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The Economic State Thesis

Cryptocurrency and the 3rd Arc of Humanity

Here is the thesis; The state doesn’t exist. What we call the state has been a necessary overhead for currency. Currency is the tool that allowed us to transition from roaming hunter gatherers to the first states. Even the current era of central banking cartels (last ~400 years) is an inevitability in the evolutionary path. Kind of like how capitalism brings about the end of capitalism by forcing capitalists to accelerate to a post scarcity society as they compete with each other. An inevitable path. We are now at an exciting point in the centuries-long journey of our species. We are entering the 3rd Arc, and the magical future of fantasy that exists within it.

Pre - Agriculture

This is the first arc. Not much to say to the whims of nature. Our destiny was not in our hands. Wandering the land, living in rhythm with nature. Not really thinking beyond the immediate future. Actually now that I think about it, it’s likely this will be what the end of our evolutionary journey will look like. Except a bit different. Hoverboards and interplanetary travel and all that.

Agriculture and Centralized Money (Giant State as Overhead)

The invention of Agriculture changed the trajectory completely. The first stand against the whims of nature. We decide where and when the food is. The most important stand because this is what allows our groups to grow beyond what can be sustained by the hunter gatherer lifestyle. This unlocks a huge upside potential; the division of labour.

A very dominant trait to have for a species. Especially knowing what we know about our brains and how they learn. The efficiency gains from compounding in one area of knowledge are exponential. The problem however is that while it works on a macro level, on an individual level it doesn’t quite work. Everyone makes different things and once these things get beyond 2 or 3 trading becomes difficult. The country as a whole is incredible but on an individual level it's stagnant. It would be like a cell that has all the ingredients but none are moving. No chance at life.

So we need a way to create movement. So we have currency. However currency does not exist in nature. The best currency is one that is easily divisible (to account for different relative values), easy to verify (no forgery.) In order to have such a thing you have to basically invent the state as we know it. Along with all the bells and whistles. An army, police etc. Along with rules for this entity, what we know now as different forms of government.

This entity, given it’s control over the most important resources, the source of the movement, allows it to have a very strong say in how the whole functions. Fast forward to the 1600s and the rise of the banking families that started the renaissance. Of course there would be a split between the money managers and those managing the entity rules of the society. It’s grown too large to function as one. A sort of system of balances and checks, both believing the other holds true power.

Which is where we are today. At the end of the 2nd arc because we have now a new system for money. Which removes the overhead that was necessary for the past 10,000 years.

Decentralized Currency (No Overhead)

We can now have a currency which is divisible (virtually infinitely so), easy to verify and essentially impossible to forge. A child can create this currency in a matter of minutes and send it out into the world. What would have once required an impossible amount of resources.

The rules and requirements have changed at the most fundamental level. An evolutionary equivalent of the invention of the cell. The possibilities are likely beyond what can be contemplated at the moment. The change is too fundamental. The 3rd Arc of humanity.

Curious that the timing of that would line up with the invention of AGI.

Anyway that’s it. Thanks for reading!

-Syed

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