Will Decentralization Break Us?

Right now, fortunes are being made in the cryptocurrency markets, but this is distracting us from recognizing the long-term effects of decentralization on modern-day society. Whether Bitcoin reaches $100,000, Ethereum becomes top dog, or another unknown successor takes the top spot, does not matter when you consider the bigger picture. Satoshi Nakamoto’s whitepaper will start to transform the world in profound ways that, presently, we can’t comprehend. But what we can say is that it’s about to change a lot more than money.

If you remember why Nakamoto created Bitcoin, it was a quiet protest against government tyranny, a people’s currency invented to eliminate state intervention. Before blockchain existed, governments could ban any medium that created a tool for people to escape financial repression. In 1993, FDR passed Executive Order 6102 which banned citizens from holding gold, forcing them to turn in their gold to the authorities. Previous attempts at digital currencies also failed. e-Gold was a disaster, and Liberty Reserve, which branded itself as a centralized digital currency system, collapsed after authorities shut it down.

But because blockchain is truly decentralized, governments, for the first time ever, have failed to stop the crypto movement from spreading like wildfire. Now that there’s a technology that allows people to bypass the failing legacy system, anything is possible. That’s the difference. This is the game-changer everyone who sees crypto only as a way to get rich keeps missing. The subsequent progression will be the rise of decentralization outside of finance and economics. It’s a concept so contagious that it will start to trickle into the mainstream, transforming multiple industries and power structures.

From remote parts of South America to American metropolises, fully decentralized cities will pop up alongside legacy societies. In fact, this is already happening silently behind the scenes as the number of private cities continues to rise. Sarah Moser, an associate professor of geography at McGill University, has located over 15 private cities plus other areas where public-private partnerships have started development. The most notable example is Songdo in South Korea where real estate giant, Gale International, and construction giant POSCO have built a private city set to house over 130,000 people. While on China’s Danga Bay lies Forest City, the biggest private city in the world, which will eventually house over 700,000 people. Corporations have even jumped on the bandwagon with Google creating a Toronto-based private “smart” city.

In Yuval Harari’s bestselling book, Sapiens, he reminds us that discounting the threat of small but radical concepts and ideas usually makes us look silly in the long run. When Christianity, Islam, and the Bolsheviks were small sects, no one could have predicted that they would shape civilization for centuries to come. We must realize history is chaotic, not deterministic, and any idea could become the new norm.

If so, the manifestation of the centralist-decentralist divide in society will be an extremely slow process. It takes time for crises to develop to invoke significant change. Economy bears Harry Dent and Peter Schiff have been predicting the U.S. Dollar will collapse every year for decades but have been wrong and could be wrong for another era. Not to mention it takes decades to build legacy cities from scratch as China’s ghost cities demonstrate.

Eventually, though, we’ll have to make a decision whether to participate in the legacy system or secure our place in a future private city, depending on our philosophy. We will have to choose between free stuff or freedom. Centralists will live in the legacy system within state walls while decentralists will rush to apply for residency in one of the rising private cities that have a “get government out of the way and let the people prosper” type approach.

Imagine cities that don’t use their host country’s currency but everything is denominated in Bitcoin, Ethereum, or even a city-issued coin. All financial services, insurance, currency exchanges, anything else you can imagine, exist only on the blockchain. No pesky central bank, no annoying central bankers, who think they know better than the market, has the power to set the price of money. Instead, the laws of numbers, maths, and psychics run society. The “digital nomad” movement will become more attractive as you can not only jump from city to city but private city to private city with limited credentials.

Meanwhile, the elites will create their own centralized versions of decentralized systems. But they will only exist inside the legacy system, and the centralists will have to jump on board. If you think China’s social credit system can’t come to the western world, where they digitally punish bad behavior such as jaywalking by deducting your “privileges”, look at some of the latest policies that western world politicians have proposed. Vaccine passports are a gross violation of our human rights, yet many support it.

The rise of private cities and the resulting bifurcation of society is not a certainty but if the financially repressive status quo of rock-bottom interest rates, rampant inflation, and out-of-control money printing continues, it’s unavoidable. In an interview between Marco Wützer — who’s somewhat of a private city thought leader — and investor George Gammon, they say that when it comes to government tyranny, everyone has a limit, a boundary that, if crossed, means that they will leave the country. “People should draw a line in the sand,” Gammon says. “If the government does this, I’m gone.”

The rise of liberation movements — cryptocurrencies, private cities, and civil unrest — is a sign that more and more people have realized the elites will never change the system unless the people take a stand. Why they won’t alter the status quo is up for debate. Maybe they can’t grasp the unfathomable complexity of the modern-day system? Maybe they’re overcome with greed? But what we do know is that the elites in charge will maintain the legacy system if it enriches them — and it does. Those fed up with the old system will have to take matters into their own hands, not through a brutal civil war, but through a civilized, peaceful transition: either fleeing the country or moving to — or into — a private city.

This is the type of crazy reality we’ll have to endure if governments, central banks, and other elitist institutions don’t acknowledge that their policies are slowing creating the catalysts needed to form such a bifurcated world. We need the elites to realize their multi-decade project of suspending economic gravity has failed. We need a financial reset. Will our leaders finally change their minds and try to fix the system instead of propping it up indefinitely? Probably not. After their recent actions and decisions over the past few decades, achieving a soft landing has become a near-impossible task, and that’s perhaps the scariest part of all.