised digitised ephemerality of the blockchain makes it uniquely resistant to a global catastrophe. Yes, should an asteroid come knocking, and all that’s left is cellular life – the ledger will fail. Yet as long as a few pockets of humanity survive, upkeeping the ledger may be the best chance of holding onto some remnants of an order and hierarchy without resorting to brute force.
Bitcoin’s cradle was visited by the wise men of anarchy ethics, and its early adopters were almost exclusively those with an anti-societal, libertarian, doomsday leaning view – so it’s no shock to see that ethos sustain right up into the present day, even as Bitcoin is being welcomed into the TradFi world as the 13th asset class of the S&P index, and currently being tarted up by ETFs to be sold into the pension schemes of municipal governments. The fact remains that Bitcoin is a hedge against anything and everything – even the very end.
If it truly is the apocalypse now, it won’t be the apocalypse for PoW.
This is a guest post by Daniel Dob. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.