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If all the world had decentralized crypto for money, and if title to nearly all assets were traded via decentralized blockchains, there would be far less war. This is true for many reasons.

  • First, it’s much, much harder to fund war when you can’t inflate or debase the currency, something that would be impossible in the hypothesized blockchain world.
  • Second, the incentive for war would be much, much lower for two reasons. For one, there would be far fewer assets for governments to pillage. Why? Because pillaging blockchain-traded assets is orders of magnitude more difficult than pillaging other types of assets. This is especially true once governments are removed from the “title” business, as they would be in such a world.

Let’s use Cuba as an example. One of the first things that Castro did after seizing power through war was to destroy the property records. By doing so nobody could easily prove or assert any claims to “nationalized” property. All future title to property would originate from and would only be traceable back to records created by the new communist government.

That trick would be extremely difficult if not impossible to accomplish in a world where title to property is transferred via decentralized worldwide blockchains. Quite simply, the property records could not be destroyed.

Sure, via military force Castro could exercise dominion over the property for as long as he could hold it, and he could distribute that dominion among his cronies or others however he saw fit, but legal title would still reside with the owner noted in the blockchain’s records. And the real owner could always prove it. Title to the property would forever be protected in the blockchain.

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This means that any buyer from Castro would not obtain clear title to the property (as recognized by the blockchain’s consensus). The property and its value would therefore be permanently impaired in the hands of Castro or any other occupier. This would not entirely eliminate the motive for taking violent possession of real estate or other assets, but it would greatly diminish it.

And for two, in a blockchain world, war would be entirely unnecessary for a crypto to secure and maintain reserve currency status. This is not true of fiat. Presently the fiat dollar’s status as the world reserve currency is primarily a function of the fact that it’s used to settle most oil trades worldwide and by the US’s control over the worldwide financial system (the Eurodollar system, SWIFT, etc.), and those things are in turn enforced by war or threats of war. The dollar is presently the world’s reserve currency not necessarily because it is the best money but because the US has the most indomitable military. This would not be true in a crypto-dominated world, likewise greatly diminishing both the motive for war and the need to maintain a massive standing army (the latter of which also reduces war’s likelihood).

Taxing cryptos

Finally, in a crypto world, taxing crypto transactions will prove to be as difficult than taxing cash transactions today, maybe more so. This is both because these transactions can be at minimum pseudo anonymous and also because, once most wealth is transferred on the blockchain, governments can no longer place tax liens on property as easily, so tax revolts therefore become a real possibility.

So, when nearly the entire economy is as difficult to tax as cash transactions are currently, funding war becomes quite difficult, especially when a meaningful percentage of the public objects to the war.

I’m not suggesting that blockchains will lead to a conflict-free utopia. Far from it. But they will likely have a very real and direct impact of reducing war by depriving governments to some degree of the traditional means of funding them (easy-to-collect taxes and inflation) and by reducing the payoff for engaging in war (that is, making asset seizure more difficult, less certain and less profitable).

Having said that, the transition to a blockchain may not be seamless. Some waning countries may attempt to preserve their influence and resist the inevitable via the normal means (that is, war). So we may well get more fighting before we get less. But in the blockchain world that is to come, fighting becomes far less fundable and far less profitable, so we should eventually have far less of it.