>     Here's a post I was reading by JR Willet (MasterCoin) which goes well
>     with some chapters I was reading earlier from a 90s book called 'The
>     Sovereign Individual' about the effects of cryptocurrency.

>     http://imgur.com/a/eV74v#0

>     The implications spelled out by that book and Willet's post are
>     incredible and mind blowing.

>     More than ever, I'm convinced that we need to use these new tools and
>     the increasing unstable situation to construct a new reality that
>     enables us all to persevere as free people and maintain our sovereignty.

>     ---------------------------

>     I have seen the future of Bitcoin, and it is bleak.

>     ======================
>     The Promise of Bitcoin
>     ======================

>     If you were to peak into my bedroom at night (please don’t), there’s a
>     good chance you would see my wife sleeping soundly while I stare at the
>     ceiling, running thought experiments about where Bitcoin is going. Like
>     many other people, I have come to the conclusion that distributed
>     currencies like Bitcoin are going to eventually be recognized as the
>     most important technological innovation of the decade, if not the
>     century. It seems clear to me that the rise of distributed currencies
>     presents the biggest (and riskiest) investment opportunity I am likely
>     to see in my lifetime; perhaps in a thousand lifetimes. It is critically
>     important to understand where Bitcoin is going, and I am determined to
>     do so.

>     My hundreds of hours of thought experiments have been productive. I
>     published a whitepaper about the future of Bitcoin, and because of that
>     paper I’ll have the great privilege of sitting on the “Bitcoin in the
>     Future” panel at the 2013 Bitcoin Conference in San Jose. Through these
>     years of deliberation I have satisfied myself that the answer to the
>     “Trillion Dollar Question” of whether any form of distributed currency
>     can ever achieve a stable price, is “yes”. (There are three ways this
>     will happen, as I have written elsewhere).

>     I have been predicting for years that the world’s first trillionaire by
>     USD valuation will be an early investor in distributed currency — quite
>     possibly Satoshi Nakamoto, whoever he/she/it/they may be. I own a few
>     bitcoins, and I intend to keep them until I find a more attractive
>     investment (that is, I want to invest in whatever replaces bitcoin or
>     builds on top of it).

>     To many people, this sounds like an implausibly rosy future, and for
>     early adopters that is true — it feels like winning the lottery every
>     day. However, for most other people, the ascendancy of distributed
>     currency systems will feel like a disaster. If you are involved in
>     Bitcoin now, you should prepare to be almost universally hated someday.

>     In this article, we will examine a few simple thought experiments to
>     show how the rise of distributed currencies such as bitcoin could create
>     massive social upheaval due to governments’ rapidly degrading capability
>     to fulfill their core functions of taxation and regulation of commerce.
>     We’ll see how the end result could be extremely painful for common
>     citizens due to previously unimaginable wealth disparities,
>     hyperinflation of previously stable government-backed fiat currencies,
>     and a greatly empowered criminal class.

>     ===================================
>     The Bleak Future of Fiat Currencies
>     ===================================

>     Anarchists and hardcore libertarians love Bitcoin, but most people
>     outside those circles are not in favor of completely doing away with
>     their government. If you aren’t part of a fringe political movement,
>     chances are there is something the government does that you like,
>     whether it’s handing out entitlement money, killing enemies, putting
>     people in prison, building dams and roads, funding research, or any
>     number of other things. The government can do these things because the
>     government can collect taxes, which in turn they can do because the
>     flows of money are highly regulated and tracked at every level. Whether
>     you are collecting a paycheck, buying furniture, cashing out
>     investments, or simply dying and leaving an inheritance, the government
>     knows about it and takes a cut.

>     For our first thought experiment, let’s imagine a world where
>     distributed currencies like bitcoin have become wildly successful due to
>     technological advances which make them easy to use and completely
>     stable. In this world government-issued money is as good as dead. It may
>     take a few years for everyone to realize it, but there will come a point
>     when the ever-increasing outflows of money from fiat money into
>     untaxable, unseizable decentralized currency will reach a tipping point,
>     and we’ll have a financial panic like the world has never seen.
>     Frightened lawmakers and banks will try to stop people from cashing out,
>     but that will just increase the panic. Those who don’t get out before
>     the door closes will be in dire straits indeed. This is the ultimate
>     bank run — the run on the world’s central banks, and who could possibly
>     step in and restore order?

>     When people think of hyperinflation, they usually envision a Zimbabwean
>     printing press running around the clock in the dark corner of a mud hut,
>     putting ever more zeroes on cheap paper. Has it ever occurred to you
>     that hyperinflation can happen while the printing presses are off? The
>     value of the money in your pocket is not ultimately guaranteed by your
>     government, but by simple supply and demand. The government controls the
>     supply, and we control the demand. If demand falls precipitously, we
>     have hyperinflation without ever needing to print another dollar or
>     euro. If people start fleeing government currencies en masse,
>     hyperinflation is the inevitable result.

>     The good news is that you don’t need to worry about current government
>     debt in this scenario. If government currencies lose their value
>     rapidly, debts which previously seemed overwhelming suddenly become much
>     more manageable. Perhaps your debt-laden government will someday
>     completely pay off it’s national debt by simply selling a few gold bars
>     and a couple national parks.

>     ==============================
>     The Bleak Future of Retirement
>     ==============================

>     For our next thought experiment, let’s consider what will happen to
>     Grandma. For her whole life, she has carefully saved her money, and now
>     she is living in reasonable comfort. She gets money and health care from
>     the government, and she has her own savings to fall back on. Grandma has
>     done everything right, including taking her savings out of the stock
>     market; most of her savings are now invested in the safest asset known
>     to man: U.S. Treasury Bonds.

>     Rather suddenly, things start to go wrong. At the same time all her
>     expenses start skyrocketing, the government has a liquidity crisis; they
>     are having trouble collecting taxes and can no longer pay for her health
>     care. Her savings are still “safe” in the sense that she will get U.S.
>     Dollars out of them, but that is little comfort when those dollars which
>     should have lasted years can barely pay her weekly grocery bill.

>     Grandma’s retirement has been sabotaged by the rise of a new kind of
>     money that she can’t even begin to understand. All she knows is that she
>     did everything right, and now she has nothing.

>     ===================================
>     The Bleak Future Wealth Disparities
>     ===================================

>     All the world’s wealth has essentially been stolen, but by whom? By you,
>     dear reader.

>     We’ll be very lucky if we aren’t all rounded up and summarily executed.
>     Thankfully, you’ll be able to use some of that money to purchase
>     protection, but I’m not at all convinced that it will be enough. A
>     wrathful government backed by an enraged population is a fearful enemy.
>     Satoshi foresaw this long ago, and I doubt he/she/it/they will ever
>     voluntarily come into the light.

>     If there are enough of us, and we are very careful and charming, we may
>     be physically safe. However, the massive displacement of wealth will
>     still have some awful consequences. People argue all the time about the
>     societal benefits and drawbacks of wealth disparities, and the rise of
>     distributed currencies will create disparities that previously did not
>     seem possible. It seems clear that there will be a lot of jobs created
>     by the new wealthy, but whether the average person is better off or not,
>     one thing is sure to rise: resentment. What right do we have to take all
>     the wealth of the world and put it in our pockets? Sure, a nifty new
>     idea should pay off for early visionaries, but nobody ever expected a
>     new idea to suck all the wealth out of the world like a financial black
>     hole!

>     ===================================
>     The Bleak Future of Law Enforcement
>     ===================================

>     This is where things get really bleak. Currently distributed currencies
>     facilitate money laundering, black market commerce (the Silk Road), and
>     insider trading (TorBroker). These applications in their current form
>     are just a snowflake on the tip of the iceberg. Not only will they get
>     MUCH bigger, but we will see applications which are much less savory.
>     Historically, the “Dark Net” accessible by Tor and private networks has
>     been nothing more than a hidey-hole for illegal files and a hangout for
>     paranoid schizophrenics, but it is quickly becoming the platform of
>     choice for large-scale illegal commerce.

>     For this thought experiment, we will imagine that your child has been
>     kidnapped and put up for sale on “TorSlaver”. Their business plan is to
>     kidnap children and sell them to the highest bidder, whether parent or
>     pedophile. The winning bidder is sent the location of the child,
>     probably bound and gagged and dumped somewhere. As long as they don’t
>     get caught doing the kidnapping, the kidnappers can do this again and
>     again with complete impunity. Once someone proves it can be done,
>     copycats will come out of the woodwork, and it won’t matter if the first
>     mover gets caught.

>     As a parent of three small children, I cannot describe to you how awful
>     this makes me feel. I have always been a very reluctant bitcoin
>     investor, for this very reason. I don’t invest in bitcoin because I
>     think it will bring about a happy utopian world. Quite the opposite. I
>     invest in bitcoin because the rise of distributed currency is
>     inevitable, and owning some bitcoins seems to be the best way to prepare
>     for the chaos ahead. And just maybe, if I position myself correctly, I
>     can make things a little less awful.

>     ===========================
>     The Government Strikes Back
>     ===========================

>     Does anyone really expect the government to sit back quietly and watch
>     while their currency is debased, terrorism is funded, and children are
>     kidnapped? The only question is when and how they will strike back
>     against these forces. While the government does have a lot of options,
>     ultimately those options only slow things down. At some point, we
>     collectively with our governments face a difficult choice between trying
>     to survive this deadly storm or attempting to destroy all decentralized
>     computer networks (including the internet). The former seems
>     unthinkable, the latter, impossible.

>     I wouldn’t be surprised if this chaos gives rise to a strong,
>     centralized, one-world government which gets its revenues by tightly
>     reigning in freedom of commerce in order to collect taxes. For instance,
>     I will not be surprised to see a requirement someday that every person
>     buying or selling have an implant which tightly binds their identity to
>     the sale. Perhaps the implant will even be located on the back of the
>     right hand or the forehead! This may seem repugnant to you now, but wait
>     until you have lived in the storm for a while before you call it
>     impossible. The natural reaction to the deadly chaos of decentralized
>     currency is for the populace to embrace increasingly centralized
>     controls on commerce. The battle lines are only just starting to be
>     drawn, and your guess is as good as mine for how it will play out.

>     ==================
>     What Should We Do?
>     ==================

>     We need people thinking about this. I’ll admit that many of the things I
>     wrote about may not happen at all, or may happen very differently than I
>     imagine. However, there are lots of people touting the fantastic
>     benefits that bitcoin and its children can give us, and I don’t see
>     anybody talking about how bad things could potentially get.

>     We need solutions. When the government finally starts taking
>     decentralized currency seriously, it will probably be doing so in a
>     state of panic. We need to be advising governments now about how they
>     can survive the storm and protect their populace. We need to think of
>     ways the government can pay for its most critical operations, and what
>     legislation makes sense to mitigate these new risks while preserving as
>     much freedom as we can.

>     The Lifeboat Foundation is attempting to provide this thinking, advice,
>     and solutions. They are already getting ready for a new advisory board,
>     culled from computer scientists, economists, and bitcoin experts. If you
>     make a fortune from your investments in decentralized currency, I urge
>     you to consider how you can help all the people harmed by these rapid
>     changes. Many bitcoin enthusiasts seem to think they will get to retire
>     on a private island with a harem and a stable of Italian sports cars.
>     This is wrong. Bitcoin investors need to someday become bitcoin
>     philanthropists, and our giving needs to be targeted at helping all the
>     people we have harmed. The Lifeboat Foundation is one option, but I’m
>     sure there will be others.

>     I first published this article on the blog of the Lifeboat Foundation:
>     http://lifeboat.com/blog/2013/04/bitcoins-dystopian-future
>     Reddit version is here:
>     http://www.reddit.com/r/Bitcoin/comments/1cos8x/bitcoins_dystopian_future/

>     tl;dr: Wildly successful distributed currencies could hurt a lot of
>     people.

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