This article is part of a series written by Jaime Gutierrez entitled The Influence of the US in Central America then and today
The military, today, is not considered an important element of society by the public. Why should it? It represents bloodshed and fights that seem pointless and have caused society a lot of pain. Similarly, studying Bitcoin as a property defense system is a misunderstood part of this asset and one that is biased by our own beliefs. How are they connected? Because both use brute force and physical power to defend property.
As a Mexican-born citizen, I have always wondered why given the abundance of natural resources like oil and lithium available in our country, Mexico hasn’t become a world economic leader. You might also have a similar point of view in your country of residence. Especially if you are in a developing nation in Latin America or Africa or if you live in a small country that has a lot of influence from superpowers like Russia, the US, or China.
Throughout history, one of the reasons a country or empire has become a hegemonic power has been through what Jason Lowery calls the power projection game, which means the kinetic brute physical force of the military. This is important because if a nation doesn’t project power properly, how can it defend its natural resources and its sovereignty from another nation? And more importantly, as individuals, how can we defend our property from being stolen or confiscated by a corrupt agent? Here is where the role of the State arises.
According to Robert Breedlove, the main purpose of a State is the defense and preservation of life, liberty, and property.
“Property is the mutually acknowledged, exclusive relationship between an asset owner and any particular asset. As a relationship rather than any particular item, the essence of all property is informational.” (Breedlove, 2021) (1)
The right to life is the source of all rights - and the right to property is their own implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life.” - Ayn Rand
If property means a list of “who owns what?” and life is the source of all rights, then how can we defend ourselves from a tyrant or a person that wants to steal our property? We want to be assured that the product of our daily life efforts gained through sweat, tears, and sacrificed time will be safe for ourselves and our bloodline.
“Reliably storing, updating, and communicating information in this list is property’s native application. And the limitation of this has been the need to trust (and pay) an authority to maintain this list and prevent falsification or duplication of its records” (Breedlove, 2021) (1)
For centuries, this authority has been the government. The government is the entity that determines the rule of law in a community. It works through the federal courts and its three main powers: legislative, executive, and judicial to defend the property rights of its citizens. It needs the third one (an army) to guarantee compliance with these rules if the other powers fail in doing so.
“The purpose of projecting power via the Militia is to preserve zero-trust and egalitarian control over what are fundamentally trust-based and inegalitarian Rules of Law. Our rules-based order only works insofar as we can project power to preserve our access to our rules-based order. And, the only physical signature of “ownership” is the power projected to preserve one’s access to property.” -Jason Lowery (3)
When we look at history, the government has often ended up being the actor imposing new rules and thereby violating these same property rights. In the US, this right is protected from corruption by the 2nd amendment, which allows the people to form Militias to combat the State if it becomes a bad actor in society.
United Stated Constitution Second Amendment
Source: Congress (2)
This concerns the protection of property rights within a self-organized State, but the same dynamics are true between States. And this is where international conflicts come from and where the importance of the military arises to defend their rule of law from outsiders.
Military Development Infrastructure
Source: Jason Lowery (4)
“Whenever a consensus as to property rights between states could not be reached through political means, conflict erupts.” (Breedlove, 2021)
“We forget how the state of ownership and chain of custody of virtually everything with mass, particularly the mass we monetize, is written in blood, not ink. This is the tragedy of good power projection and deterrence. The better we get at it, the less often we are reminded about why we need it. (Lowery, 2022) (3)
Carl von Clausewitz, a Prussian general and military theorist of the 19th century stated: “War is merely the continuation of policy with other means.” So to understand the importance of the military to have a hegemony we need to understand why wars happen.
As one of the most important classical strategic thinkers of history, he examined the nature of war and defined it with this trinity:
War is made of the same “blind natural forces” of “primordial violence” observed in nature.
It contains “the play of chance and probability” that rewards “creative spirits.”
It is a calculated instrument of national policy used to solve political disputes. (4)
This means that the survival of the fittest, the creative spirits that are in the search beyond something greater than them, and with a clear purpose to achieve it; are the ones that translated into governments and have become the superpowers that are influencing everything around them because they have become the best at projecting power.
“Moreover, winning this brute-force physical power game is not exclusively dependent on finding ways to amass larger quantities of power; it’s also about finding different strategies for projecting power in increasingly more creative ways.
And when we can’t trust the judge because we don’t respect their judgment, war gives nations access to an independent courtroom with a perfectly impartial judge who cannot be manipulated by emotion or corrupted by false interpretations. War is the judge of last resort, delivering incorruptible judgment and a very decisive ruling based on brute-force physical power.” (Lowery, 2022) (4)
This is the judge that has come in the rise and fall of civilizations and superpowers. And when new technology arises, the hegemony of the power that rejects it suffers the consequences and falls apart.
Think of the Middle Ages, and one of the first things that probably leaps to mind for us are castles, those immense, strongly fortified structures that were the power bases of their day. Gunpowder would change all of that, as the shattering of the walls of Constantinople demonstrated.
Constantinople Harbor painting.
Source: Cobija/CC BY-SA 4.0/Public domain
Picture yourself in Constantinople, which was seen at the time as the ultimate metropolis, the ultimate object of desire; with the Ottoman Turks determined to capture it. We are in the year 1452. Orban the engineer, an artillery expert is working in Constantinople and goes to Emperor Constantine XI and his armies to offer them his newest invention; a dreaded weapon, a monster cannon using gunpowder to protect the city from outside invaders. But the Emperor ran out of money and couldn’t buy it from him. So Orban goes to the Turks, who couldn’t reject it, and with a better price, offers it to them.
The monstrous cannon, constructed by Orban.
Source: User:The Land/Public domain
We are now on Easter Monday, April 2, 1453, a year later. The young Ottoman sultan, Mehmet II, and his armies are in Constantinople to begin the siege of the city. The monstrous cannon, constructed by Orban the engineer, had to be hauled more than a hundred miles to the besieged city. The largest cannon ever, 27 feet long with the ability to shoot a 1,500-pound stone ball at the defenses of the beleaguered city, is now in position. With deafening thunder, the cannon fired. This weapon pounded the walls of Constantinople and eventually broke them down, allowing the Ottoman army to breach the city.
In addition to this monster, many other smaller cannons continued the bombardment. This was the sound of a military revolution, making stone walls, towers, and battlements largely obsolete. It would devastate the certainties, traditions, and way of life of the medieval age.
The city of Constantinople fell on May 29, 1453, 8 weeks after the first siege. And the key to the Ottoman Turks conquering Constantinople was the cannon constructed by Orban the engineer, a professional artillery master. (5)
“Keep your sword in front of you. Your swords and your shields are fully sufficient and will prove very effective in battle”.
-Emperor Constantine XI during the final siege of Constantinople. (6)
Those last words were a lie because they couldn’t defend themselves from the canons unless they would have bought them a year previous to the siege. This is an important history lesson because the last innovation in power projection was nuclear weapons. We saw what they are capable of in Hiroshima and Nagasaki. If used, the outcome is mutually assured destruction of humanity. And the countries that have them became the new world superpowers that no one wants to attack because the cost of it may be irretrievable. These countries are China, Russia, and the world superpower hegemony, the US. We have some other exceptions with nuclear weapons like North Korea, but they don’t have the influence of these three countries throughout the world.
Yet, another power projection technology arrived in 2009. Satoshi Nakamoto, inspired by Adam Back’s paper “Hashcash - A Denial of Service Countermeasure”, built “Bitcoin: A peer-to-peer electronic cash system”. A network with a cost function that brings a challenge to its miners to be able to create tokens we call Satoshis (7). By the proof of work mechanism, miners have to solve a challenge every 10 minutes to be able to validate Bitcoin transactions, and by doing so they receive Bitcoin as a reward. Miners need to connect their computers like Antminers S19 Pro to resolve a challenge similar to this one: “They have 10 minutes to find the number of zeros from 0 to 80 and the first to find them gets the reward.” (8)
This cost function has also a mathematical succession to impose a cost if someone wants to attack the network:
The Bitcoin halving formula
When the Bitcoin network was released, miners started receiving 50 Bitcoins per block, which was mined every 10 minutes. Every 210,000 blocks Bitcoin rewards will be cut by half, which happens approximately every four years until we reach the 32 halvings (”halving” is the term referring to the Bitcoin rewards cut by half), which is expected to happen in the year 2140. We are now in the third halving, where miners are now receiving 6.25 Bitcoins per block.
If someone wants to attack the Bitcoin network, he or she would need to have a 51% of the electrical power in the world. And if for some reason he or she has it, the Bitcoin network has another mechanism to impose a cost. The difficulty adjustment. This means that every two weeks the difficulty of the challenge will change depending on the nodes (computers) that are connected to the network, which doesn’t even guarantee the attackers they would receive the same amount of Bitcoin every ten minutes after two weeks. This 51% attempt to attack the Bitcoin network would take approximately US$6.7B per year. (9)
The proof of work mechanism is imposing a cost to any belligerent agent that wants to corrupt the network. Using electrical power via their computers they are using electrical brute force physical power instead of kinetic one as our military gunpowder. This is a continuation of the power projection game but in cyberspace, now done by protecting our pure digital property and energy, which we call Bitcoin. Miners are a continuation of our military power.
What are the implications of this? Jason Lowery expresses it as follows and is making a great thesis called “Softwar: Bitcoin and the Future of our National Strategic Defense” to illustrate it deeply:
“We cannot forget how history plays out. We cannot forget that power is everything if we want to defend what we hold valuable. Hopefully, we can convince the people who are in charge of policy making. This is the goal of my research. They should at least take Bitcoin mining seriously because we don’t want to be like the end of Constantinople. We want to be the superpower of the future. If this is the power projection play, cyber. If this is how you achieve zero trust egalitarian control over cyber property, we want to posture this country to continue to be a superpower”. (Lowery, 2022) (6)
The US has become the world superpower hegemony through its military force and the use of its currency, the US dollar, as the world reserve money in the world. They managed to secure it after getting out of the gold standard in 1971 and following, with the petrodollar system (10). I will explain it deeply in another article that is based on the work of Lyn Alden’s research and analysis. But why is this important?
After the US sanctions against Russia by taking them out of the swift system, now every country is asking themselves this question: “Can I trust my savings in the banking system?” (11) If I go against any of these three superpowers: China, Russia, and the US, especially the last one, would I be thrown out of the swift system as well?
How can we protect our property and sovereignty from the influence of this superpower? By building our military kinetically and electrically so we can impose a cost on any attacker that wants to inflict their rules.
The power projection game is a natural law that has existed for millions of years and is now evolving. And now the US has to make a smart move if it wants to maintain its role as the most powerful nation in the world.
Breedlove, R. (2021). "Sovereignism Part 4: The Rise of Property and Organized Crime". 08/25/22, de Medium Sitio web: https://breedlove22.medium.com/sovereignism-part-4-the-rise-of-property-and-organized-crime-a825c31f931a
Constitution of the United States. (2022). "Second Amendment". 08/25/22, de USA.org Sitio web: https://constitution.congress.gov/constitution/amendment-2/#:~:text=Constitution of the United States,-Second Amendment&text=A well regulated Militia%2C being,Arms%2C shall not be infringed.
Lowery, J. (2022). "Bitcoin is Worth every Watt. 08/25/22, de Mutually Assured Preservation Sitio web: https://mutuallyassuredpreservation.com/2022/04/21/bitcoin-is-worth-every-watt/
Lowery, J. (2022). "Want to Understand Bitcoin? Understand War”. 08/25/22, de Mutually Assured Preservation Sitio web: https://mutuallyassuredpreservation.com/2022/05/03/want-to-understand-bitcoin-understand-war/
PH. D. Liulevicius, V. (2020). "The Ottoman Attack and the Siege of Constantinople in 1453". 08/31/22, de Wondrium Daily Sitio web: https://www.wondriumdaily.com/the-ottoman-attack-and-the-siege-of-constantinople-in-1453/
Lowery, J. (2022). "Bitcoin Is Free Speech In The Digital Age: Jason Lowery: Full Interview". 08/25/22, de Anthony Pompliano Sitio web: https://www.youtube.com/watch?v=m8ddlgAIQO4
Back, A. (2002). "Hashcash - A Denial of Service Counter-Measure". 09/02/22, de Cypherspace.org Sitio web: http://www.hashcash.org/papers/hashcash.pdf
Breedlove, R. ; Back, A. & Lowery, J. (2022). "Bitcoin, Proof of Work, and The Future of War with Adam Back & Jason Lowery (WIM175)". 2/09/2022, de Robert Breedlove - What is Money Show Sitio web: https://www.youtube.com/watch?v=37w4vxeYL8U&t=2s
Crypto51. (2022). "PoW 51% Attack Cost". 09/02/2022, de Crypto51 Sitio web: https://www.crypto51.app/
Alden, L. (2020). "The Fraying of the US Global Currency Reserve System". 08/25/22, de Lyn Alden Investment Strategy Sitio web: https://www.lynalden.com/fraying-petrodollar-system/
Pysh, P.; Booth, J.; Moss, M. & Ross, J. (2022). Bitcoin Macroecononmic Landscape - Bitcoin 2022 Conference. 09/02/22, de Bitcoin Magazine Sitio web: https://www.youtube.com/watch?v=I2Q-HPCJ57k&t=1456s