The Future is Lawless

A couple days ago I wrote a post about how regulation of crypto is impossible. I got quite a bit of pushback to this claim for obvious reasons. I think @yabapmatt summed it up perfectly in his comment:

They definitely CAN regulate crypto, I think what you mean is that the regulation will be ineffective for those who care to get around it, which I would argue is the case for a lot of existing regulation (such as drugs, like you pointed out).

Regulation just means telling companies what they can and cannot do when it comes to cryptocurrencies. Specifically, it will most likely be telling any exchanges that operate in the US that they cannot list a large number of the tokens they are currently listing, and then that will tell other US institutions what cryptocurrencies the government says that it's ok for them to invest in.

Regulation is much more of a corporate thing than an individual thing.

Hm, yes, exactly.

So when I read a comment like this I'm seeing pretty much zero friction between what I have said and this sentiment that appears on the surface to be saying the exact opposite. "Regulation is much more of a corporate thing." Yep. So from my perspective, this is not crypto regulation. This is just more banking regulation. Par for the course. Crypto is not being regulated. Corporations/banks are. We are saying the same thing. I'm just coming it it from a very different perspective.

Crypto is the next Gold Rush.

What happened during the California gold rush? People on the East Coast straight up traveled all the way across the country, risking their lives and uprooted everything to find themselves in a hostile lawless landscape where anything could happen. There were scammers (bandits) and danger around every turn. The risk was high but the reward was higher. Crypto is transitioning the entire world into the next gold rush. There aren't going to be any rules. A crazy segue to anarchy is coming.

This is a very difficult future to imagine at the moment because crypto is small and has very little power compared to the legacy systems. However, the writing is on the wall. Crypto scales exponentially larger than the legacy systems before corruption sets in. Corporations will scale into DAOs. Entire governments will be founded on DPOS voting (or something similar). These governments will be more powerful than existing governments and eventually the legacy systems will all be replaced with the new stuff.

What does that mean?

Well it means crypto cities and communities will start popping up, and they are going to be ushering in the ideology of crypto itself. KYC will go away. Anyone will be able to buy a house or buy a cell phone plan or open a bank account (or be their own bank) without having to identify themselves.

That's when all this Chainalysis nonsense becomes completely worthless. Can't track Bitcoin or anything else if users aren't sending money to a KYCed bank account. Even if you could how could you find them? Their address isn't on file anywhere. They won't even have to use a real name to navigate this new society.

Crypto is ushering us into a state of lawlessness.

We can see it happening already. Look how many scams there are compared to how many people actually get held accountable for their crimes. Doesn't matter. The high risk is worth the reward. This is one thing the naysayers simply can't wrap their head around.

It's very easy to look at crypto and be like, "Wow, look at all these scams and all this garbage." So many DEFI rugpulls. So many worthless NFTs with zero utility. But what the naysayers don't get is this simple fact: "How are these scams so profitable?" "How are their so many of them?" The obvious answer to these questions is simple: Crypto is so exponentially valuable on a fundamental level that it intrinsically subsidizes the scams and all the garbage. The garbage only gets flushed down the toilet during the bear market's 80%+ retracement.

So when I say that crypto is impossible to regulate, I'm actually coming at it from a perspective that goes much deeper than that. Not only is crypto impossible to regulate, it's going to destroy ALL legacy regulations and rules except for the ones that communities choose to live by on a local level. That's a lot of diversity in terms of the rules from location to location. A return to city-state governance is inevitable given this trajectory. A severe Balkanization across the entire world is guaranteed to happen given the value of crypto in combination with the very definition of decentralization.

DAOs are unregulable

It is not possible to govern a Decentralized Autonomous Organization from the outside because it already has, by definition, its own form of digital governance. This completely defeats imperialism and the ability for power to be centralized in a given location. The members of such a DAO can be located anywhere on the planet, and much of the activity that takes place will simply be on the Internet itself.

Milestones to lookout for:

We are going to see many many examples of this play out in real time. For the most part, DAOs are going to completely ignore intellectual property laws, instead opting to make the claim that data can not be owned and everything is open-source. Brands will be stolen and co-opted and there's nothing anyone can do about it. This is torrenting and pirating moving on steroids.

For example, a DAO could create a Star Wars video game or movie. They can then proceed to allow anyone to play the game or watch the movie. No one can stop them, and the currency being used gains intrinsic value from this development. It will be trivially easy for DAOs to profit off of the IP of others without being to take them to court. Who would they send the letter to? The developer of the thing could easily be anonymous, and even if not their address can be hidden, and even if not they could be in a country that won't take the cease and desist order seriously.

And even if the people who make the thing are taken to court... that's totally irrelevant. The content has already be given to the entire community. It's impossible to take it down because no one owns it and it's been freely given to everyone.

Another thing to lookout for is when DAOs become bigger than the biggest corporations (or at least close to it). That means a DAO has to have a million members strong or more. That's when the crazy stuff will start happening. These people will not be told what to do by the imperialists. They've had enough of imperialism and authoritarianism for one lifetime.

This is only temporary.

The Gold Rush can only last so long. Many seem to think that it is already ending, but it hasn't even started yet. The world will continue to decentralize until every single legacy system that exists today is gone. Every government, every corporation, every bank that exists today will not exist after this transition is complete. The only way crypto can scale up is if it bulldozes everything in its way.

Time is relative.

This could take fifty years easily. Fifty years is a very short period of time to completely disassemble a thousand years of centralization. Again, this is a difficult future to envision because crypto is so small and weak, but I only see it getting stronger (even now during the bear).

That's potentially 50 years of slipping farther and farther into complete lawlessness and anarchy (more likely that catalyst events occurs randomly and huge changes happen all at once). And yet this future will still be more than worth it because massive value is being created seemingly out of thin air. There's no reason to think that the scams are going to slow down. In fact, we must assume they will get exponentially worse given the exponential gains of crypto subsidizing their existence and the greed/desperation of users within the space fueling them.

Also worth noting that networks that have been around for a long time will be seen as the safe havens from all the 'garbage' that may or may not make it. In ten years, networks like Hive and Bitcoin (or literally any other coin still alive) will be the place people go when they are playing it safe and just want something with a reputation.

Military

Every city-state has a military. This is a big milestone to look out for as well. What happens when the crypto-militaries form alliances? It's safe to say the legacy systems are going to be extremely threatened and throwing lots of propaganda against these things. Given a decentralized architecture, it's possible to defeat the military of a crypto city-state, but it's not possible to take control of the infrastructure therein or to upend the government and install puppet-masters.

Much like Steem suffered a digital hostile takeover, I expect that one day we'll see the same thing happen within the physical world. A crypto city-state will fall, but the attack will only make the citizens richer as they cut off the attacker from making any kind of profit from them. A garrison placed inside the city with the goal of controlling it will cost more than the value that can be extracted from it. The money attack will fail.

Conclusion

Society has reached peak centralization and corruption. The Balkanization of government and money via crypto is inevitable. It is not my intention to convince my readers to believe these predictions; only to explain that this is what I fully believe will happen. This is my perspective and view of things. When I say something like, "crypto is impossible to regulate," I'm coming it it from this world-view, where crypto is going to gobble up every single legacy system it touches and become more powerful than anything humanity has ever seen (by exponential margins).

Only after everything we know is destroyed and the new systems begin to scale up will humanity enter another period of centralization and efficiency. However, by that time 50 years may have passed and we may have even colonized another planet or two. Until then it will appear that society is devolving into lawlessness, especially to the non-believers who think it's all a scam. Libertarians and anarchists are going to have a field day.

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