What Bitcoin And The U.S. Constitution Have In Common

With every election cycle comes many dinner-table debates about the Electoral College. Why does it exist, and why does the United States not simply decide its President by popular vote?

The answer is a fascinating reminder of what the most powerful nation on Earth actually is, and of the founding document that it is still nominally based upon. Moreover, it reminds me of why I love Bitcoin – the second greatest “Constitution” that man has ever written.

Contrary to modern understanding, the United States is designed to be just that: a group of states – mostly independent jurisdictions held together by a federal government with limited powers.

The U.S. Constitution defines what these powers are: taxation, coining money, commanding a military, and other things. Meanwhile, the states have sole control over matters like education, local law enforcement, and family law.

In its totality, the U.S. is not meant to be a democracy, but a Constitutional Federal Republic. It keeps day-to-day governance local, where the state governments near to their people can autonomously maintain the domestic and personal interests of their citizens.

As far as elections go, the Electoral College is designed to give smaller states relatively larger authority per capita next to larger states so that they still have a voice when selecting the next President. It protects them from a tyranny of the majority, so Presidential candidates still have reason to campaign in their interests alongside the densely populated city centers in other areas of the country. It is a tool to decentralize power from elites physically and culturally removed from them.

While the constitution can theoretically be changed, the threshold of consensus required to do so is deliberately high. This makes the Constitution a foundation of almost inhuman stability, protecting the States from an overreaching federal government like the one they fought a war to overthrow.

This is the architecture of the founding fathers who sought a robust system that could preserve the freedom of its states and citizens at all costs. Centuries later, a pseudonymous cryptographer named Satoshi Nakamoto took further inspiration from the fathers’ efforts to decentralize government with a document designed to decentralize money.

Released in October 2008, Bitcoin’s founding whitepaper accurately describes the Bitcoin protocol widely adopted today – a digital money system for all designed for freedom of control from third parties. Since disappearing from the project in 2011, Satoshi left his project in the hands of a decentralized community without a clear, efficient process for agreeing on further protocol changes.

Much like the constitution, Bitcoin’s messy consensus process made it incredibly difficult to change, only undergoing a small handful of backward-compatible upgrades over the last decade. Likewise, just as the stability of the constitution helped create a nation of stable human rights and freedoms, Bitcoin’s stability has made it fertile ground for developers to build long-term financial infrastructure, and for investors to store long-term wealth.

Just as the United States has a vertical separation of powers between the union and the states, Bitcoin has its own “states” better known as “layer 2” networks. An L2 is a separate protocol built on top of Bitcoin to give it extra rules and powers like lower costs and speed with code and rules customized to their needs – without affecting the stability of the main Bitcoin blockchain.

Yet Bitcoin improves upon the Constitution in one glaring way: the Constitution is written law, and Bitcoin is active code. While written law is open to poetic interpretation by humans, code simply executes in one, objective, transparent, permanent manner.

This one vulnerability has weakened even the strength of the Constitution over several generations. Creative interpretations have caused the federal government to grow to a size that would have its authors rolling in their graves. An institution where most of its employees once worked for the post office now demands $6.75 trillion per year, according to the treasury department.

Such excessive spending has not only abandoned capitalist principles and the autonomy of the states, but also caused inflation of the currency that has eroded the wealth of its citizens. Unlike the federal government or central bank, Bitcoin’s promise to maintain a fixed currency supply is no “promise”: it is a law enforced by code and math, rather than humans.

As a simple but stable system of cryptographic property rights, Bitcoin is a digital, modern-day solution to the problems the U.S. Constitution sought to solve: protecting us from humans who seek to tyrannize us.

In the internet of value, Bitcoin will be the bedrock for several “states” with much better promise for long-term stability and flourishing without their foundation collapsing under them.

If the founding fathers were alive today, they would have been Bitcoin developers.