| The Gunpowder Revolution As mentioned, the rise of the centralized nation state is a result of a quantum leap in military technology — beginning with the Gunpowder Revolution. This technological tour de force gave powerful monarchs the ability to overpower the decentralized age of feudalism. In fact, the very concept of citizenship began through collective bargaining with hordes of fighting-age men. The burgeoning nation-state, because of its newfound immense power and wealth, could strike a bargain directly with the mass of common soldiers who would fight in its uniform. This method was far cheaper and less troublesome than negotiating with a decentralized mess of lords, notables, and knights. These external, sovereign actors could resist the nation's agenda, whereas the citizen-soldier would find it far more challenging. This trend spurred a massive wave of "mergers and acquisitions" of feudal lords, marking the end of feudalism. The citizenship scheme depended on the fact that no large groups within its ranks could resist the nation's agenda and get away with it. Over time, a sense of patriotism helped to ensure that citizens would self-police, lowering the need for public hangings and other forms of capital punishment. (Nation states began transitioning from hard power to soft power.) Later, nations capitalized on the Industrial Revolution through centralization of industry and regulatory capture. While centralization is estimated to have peaked in the 1950s, we are now witnessing the slow decline of the nation state and the rise of something else entirely. But what comes next? The Network State Balaji suggests that the same sort of collective bargaining that built the nation-state can and will be used to create the "Network State." This is also in line with the Sovereign Individual thesis: With the rise of individuals able to take full custody of their wealth through cryptographically-protected cyber currencies, nations will move — out of necessity — from a centrifugal (or ballistic) model of governing to a centripetal (or magnetic) model. Meaning, the paradigm would slowly shift from trying to control populations to trying to attract them. The nations with the most to lose, of course — like the U.S. and China — might find this transition harder than those with the most to gain. Such as the El Salvadors, the Estonias, and the Lichtensteins. Liechtenstein, in fact, is a great example. Lichtenstein is one of the world's smallest nations but has the highest per capita GDP on the planet. I met the country's Prince Hans-Adam II in Washington D.C. at a convention. His book The State in the Third Millennium is a guiding light for all nations that want to catch this trend early. "The objective," Prince Hans-Adam said, "must be to transform all states into peaceful service companies." It's an old concept, he says, in many monarchies that you service the people. This is why, he points out, the crown prince of England, Prince Charles, has in his coat of arms, "Ich Ding" or "I serve." Hans-Adam admits he was moved in the past by Kennedy's famous speech when he said, "Ask not what your country can do for you, but what you can do for your country." And yet, after decades as a head of state and businessman, he now believes this is not the right question. We should instead begin asking what the state can do for its people… and how it can do it better than any other entity. So how could Crypto Capital influence this shift? In the same way the nation-states started… and the same way major corporations function today: collective bargaining. More on that Monday. [Ed. note: Check this out. Not only do we dive deeper into the philosophy of cryptocurrencies in our Big Book of Crypto, we also expose who (we think) Satoshi Nakamoto is… reveal the little-known true story of how Bitcoin really came about… and why the cypherpunk vision is actually coming true. Learn how to claim your copy right here at this link.]
Until next time, 
Chris Campbell
For Altucher Confidential | 
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