Photo by Jezael Melgoza on Unsplash

Right now, fortunes are being made in the crypto markets, but this keeps distracting us from recognizing the long-term effects of decentralization on modern-day society. Whether Bitcoin reaches $500,000, Ethereum becomes top dog, or another unknown successor takes the top spot, this does not matter when you realize the bigger picture. Satoshi Nakamoto’s whitepaper will start to transform the world in profound ways that we can’t truly comprehend. But what we can say is that it’s about to change a lot more than just the monetary system.

If you remember why Nakamoto created Bitcoin, it was a quiet protest against government tyranny, a people’s currency designed to eliminate state intrusion. Before blockchain existed, governments could ban any medium that enabled people to escape financial repression. In 1933, FDR passed Executive Order 6102 which banned citizens from hoarding gold, forcing them to turn it in. Previous attempts at digital currencies also failed. e-Gold was a disaster, and Liberty Reserve, which branded itself as a centralized digital currency system, collapsed after authorities shut it down.

This time, however, because blockchain is truly decentralized, governments, for the first time, have failed to stop the crypto movement from spreading like wildfire. Now there’s a technology that allows people to bypass the legacy system, anything is possible. That’s the difference, the game-changer, and the subsequent progression will be the rise of decentralization outside of finance and economics. It’s such a transmissible idea that it will start to seep into the mainstream, transforming multiple industries and power structures.

But its most powerful influence will be on politics. As our world becomes more divisive, with seemingly no way back to normalcy, we’ll have to make a choice whether to adopt a “centralist” or a “decentralist” lifestyle. It doesn’t matter whether we think this is good or bad. We have consciously or unconsciously embraced the convenience of overgeneralized labels. This has become part of our common knowledge game, and there’s no turning back.

Despite its toxicity and divisiveness, the decentralist-centralist divide is likely to persist and will come to change more than how people think in society. It will determine how society is designed and laid out. It will bring about the mainstream adoption of decentralized areas, with the pioneer model being “private cities”. The easy way to think about a private city is to imagine Monaco without the royal family and the excessive wealth. Citizens are not exactly rich or completely “free” as they still live under the rule of law of the host country. Though, as private cities have rules themselves, usually low taxes and lower regulations that the host country has agreed upon, citizens do have more economic “freedoms” (which is somewhat subjective).

From remote parts of South America to North American metropolises, fully decentralized cities will emerge alongside legacy societies. This is already happening silently behind the scenes with the number of private cities continuing to rise. Sarah Moser, an associate professor of geography at McGill University, has located over 15 private cities plus other areas where public-private partnerships have started development. The most notable is Songdo in South Korea where real estate giant, Gale International, and construction giant POSCO have built a private city estimated to house over 130,000 people. On China’s Danga Bay lies Forest City, the biggest private city in the world, which will eventually house over 700,000 people. Even corporations have jumped on the bandwagon with Google creating a Toronto-based private smart city.

If you think it’s a crazy idea that the world will embrace private cities, recall the initial skepticism about the iPhone. “If new products are convincing, they can subsequently revolutionize entire markets. Today, virtually all cell-phone manufacturers produce iPhone-like smartphones, because nothing else is in demand,”says private city pioneer Titus Gebel in his Free Private Cities manifesto. “Around 1900, if asked about their most preferred transportation improvement, most people probably would have answered, “faster horses”. The fax machine was judged by the commissioned market research institutes as an unwanted gadget. If comparable surveys had been conducted before the first iPhone appeared, something similar may well have been the outcome.”

In Yuval Harari’s bestselling book, Sapiens, he reminds us that discounting the threat of small but radical concepts and ideas makes us look silly in the long term. When Christianity, Islam, and the Bolsheviks were small sects, no one could have predicted how they would shape civilization for centuries to come. We must recognize history is chaotic, not deterministic, and any idea can become the new norm.

If so, the manifestation of the decentralist-centralist divide in society will be an extremely slow process. It takes time for crises to develop to invoke significant change. Economy bears Harry Dent and Peter Schiff have been predicting the U.S. Dollar will collapse every year for decades but have been wrong and could be wrong for another generation. Not to mention it takes decades to build legacy cities from scratch — as China’s ghost cities demonstrate.

Eventually, we’ll have to make a decision whether to participate in the legacy system or secure our place in a future private city, depending on our philosophy. We will have to choose between free stuff or “freedom”. Centralists will live in the legacy system within state boundaries while decentralists will rush to apply for residency in private cities that have a “get government out of the way and let the people prosper” type approach.

Imagine cities that don’t use their host country’s currency but everything is denominated in Bitcoin, Ethereum, or even a city-issued coin. All financial services, insurance, currency exchanges, anything else you can imagine, exist only on the blockchain. No pesky central bank, no annoying central bankers, who think they know better than the market, has the power to set the price of money. Instead, the laws of numbers, maths, and physics run society. The “digital nomad” movement will become more attractive as you can not only jump from city to city but private city to private city with limited credentials.

Meanwhile, the elites will create their own centralized versions of decentralized systems. But they will only exist inside the legacy system, and the centralists will have to jump on board. If you think China’s social credit system can’t come to the western world, where they digitally punish bad behavior such as jaywalking by deducting your “privileges”, look at some of the latest policies that western world politicians have proposed. Vaccine passports are highly discriminative, pushing the most marginalized into a tougher position, yet many support it.

This will only fuel the fire more. Everything the elites do to try to stop decentralist outflows will make it worse. What happens when half the population feels their freedoms are under threat? What happens when half the population reaches breaking point? Something has to give. This is civil unrest waiting to happen, but it does not have to end in a civil war. The way out remains simple: the elites must admit their system has failed and come clean. The size and complexity of government have to shrink otherwise the decentralists will flee, otherwise we’ll witness the segregation of society manifest as decentralist private cities and centralist legacy cities, a hunger games-esque reality, a Matrix-esque world where the elites are the robots, enabling the decentralists to live within Zion’s walls.

The rise of private cities and the resulting bifurcation of society is not a certainty but if the financially repressive status quo of rock-bottom interest rates, rampant inflation, and out-of-control money printing continues, it’s unavoidable. In an interview between Marco Wützer — who’s somewhat of a private city thought leader — and investor George Gammon, they say that when it comes to government tyranny, everyone has a limit, a boundary that, if crossed, means that they will call it quits and leave. “People should draw a line in the sand,” Gammon says. “If the government does this, I’m gone.”

We don’t know what will trigger a mass exodus from the legacy system by decentralists, but it’s likely the elites will implement a game-changing, ultra-radical economic policy, enough to cause a mass departure. Usually, it’s only the affluent who participate in capital flight (when assets or money rapidly flow out of a country due to the state implementing radical economic policies), but since private cities are not just for the wealthy, decentralization will allow people from the 99% — with a decentralized bias — to escape to private cities, to bypass financial tyranny, and to live in a society that implements new-age monetary standards.

The rise of freedom movements — cryptocurrencies, private cities, and civil unrest — is a sign that more and more people have realized the elites will never change the system unless the people take a stand. Why they won’t alter the status quo is up for debate. Maybe they can’t grasp the unfathomable complexity of the modern-day system? Maybe they’re overcome with greed? But what we do know is that the elites in charge will maintain the legacy system if it enriches them — which it does. Those fed up with the old system will have to take matters into their own hands, not through a brutal civil war, but through a civilized, peaceful “transition”, either leaving the country or moving to — or into — a decentralist city or area.

This is the type of crazy reality we may have to live in if governments, central banks, and other institutions fail to acknowledge that their policies are slowly creating the catalysts needed to form such a bifurcated world. We need the elites to realize their multi-decade project of suspending economic gravity has failed. We need a financial reset to prevent private cities from becoming the radical new norm. Will our leaders finally change their minds and try to fix the monetary status quo instead of propping it up indefinitely? Probably not. After their recent actions and decisions over the past few decades, achieving a soft landing has become a near-impossible task, and that’s perhaps the scariest part of all.