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How Are Nation-States After the Crypto Mass Adoption?

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Nation-states and FIATs would prosper even after the market penetration of Bitcoin, Ethereum, or DeFi stacks. Cryptocurrencies would be certainly taking some share in the market, but still, each government issues FIAT.

After the Crypto Mass Adoption, mixing is a common method in order to secure one’s assets from the government’s confiscation, including taxation. (* Here, I would call “The biggest holder of military power” as the government.)

But still, the government has several ways to seize people’s assets.

  1. Land Tax: Real estate is a very physical entity to forcibly remove control from people, or negotiate to pay tax for protection.
  2. Indirect Tax: Unless we all use the UberEats for all consumption activity, the seller is a very physical, and taxable entity. Even if you use ZCash or tornado.cash for your payment method, it doesn’t work to avoid taxation. The shop owner is the target of taxation, and he has to increase some price in order to compliment the loss of taxation.

These are the reasons why I assume still governments stay there.

The MTPL by Yu Kimura discovered that even the small nation-states can issue their FIAT with mild(2~3%) inflation. That seigniorage will be invested to reinforce their military power and police power.

Army of None — the best book by Bill Gates in 2018 — showed me more independent-able future. AI-supported armed-drones are getting very cheap and these technologies are invented in the private sector and exported to the military sector.

Bitcoin or DAI can be used as the reserve currency in a certain nation. For Bitcoin, its scarcity slows down the velocity of monetary circulation and it may harm the economy of that nation, but it works. For DAI, needless to say, it is exactly same as dollar-pegged monetary policy without manual pegging operation.

These claims don’t mean I’m bearish on Crypto, rather, I’m very bullish. I just wanted to show another possibility of cryptocurrency with rational deduction.

I have a strong concern that current Crypto narrative is so fragile and many more alternative narratives are required as insurance.

  1. By referencing Leon Warlas, the Land Tax can be alternated by “Government-owned lands” idea. All lands have to be bought by the government in national-bond, and this is like sharing the seigniorage to ex-land-owners. The virtue of Warlas’s idea is the same taste as Robin Hanson’s Futarchy idea. The government can be evaluated by land price.
  2. Let’s say, when Okinawa-yen there is, it would be inflated than Japanese yen. And so Okinawa’s economic situation would be much healthier. But the matter is cross-border trade. If “Okinawan” people want to pay “Japanese application” via Okinawa-yen, background DEX conversion would be needed. zk-Uniswap like invention would help this problem though, we need to wait for the OVM progress.
  3. English Auction of on-demand military force is a national security issue. But I guess the strongest government in the range would pay the highest bid for it. So it is like the Nicehash in PoW mining. At least, Nation-states have to have bigger military power than “nicehashable” military power.



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Thanks !

Thanks for sharing this, you are awesome !