National Security in the Digital Age: Bitcoin, Geopolitics and the Stakes of the 21st Century

As Bitcoin matures into an institutional force, the next plank is nation-state adoption. As nations jostle between one another in an increasingly

As Bitcoin matures into an institutional force, the next logical step is its adoption by nation-states. With the increasing polarization in the world, good writing on Bitcoin and statecraft can help define the lines of engagement. A new book, National Security In The Digital Age, serves that purpose by presenting individual chapters on various aspects of the topic, written by experts on the bleeding edge of statecraft and Bitcoin. This book is perfect for legislators and policymakers to understand the unique advantages of Bitcoin.

1. We are at a unique geopolitical moment, where the dollar system since 1973 is being challenged by new technology.

Most writers refer to the dominant position of the United States in overseeing the US dollar system and its consequences. Since 1973, when President Nixon took the US dollar off the gold standard, global demand for fiat-driven US dollars and US debt has been the cornerstone of the world economy. This has led to unanticipated consequences, however, perhaps the most significant being the migration outwards of the manufacturing base of the United States to a more globally distributed economy - a shift that has primarily benefited China. China now has the capacity to manufacture military goods like ships at a very rapid pace and has become a near-peer that can challenge US military supremacy. Notably, China and Russia are now working together in many ways, with China providing CBDC and M-Bridge coverage to create a hedge against US dollar sanctions, while Russia provides kinetic cover with private military companies in Africa.

However, the world is pulling away from that system because of the sanctions on Russia and other factors. The US dollar share of foreign reserves is at a low not seen for a few decades. Can Tether and US-dollar stablecoins provide some amount of cover as bottoms-up demand for the US dollar (eurodollar system) blossoms, as Matthew Pines brings up? Does Bitcoin play a role in wrestling away Middle Eastern countries from China, as Robert Malka wonders? What will happen in Africa, an emerging energy superpower, documented by Ben Kincaid?

2. Techno-authoritarianism vs. freedomtech, like Bitcoin and Nostr, is a defining battle being played out in many continents

While the first chapter focuses on the Great Power Conflict, namely how China has bent the US monetary system to its advantage, the second focuses on Africa and the “African village” and the roots of bottoms-up adoption of Bitcoin vs. central bank digital currencies like the e-Naira. Fedimint offers a view of leveraging the democratic concepts of the “African village” through groups of peers transacting with one another in Bitcoin.

This angle is especially interesting because it highlights how Bitcoin mining can accelerate the escalating growth of energy across the continent (seen, for example, through projects like Gridless). This global conflict comes to the Middle East as the energy superpowers of the 20th century aim to welcome new technologies like Bitcoin while maintaining political control. China’s export of technical standards for the mobile Internet, central bank digital currencies, and digital authoritarianism worldwide are cited in detail.

But the United States still has a dollar advantage, and the book argues through the use of many experts - with the shift to electricity being the dominant force, it can employ Bitcoin mining, a renewed look at nuclear power, and the right policy towards grid management to create an alternative. The ability to leverage freedomtech like Bitcoin just as the United States embraced neutral cryptography, email and Internet standards (eventually) could serve national security interests.

The most interesting thread is how Bitcoin and adjacent technology like Nostr have pools of bottoms-up demand that are resistant to top-down force from those looking to hedge against CBDCs to merchants looking for lower transaction fees. As China’s Bitcoin mining ban fails to dent Bitcoin’s effect, which is detailed in an entire chapter, it’s clear this discussion is ongoing.

3. Bitcoin, not “crypto”

The book seems intended for policymakers mostly - it weaves sophisticated arguments about geopolitics into an accessible introduction to the energy dynamics of Bitcoin mining with very specific examples of how it works with ERCOT, the Texas grid, and how it can stabilize the grid with expert advice from Pierre Rochard, VP of Research at Riot. An entire chapter is devoted to “illicit finance” and the tradeoffs between Bitcoin existing with the traditional financial world and a place where nation-states move money for nefarious reasons contrary to American interests, as well as the anonymity of cash versus the pseudonymous nature of Bitcoin.

The beginning of the book dives deeply into the geopolitics of Bitcoin - the middle is more technical and is meant to explain different facets of Bitcoin, Bitcoin mining, and the Lightning Network to people, along with various use cases such as creating and stabilizing energy grids. Towards the latter end, we see the real power of Bitcoin - creating a neutral platform that can redress the lack of trust after generations of racial bias (per Ian Gaines), a lower transaction cost for remittances, and navigating healthcare, inflation, and corrupt officials in Africa.

The book makes