2021: the tipping point for peer to peer banking and government taxation

If you thought the wars over knowledge and culture were intense, I believe we’ll see much more interesting events unfold in the coming decade. The decentralized, uncontrollable economy where one lifetime employment is no longer central to every human being is something I’ve called the swarm economy, and I predict it will redefine society to an immensely larger extent than the ability to get rap music for free.

Thought-provoking prediction by Rick Falkvinge of the Pirate Party in Sweden, about the coming disintermediation of banking through anonymous cash, now used by advanced hackers only, and the problems this will cause for government taxation:

“It took ten years for music sharing to become easy enough to wildfire, courtesy of Napster. It took video sharing ten years to become easy enough to wildfire.

So if you want a crystal ball of the next battle, look at what many techies are doing right now, but that is obscure and hasn’t caught on; something that has a very clear and attractive use case once it becomes easy enough.

Here’s what’s on my radar: banking. There’s at least a dozen different variants of decentralized cryptographic currencies and transaction systems out there, very sophisticated and totally incomprehensible. There’s Ripple, BitCoin, ecash and others.

Just as BitTorrent made the copyright industry obsolete in the blink of an eye, these stand to make banks obsolete. These, or their successor, will hit a tipping point as soon as somebody makes it easy enough to use. The technology is there, the use case is there — there’s certainly no shortage of annoyance with big banking. It’s just a matter of usability now.

When this tipping point happens, there won’t be any central point of control over economies. It will be like everybody traded in cash, traditional anonymous cash, once again. Why, then, will this make governments dump a ton of bricks on the Internet?

Up until now, from the perspective of governments, it’s only been some friends complaining about a sales slump of CDs, so governments have given them some legislative breadcrumbs to shut up. How do you think governments across the world are going to react when they realize they’ve lost the ability to tax the public?

Imagine the ramifications of that for a moment. The governments of the world are on the brink of losing the ability to look into the economy of their citizens. They stand to lose the ability to seize assets, they stand to lose the ability to collect debts. No application of force in the world is going to help: everything is encrypted, and destroying a computer with any amount of police firepower will accomplish zilch.

All the world’s weapons in all the world’s police hands are useless against the public’s ability to keep their cryptographic economy to themselves. Won’t make a scratch.”

1 Comment 2021: the tipping point for peer to peer banking and government taxation

  1. AvatarMatthew Slater

    >The technology is there, the use case is there — there’s certainly no shortage of annoyance with big banking. It’s just a matter of usability now.

    I disagree. Modern banking is highly integrated with modern money. Its true that P2P banking solutions like zopa can take a lot more of the money-lending market, but that ignores the really important role of banks, which is to lend money into existence though the fraudulent fractional reserve mechanism. If we don’t borrow money from banks there won’t be any money except the coins issued by government.

    Unless the government starts issuing money, the way of this is for us to issue other forms of credit to each other. But local or niche currencies have a very hard time competing against national currencies, regardless of usability.

    We need to be much more courageous in developing and using alternatives to commercially produced debt money, especially because they are trying to make these things illegal.

Leave A Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.