Centralization of government vs. Bitcoin decentralization

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Hosts: Christian Keroles and Ansel Lindner

Guests: Greg Foss and Aaron Segal

In this special episode of Bitcoin Magazine’s “Fed Watch” podcast, we sat down with two brilliant minds in the bitcoin space, Greg Foss and Aaron Segal, to discuss the global process and the interplay of centralization and control. decentralization in society. It was a sort of round table with Keroles guiding our subjects.

The current and future battle between centralization and decentralization

Segal began by introducing five axioms of centralization versus decentralization, which are the subject of a future essay: First, the fluctuation between centralization and decentralization is one of the driving forces of the story; second, centralization and decentralization can take many forms; third, decentralization is more stable in the long run; fourth, technology can work both ways; and five, Bitcoin is a unique force for decentralization.

A very interesting point raised immediately by Segal is how the system promotes buy-in from people by mixing their assets into it. When you start your career in the United States, you usually get perks like 401 (k) dues or even stock options. Most people’s savings, if not invested directly in the stock market or government pension plans like Social Security, are dollar-denominated investments. This leads to a more rigid centralization of the system than you might expect based on the monetary properties of competing systems, as your savings depend on the continued existence of the current system. Bitcoin is pretty much the only way to get this investment off the ground and avoid a messy transition.

Chinese economy and growing centralization

The panel then applied this line of thinking to the situation in China to identify the dynamics. What followed was one of my favorite discussions in the history of “Fed Watch”. Foss pointed to the inadequacy of Chinese capital markets as being small and immature. The impact of recent CCP crackdowns on stock quotes and businesses can only be understood in this context.

Segal added that the CCP appears to be shifting the economy to new industries. My contribution has been to anchor this discussion on China in the wider debate on decentralization. Nation states will face the pressures of decentralization, as will the international order as a whole. The previous era of international bodies like the World Trade Organization (WTO), the UN and the World Health Organization (WHO), with significant influence, will also be affected by decentralization.

The way the United States handles Bitcoin decentralization

The conversation then continued by examining the United States and the effect of this wave of decentralization on their society. We have noted a rise in war rhetoric, and how it affects these dynamics of centralization, as well as the greater affinity with the rule of law. The increase in bitcoin mining in the United States and the recent debate on the infrastructure bill are testament to the United States’ position on this matter.

The United States is unique in that it opens up many topics. Panelists agreed that the United States is a deeper market and more based on the rule of law, so it should handle this pressure towards decentralization better than most other places. Foss and Segal discussed passive investing as a big deal, “passive investing is communism” is a direct quote from Segal. The conversation even turned to new Bitcoin community participant Jason Lowery, a member of the US Space Force, writing a thesis on bitcoin mining as a nuclear deterrent.

As you can see, it was a loaded episode, it was just a sample of what was covered. It’s one of my favorites we’ve ever done and a must-listen. Thanks to Foss and Segal for joining us. Maybe we can continue this topic on another show soon.

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