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Hosts: Christian Keroles and Ansel Lindner
Guests: Greg Foss and Aaron Segal
In this particular episode of Bitcoin Magazine’s “Fed Watch” podcast, we sat down with two bright minds in the Bitcoin space, Greg Foss and Aaron Segal, to discuss the global process and the interplay between centralization and decentralization in society . It was kind of a panel discussion with Keroles leading our topics.
The current and future struggle between centralization and decentralization
Segal began by introducing five axioms of centralization versus decentralization, which will be the subject of an upcoming essay of his: First, the fluctuation between centralization and decentralization is one of the driving forces in history; second, centralization and decentralization can take many forms; third, decentralization is more stable in the long term; fourth, technology can be useful in both directions; and five, Bitcoin is a unique decentralizing force.
One very interesting point that Segal immediately made was how the system encourages people to buy-in by entangling their assets in it. When you start your career in the United States, you will typically receive benefits like 401 (k) contributions or even stock options. Most people’s savings, if not directly on the stock market or in government retirement plans such as Social Security, are dollar-denominated investments. As a result, the centralization of the system is stickier than one would expect based on the monetary nature of competing systems, as your savings depend on the survival of the current system. Bitcoin is the only way to unwind that investment and avoid a messy transition.
Chinese economy and growing centralization
Next, the panel applied this mindset to the situation in China to tease out the momentum there. What followed was one of my favorite discussions in Fed Watch history. Foss pointed out the inadequacy of the Chinese capital markets as small and immature. The impact of the recent CCP raids on listings and companies can only be understood in this context.
Segal added that the CCP appears to be shifting the economy towards new industries. My contribution was to anchor this discussion about China in the broader decentralization debate. Nation states will be exposed to the pressure to decentralize, but so will the entire international order. The previous era of international bodies such as the World Trade Organization (WTO), the UN and the World Health Organization (WHO) with considerable influence will also be affected by decentralization.
The way the US is dealing with the decentralization of Bitcoin
The conversation then continued by examining the US and the impact of this wave of decentralization on its society. We noted an increase in war-like rhetoric and how it affects these centralization dynamics, as well as a greater affinity for the rule of law. The increase in US bitcoin mining and the recent debate over the proposed infrastructure bill speak in favor of the US position in this regard.
The United States is unique in that it opens up many subjects. Panellists agreed that the US is a deeper market, based more on the rule of law, so it should handle this pressure for decentralization better than most other places. Foss and Segal discussed passive investing as a major problem, “passive investing is communism” is a direct quote from Segal. The conversation even turned to the bitcoin community’s new entrant, Jason Lowery, a US Space Force member who was writing a dissertation on bitcoin mining as a nuclear deterrent.
As you can see it was a jam-packed episode, this was just a selection of what was covered. It’s one of my favorites we’ve ever done and a must. Thanks to Foss and Segal for joining us. Maybe we can take this topic up on another show soon.
