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Author Topic: [2017-04-01]Would Bitcoin ‘Function’ in a Societal Collapse?  (Read 495 times)
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April 02, 2017, 04:12:03 AM

The question is a large obstacle to the mass adoption of digital currencies and it should be addressed head-on. The audiences being targeted as adopters are also a problem. The question and a problem overlap.
Calls for mass adoption usually aim at the mainstream and often translate into some form of government approval. This approach alienates two significant categories of people who should be fellow travelers: “preppers” and “survivalists.” (For the differences between them, click here.

Preppers and survivalists are rigidly individualistic and anti-government. The crypto-community needs them to counterbalance the trend toward licenses, regulation, and state control.

There are two problems with outreach, however: some voices in the crypto-community are openly hostile or scornful to preppers and survivalists; many preppers and survivalists view bitcoin with skepticism. The later ask a reasonable question which is often shrugged off: will bitcoin survive a collapse of infrastructure which could include the electric grid?

I have no doubt that digital currencies will not only survive but also grow as they have in the chaos that is Venezuela. But, again, the question is reasonable and deserves a respectful response.

The Crypto-Community

Would Bitcoin 'Function' in a Societal Collapse?First, the indifference or hostility of some within the crypto-community.

Preppers and survivalists were once viewed as bizarre dissidents but this is an antiquated attitude. Many of their lifestyle strategies, such as stockpiling canned goods and precious metals, are now mainstream and don’t occasion a sideways glance. Nevertheless, sophisticated bitcoiners may feel alienated from people who actively espouse a less technical lifestyle. This is not a barrier with outreach to these groups, however, as much as it is a barrier to connecting with the vast majority of average people.

Not reaching out is one thing. Being openly hostile is quite another. Many within the digital community may not be blatantly antagonistic to preppers and survivalists. But, to the extent preppers and survivalists are addressed, it is often in a tone of contempt. For example, Jeff Berwick wrote about the subject at The Dollar Vigilante,

[T]hese people [“Shit Hits The Fan” people] have a subconscious hatred for bitcoin because a) Gold has not performed as well as bitcoin and b) because they missed out on the massive gains to date. To those people, you need to let go of your hatred. Your hatred manifests in your own body and people just really won’t even want to be around you as you shout at the TV every time they say bitcoin has hit a new all-time high. And, as well, your obsession with SHTF scenarios is also not healthy. As I said above, the scenarios are very real. But they also may not happen.
Berwick’s psychoanalysis of SHTF people is baffling. Nevertheless, he raises two points that spin into the next barrier raised against preppers and survivalists from adopting digital currencies.

• the scenarios of a possible collapse are “very real;”
• the scenarios may never occur.

A common reason why preppers and survivalists reject digital currencies is because it requires the internet and electricity, both of which could easily become unreliable or unavailable. A sack of gold beneath the woodpile can be easily accessed and exchanged for the necessities of life. Digital currency…not so much.

In Defense Of The SHTF People

Would Bitcoin 'Function' in a Societal Collapse?The scenarios of a collapse are “very real.” The economy is speeding toward a brick wall. Civil society has never been so contentious. And, then, there are global tensions. A key reason preppers and survivalists dismiss digital currencies is that they view them as overly dependent upon fragile infrastructure.

To take preppers and survivalists seriously, consider just one unfolding situation: North Korea. The leader Kim Jong-un is an egotistical madman who may soon have the nuclear capacity to reach American soil. He may currently be able to attack American military bases in the region as well as Japan.

A simplistic sketch of background. In March, Kim test-fired four missiles into seas off Japan. Recent U.S.-Japanese naval ‘exercises’ in the area were followed up by a stern warning from Secretary of State Rex Tillerson of a possible pre-emptive military strike, presumably to take out missile sites. North Korea counter-threatened with a nuclear strike if the Americans so much as fired one rifle and, then, it tested “a new…high-thrust rocket engine.” Another test occurred last Friday.

Meanwhile, Tillerson’s talks with Chinese leaders – the only nation able to rein Kim in – appear to have gone poorly. And the installation of a powerful American anti-missile system in South Korea could not have helped. Upcoming talks between Trump and China may be more productive but only if someone budges on profound disputes such as who owns the South China Sea Islands.

The preceding detail is offered as proof that worrying about your safety and your family’s is not hysterical. Not worrying may be the ridiculous position.

But will a nuclear war happen? I don’t believe so. Nuclear war is highly unlikely if only because it would devastate every nation in the region, including the initiator.

It is far, far more likely that the threats will continue and deepen the cold war that’s been spreading for decades: namely, computer attacks aimed especially at financial institutions and infrastructure.

A severe economic collapse seems inevitable, however

Whither Bitcoin During A Cold War?

The question remains. Even without nuclear war, would bitcoin be able to function during a collapse or a cold war?

Yes. Electricity and the internet may be less reliable or more expensive but they would be available. An increasing dependence on the blockchain would make it a top economic priority.

It would also be a top military priority. In October 2016, the Pentagon revealed it was actively exploring blockchain technology “to create tamper-proof military computer systems, including those used to control America’s nuclear weapons.” Other nations are undoubtedly doing the same.


The bad news: an economic collapse or a cold war would negatively affect the internet and the electrical grid.

The good news:
• Aspects of the internet were specifically designed to survive war by being decentralized.
• The blockchain will be essential to both societal and global functioning which means the internet will be given top priority.
• Local economies will be also be built on the blockchain. “Most of the technologies already exist. Distributed Identity (Blockstack, Bit ID, etc) combined with on chain issuance of assets (MSC, Counterparty, Colored Coins) combined with off chain transference and transactions of such assets (Hyperledger, Open Transactions, etc).”

‘Civil’ society and foreign policy will not be pretty in the next few decades. This is all the more reason to reach out to preppers and survivalists, who are generally “gold-bugs.” They should consider both precious metals and digital currency.

Phil Champagne, author of the “Book of Satoshi,” offered an excellent reason. Flexibility has a huge survival value which requires options. He wrote, “While gold and silver are in their natural form in the physical world, they require the trust in a 3rd party when transferred in the electronic world. With Bitcoin, it is just the opposite, it is in its natural form in the electronic world but requires the trust in a third party if it was exchanged in the physical world (think of a paper note representing bitcoins held in custody, or a physical coin with a private key embedded in it – where you have to trust the manufacturer). So to me, they are absolutely complementary and both should be considered. It is funny that I have sometimes a hard time to convince people in the Bitcoin community to make them consider buying gold and silver.”

As long as Champagne means “funny” as a synonym for “odd”…then agreed. Odd ducks should flock together.

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April 02, 2017, 10:11:09 AM

In the event of a societal collapse, Bitcoin would collapse forever unless people still needed to send transactions.  The problem is that if Bitcoin's price drops too far for a long time, it'll never recover (mining becomes unprofitable, miners stop participating in the network, Bitcoin becomes worthless as a utility, Bitcoin is worthless forever).

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April 04, 2017, 03:12:06 AM

Money, at one time, was considered real wealth and a part of one’s total wealth. It was not simply a system of accounting and a symbolic representation of wealth. People came to accept that their money was not backed by anything but confidence in the issuing federal government and central bank. It seems to me that digital currencies and cashless societies are a natural progression of a centralized monetary system with a controlling issue authority. Bitcoin attempts to remove the central authority and make transactions invisible. But it still remains that digital currencies are simply methods of accounting and “money” has lost an historic characteristic of being real wealth tradeable on its own with no authority and in demand since its discovery. Paper has always been a money-substitute and contract to redeem for real wealth. Any problems with Bitcoin will be problems of accounting, not wealth, and will have to be solved as such.

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April 04, 2017, 04:31:35 AM

I think in a bad societal collapse that you are overly optimistic about Bitcoin. But in nuanced collapse, which is most likely, Bitcoin should remain functional. But it is an upper middle class and up deal. Working class have no business getting away from staples of value like food, tools, seeds, or even a store of fuel.

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April 04, 2017, 05:58:04 PM

societal collapse means the technological collapse as well,hence there will be no internet
bitcoin cannot function without internet,the author goes as far as to nuclear war scenarious,seriously?
societal collapse would lead to far more important problems of survival rather than bitcoin funcionability
get real and stop discussing retarded scenarios

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April 04, 2017, 08:40:56 PM

This is a mentally provocative thread.  I have often considered this question in my mind.  I luckily have enough resources to do both.  By divesting into covering both angles; food and btc I feel at least in part I will be OK.  An often times overlooked aspect of physical goods (food, ammo, etc....) is that they can easily be stolen.  So in a "bugout" scenario carrying lots of physical goods leaves you vulnerable.  I can feed myself for a few months on storage but I don't have many years worth.  If you follow this thread and give it serious thought you would likely conclude this is a tough subject.

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April 05, 2017, 06:38:06 AM

I think the article is right, Bitcoin will survive a "societal collapse" - with the exception of a really apocaliptic event like one reducing humanity to less a million people scattered around the world or in remote locations. But in this case, I think property and money will be less a priority.

Nevertheless, it would be perhaps desirable to have a backup infrastructure. It could happen as a "almost worst case scenario" that entire regions (e.g. a entire smaller country) are cut off from the electric grid, for example. For these events a network of solar-powered wireless network hubs could be rolled out. Another idea for a backup in this kind of situations is a "trusted paperwallet organization" that could provide "trusted" paperwallets (like Casascius coins) to individuals cut off from electricity and internet to have a offline payment option.

A second "almost worst case" scenario would be the disconnection of two continents and the split of the network in two or more partitions. If this situation cannot be fixed in a short amount of time, it could be better to accept to have more than one chain for that time being (e.g. an "AmericasCoin" and an "EurasiaCoin"). The UTXOs of both networks would still be independent, so if both networks are re-connected, there should be no interference. But rules should be established for how to integrate the "new UTXOs" that are been created while the split lasted.

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