BitopiaLand on Nostr: Bitcoin & the Security Dilemma The “security dilemma” in geopolitics refers to ...
Bitcoin & the Security Dilemma
The “security dilemma” in geopolitics refers to the paradox where a state’s attempt to increase its own security leads to a decrease in security of other states.
The same applies to Bitcoin, but with opposite consequences…
States that adopt policies or build weapons to increase their defensive capabilities think they are acting defensively. Potential rivals however often perceive this as offensive actions and will take countermeasures themselves.
This starts a spiral in which multiple states engage in a security competition that makes the entire environment less stable. It can even lead to war!
This “security dilemma” also applies to Bitcoin, but with Bitcoin the consequence is not destabilisation. It actually leads to competition for the benefit of humanity.
The “security dilemma” applies to Bitcoin because of its limited supply of 21 million coins. Every Bitcoin bought by one state therefore is one Bitcoin less for other states to buy.
States benefit by holding Bitcoin because of its ever increasing purchasing power. This allows states to attract talents and get resources more easily than rival states.
One state increasing its purchasing power is a strategic threat to other states if they don’t increase their purchasing. This is where Bitcoin’s “security dilemma” kicks in.
As soon as the world understands Bitcoin, one state buying more of it will cause stress among other states. And they will want to increase their own Bitcoin holdings.
Why this doesn’t cause destabilisation is because it is hard to impossible to “conquer” another state’s Bitcoin. It is after all an asset in cyberspace.
The best way for a state to acquire more Bitcoin is by developing its energy and technology industries. This allows the state to increase its share of the pie that is block subsidies and transaction fees.
If every nation develops its energy and technology industries the entire world benefits. It provides cheaper and cheaper energy and more advanced technologies.
This will increase productivity and make all our lives better!
The “security dilemma” in geopolitics refers to the paradox where a state’s attempt to increase its own security leads to a decrease in security of other states.
The same applies to Bitcoin, but with opposite consequences…
States that adopt policies or build weapons to increase their defensive capabilities think they are acting defensively. Potential rivals however often perceive this as offensive actions and will take countermeasures themselves.
This starts a spiral in which multiple states engage in a security competition that makes the entire environment less stable. It can even lead to war!
This “security dilemma” also applies to Bitcoin, but with Bitcoin the consequence is not destabilisation. It actually leads to competition for the benefit of humanity.
The “security dilemma” applies to Bitcoin because of its limited supply of 21 million coins. Every Bitcoin bought by one state therefore is one Bitcoin less for other states to buy.
States benefit by holding Bitcoin because of its ever increasing purchasing power. This allows states to attract talents and get resources more easily than rival states.
One state increasing its purchasing power is a strategic threat to other states if they don’t increase their purchasing. This is where Bitcoin’s “security dilemma” kicks in.
As soon as the world understands Bitcoin, one state buying more of it will cause stress among other states. And they will want to increase their own Bitcoin holdings.
Why this doesn’t cause destabilisation is because it is hard to impossible to “conquer” another state’s Bitcoin. It is after all an asset in cyberspace.
The best way for a state to acquire more Bitcoin is by developing its energy and technology industries. This allows the state to increase its share of the pie that is block subsidies and transaction fees.
If every nation develops its energy and technology industries the entire world benefits. It provides cheaper and cheaper energy and more advanced technologies.
This will increase productivity and make all our lives better!