When you look around the world today what is it that you see?
From a 30,000-foot perspective, it’s becoming clear that the world is undergoing significant change. And in the backdrop of this change, the digital transformation provides leverage, acting as a force multiplier for the trends underway.
It’s clear that we’re living through the start of a new global narrative. And in this narrative, we are beginning to see what will come next for society. As one example, Bitcoin is emerging as a foundational part of globalization in the digital age. Over the next decade, it will play an increasing role in global finance and geopolitical relations. Although it may seem farfetched at the moment, if you pay attention to the signs, you can see the process that will lead to this eventuality.
Bitcoin’s role becomes clear when you focus on what no one is saying out loud. That the war in Ukraine and the resulting Russian sanctions have breached a point of no return, violating a social contract between nation-states about how they govern the global monetary system. And we’re now entering a multipolar global environment with rapid rewiring of traditional financial systems and supply chains. These changes become more extreme as Chinese lockdowns harm the world’s supply chains which are heavily reliant on China’s manufacturing industry.
And Bitcoin’s role becomes clear when you take key recent events and combine their consequences with the realities of the digital transformation already underway.
The combination shows a clear path for where the world is heading.
And it looks like this:
As legacy systems of the late industrial age continue to break down we’ll see new multipolar factions emerge. Simultaneously, the digital world will continue on an exponential growth curve. And although the physical world may be multipolar, the digital world will continuously incentivize network unity. The globally accessible internet will seek out network effects and incentivize global connectivity. And through this contrast between a failing old system and an emergent new system, the stars align for Bitcoin to emerge as a global reserve asset useful to everyone and loyal to no one at the same time.
Below, I’ll unpack the details of what exactly that means and how we get there. First – I’ll address how a new multipolar order has become inevitable because of Covid and financial warfare. Then I’ll address how the digital transformation reinforces these changes and forces the world down a multipolar path. And finally, I’ll show why this reality is the ideal opportunity for Bitcoin to thrive on the international stage.
What No One Is Saying Aloud: The New Multipolar World Order Is On An Irreversible Trajectory
Covid, war, supply chain disruptions, and the introduction of global financial warfare all force society to change how it manages geopolitical relationships.
As a consequence, we are witnessing an irreversible continuation of the trends developing over the past decade, ie: rising nationalism around the world. Nations now have no choice but to prioritize domestic manufacturing, strengthen local supply chains, and diversify trade relationships away from the just-in-time style globalization that was popular before Covid. Importantly, the nations that don’t make these changes will continue to struggle. And the contrast between those that adapt and those that do not will become very evident.
This is, in other words, immense pressure on the world order to unbundle from a US-dominant & dollar led world order to a new system with many new geopolitical blocks. The reality of post-Covid life is that massive financial damage was caused by the failure of the globally integrated supply chain and a lack of diversification across the global order. And this is an opportunity eyed by China, India, and others as a chance to enhance their global influence.
But our global systems were not designed for a rapid transition to an everyone for themselves geopolitical order.
More importantly, the lesson learned by all countries as a result of the Russian war sanctions accelerates the transition to this new multipolar order. That lesson: nations must now diversify their foreign reserve assets to protect against future financial warfare. Specifically, nations must diversify their holdings in a way that protects foreign reserves from being frozen by hostile governments. For a nation to effectively diversify foreign reserves, it must also diversify its global relationships because, in many ways, foreign asset reserves are reflective of global trade relationships.
Russia central bank admits it’s struggling to find foreign-currency options as sanctions spur ‘structural transformation’ (yahoo.com) – “Since Western nations imposed economic sanctions on Russia, it has struggled to find alternatives for its frozen foreign-currency reserves, according to Russian Central Bank Governor Elvira Nabiullina.”
Russia is an extreme outlier example of why countries must diversify their foreign reserves. But it represents a precedent-setting event. All nations around the world watched the “West” levy financial warfare against an enemy, they saw the consequences, and all are now preparing to take preventative measures.
To not do so would be negligent.
We can expect that countries will diversify their reserves (and thus, their trade relationships) rather rapidly over the next few years. Ex: China and Saudi Arabia reaffirm strong energy ties as Ukraine war pushes up prices (msn.com)
It’s a straightforward policy choice that makes a lot of sense given how rapidly the geopolitical landscape can shift (another lesson learned from the Covid era). Especially as the world still struggles with the fallout from Covid supply chain challenges. And while most countries will choose to modestly diversify their foreign reserves across a basket of conservative assets (ex: as Israel has started to do), we can also expect that Bitcoin will eventually emerge as a winner of this diversification strategy.
But why would nations choose to opt for Bitcoin as opposed to accumulating more traditional foreign reserves? That answer lies in where we’re heading as a global society.
The Digital Transformation: Where We’re Heading As A Society
Fear of Covid led to lockdowns which led to a renaissance in remote work, location arbitrage, competitive governance, and accelerated the digital transformation. All these trends now converge, creating an unstoppable wave of human migration and social change. People are moving for a variety of reasons but now they are increasingly moving based on their lifestyle and political beliefs.
The net result is that remote work puts pressure on the global order to change as more people choose to relocate in large numbers.
What’s behind these changes? And how do they lead to people actually deciding to relocate where they live?
The short answer is that the digital transformation is creating a new social class system. And that means we need to understand two things:
1. The internet supports remote work which is changing how we live, work, and form relationships. Most importantly, it expands the lifestyle options we have to choose from when we decide how we want to live life. From a few standardized life paths and mass formation society to an infinite number of options and a fragmented multipolar society.
2. And as a result of digital technology and these lifestyle changes, society is splitting into two new social class constructs: location-dependent incomes and location-independent incomes.
When you combine the consequences of these two points, what you get is a society that is becoming highly mobile, fragmented, and more open to the variety of options created by a multipolar world order.
As more people can work online, they’ll become location independent. And as their work becomes untethered from their local communities, they’ll start to explore what the world has to offer outside of their local communities. This change in how we live is forcing a shift in the makeup of society. It’s changing our wants and needs along these new class lines. And that also means major changes in what we value and require from government policies.
We can look to the lessons learned from COVID to understand how the digital transformation creates a new social class divide. For example, think back to the Covid lockdowns. These policies disproportionately impacted people that physically had to appear for work. This is in stark contrast to people that were able to work remotely. The ones that earned money from home were able to make choices about relocating to homes that were better suited for lockdown lifestyles, while the people that had to show up to work in person had no such opportunities.
In general, this social divide was also reflected in policy advocacy. People that had to physically show up for work tended to advocate for policies that would make going back to work possible. While people with location-independent incomes tended to prefer more caution, longer lockdowns, and policies that didn’t conflict with their lifestyles.
Covid and the remote work class bifurcation also shed light on more meaningful consequences of this emerging class divide. It showed that people with location-independent incomes were willing and increasingly likely to relocate for a variety of reasons. Taxation, proximity to family, access to religious communities, outdoor activities, childhood education, and perhaps most importantly political ideologies.
Keep in mind that in a world with strict Covid policies, we’ve seen a corresponding rise in authoritarianism, imperfect democracies, and a breakdown in civil liberties across the world. Just look to Canadian Prime Minister Justin Trudeau’s recent emergency powers decree as an example.
These policies aren’t necessarily designed to punish people but rather to maintain the continuity of the old styles of location-dependent society. In many ways, Covid presented an opportunity for politicians to fight back against the digital transformation’s creation of a new social class system. A system that leaches power from late industrial age institutions.
Many Covid era policies were designed to maintain mass formation societies and prevent the fragmenting of belief systems that form as a result of the digital transformation. Ie: governments preferred a one size fits all approach to policy. A “my way or the highway” approach to dealing with Covid. The error is that this ignores the digital transformation and the emergent new class structure.
The reality is that when faced with policies that conflict with personal beliefs, location-independent workers are increasingly likely to leverage the tech-enabled exit, pick up their lives, and relocate to a place that fits their beliefs. They are literally opting for “the highway” approach.
This is all made possible and the reality of life with remote work on a large scale.
If you follow the trends in remote work on a deeper level and over a long enough time period, it leads to an inevitable conclusion. The multipolar world mentioned above is reinforced by a growing class of people that wants to relocate to communities that fit their lifestyle. Rather than work through toxic political discourse, the end result is to pick up and leave. From one size fits all to a world with a multitude of options.
At a large enough scale, that means countries will begin to balkanize, splitting apart into unique segments as people migrate to new places in pursuit of their ideological needs. In the process, we’ll see more global conflict, more fear, and a desire for mainstream authoritarian policies from people trying to hold onto the late industrial age way of life.
So, taking a step back, at the macro level, we’re seeing a fragmentation and reiorientation of nation-state alliances and trade. But we’re also seeing it at a micro-level as a result of the rapid formation of this new class structure.
Don’t fear. This doesn’t have to lead to a dystopian future. Because buried within this narrative of digital transformation is the emergence of a new form of money called Bitcoin. And Bitcoin and its decentralized function support the growing needs of this mobile, location-independent class of people as well as the fragmenting global economy that still needs to work together.
Here’s how Bitcoin will function as the glue that keeps the world moving forward in a positive way.
Bitcoin Is Glue For This Emergent Multipolar Global Order
In many ways, Bitcoin embodies the digital transformation. You can think of it as a technology of mobility because it helps people achieve location independence. It’s ideal for the growing class of remote work people because it’s a defense against a world with rising authoritarianism, censorship, and financial warfare.
In the context of this forming narrative, as the location independent class grows, they’ll need mobile monetary technology that is agnostic to the changing geopolitical order. A form of money that supports their freedom of movement while staying outside the political upheaval that is defined by the formation of a new multipolar world order.
Bitcoin is one of the major digital age fault lines that reinforces the digital transformation. Think of these fault lines as the technological and social flashpoints within a society where massive changes occur that lead to conflict between old and new systems. Bitcoin is a fault line because of how it fundamentally alters society’s relationship with money. Specifically, it removes the role of governments as gatekeepers of money.
As more work is done remotely, more people will travel and ultimately relocate around the world. And as a direct consequence of this newfound mobility, these mobile people will require a monetary system that is easy to transport and government agnostic.
But Bitcoin also supports the development of the new geopolitical model as well. Remember, nations are now incentivized to diversify their foreign reserve assets and trading relationships. As that happens, they’ll begin to diversify away from dollar-denominated assets. New trading partnerships will form and there will be an increasing value to holding an asset that has no political allegiances but is accepted by all. And Bitcoin can fill that role.
Ie: The world won’t become disconnected. Nations still need to trade with one another. But to prevent cascading challenges from financial warfare, Bitcoin provides an opportunity to coordinate trade on an even playing field.
Defining Bitcoin To Understand Its Role
Bitcoin is the globalist’s hedge against rising nationalism and authoritarian policies. It is the glue that binds a society that is simultaneously fragmenting into a multipolar world and becoming increasingly digitally connected. Bitcoin prevents the growing number of protectionist policies of the location-dependent class from negatively impacting the emergent digital and mobile class.
How? Because you cannot financially censor a holder of Bitcoin.
Bitcoin should therefore be viewed in the context of this new social class divide and the multipolar world order that is forming. And it should be viewed in the context of the digital transformation that incentivizes connecting the entire globe onto one network of integrated commerce.
To that end, Bitcoin Is:
Decentralized – it shifts society from a financial system managed by a few governments, international treaties, and select banking institutions to an uncapped number of network participants.
Trustless – it shifts society from financial systems using 3rd party intermediaries like central banks, corporate financial institutions, and their support infrastructure to a global digital network using cryptographically secured software that creates trust.
Permissionless – it shifts society from the need to abide by banking rules, norms, and in some cases permissions for how and when you can use your money to a system where you can use your money however and whenever you want. There are no gatekeepers and no rules preventing how and when you use your money. Borders don’t exist with Bitcoin and sanctions don’t matter.
Sound Money – it shifts society from a system where money is controlled by a small group of central bankers and competing political regimes to a system with software code and difficult to change rules governing how much money there is today, tomorrow, and in the future.
Bitcoin is a valuable hedge for the emerging multipolar world order and the location-independent class. Bitcoin fits within this new narrative as an ideal form of collateral. Something controlled by no nation or individual, but has increasing value in a digitally connected world. That is why governments will begin to adopt it as a foreign reserve asset.
The world is changing rapidly. You can see news stories everyday about the breakdown of late industrial age institutions. You can track the consequences of war, sanctions, and Covid supply chain challenges. And you can follow the emergent lifestyles of the location independent class of people. Don’t view these events in their information silos. Instead, focus on viewing them in the collective context of the new global narrative that’s forming.
That narrative: As the world reorients into a multipolar world order, the digital transformation is forming a new social class. These trends feed off each other and force society down a predictable path. And as a result of where we’re heading, Bitcoin’s role in society will increase exponentially.
The lesson, even if you don’t buy into this new narrative, is to start accumulating a Bitcoin position if for no other reason than a hedge against what might come next.
I’m tracking a new narrative that makes sense of society’s shift to the Digital Age. The goal: documenting how the Sovereign Individual class will emerge and giving you the facts and tools to successfully navigate digital life. I cover topics you can’t fully appreciate because you’re in the thick of it. Everything you need to know is delivered in a weekly newsletter.