Balaji Srinivasan: What Happens When Bitcoin Wins | Bitcoin Asia 2025

All right, guys. Okay, so I'm going to talk about when Bitcoin wins. Not if, but when. And when Bitcoin wins, actually, the battle begins. And I want to go through a few things, just kind of talk through worldview and then next steps. So you know, what, what actually will happen when Bitcoin wins? I'm going to go through basically several.

Different aspects of it in some scenarios.

So first, if you're interested in these ideas, we actually have a conference in Singapore on October 3rd. So you should come out there. Network State conference. So this is kind of the very quick version of these ideas. And then if you want to build.

With us, come to Network State 2025 in Singapore.

Okay, so when Bitcoin wins, it ends the Fed. And what does that mean? When Bitcoin wins, the Fed loses control. The Fed is actually not just the central bank of the United States, but it controls many other banks, central banks worldwide, from Japan to Canada to the UK and that those then in turn control banking licenses. And they can freeze and seize funds. And of course, they can print money. And Bitcoin exists outside the Fed's video game. Okay, so the Fed can freeze and seize everything within this network of banks, but it can't freeze and seize Bitcoin. It can't introduce 21 million plus more. More than the 21 million bitcoin. So when Bitcoin wins the Fed.

Oh, further.

Yep, when Bitcoin wins, the Fed loses root control. Okay, number two, when Bitcoin wins, gyrating rates get replaced with predictable policy. In the top right, there is Fed interest rates, and they go like this, like this. And that's just a function of feels. There's actually a Wall Street Journal article, for example, that actually there's a Fed governor who admits that what he felt like in the morning, he decided, okay, we're going to raise rates like half a point. And it's literally just feels they scroll the feed and they put in, you know, the interest rates and so.

Oh, really? Okay, all right, let's go with that. When Bitcoin wins. All right, Is that better? All right, let's do that. Great.

Okay, so just gyrating rates get replaced with predictable policy. What happens is you go from the.

Interest rates going up and down and the Fed just monkeying with everything to something which is algorithmic and predictable monetary policy, which is Bitcoin.

And that's just this enormous leap forward.

In terms of the ability to plan for the future and not buy something and have rates hike to the moon or crash to the ground. And you don't have the entire world thinking about what the Fed is going to do and the entire, you know, financial system architected on reading the tea.

Leaves instead it's very clear what the.

Issuance rate is going to be. And so you've got algorithmic monetary policy. Then when Bitcoin wins, payments become packets. Okay, so this is Wireshark showing the Bitcoin protocol. And you can see that essentially there's no reference to a bank, there's no reference to estate. This is purely the network. Payments have become packets. And this is essentially this international network as opposed to individual states network. When you actually get under the hood and realize what's happening here, it's actually really amazing. When bitcoin wins, by the way, it wins around the world. It doesn't just win in any country. This is a map from 2024. You can argue maybe the percentages in this country or this country, but you can't argue with the fact that Bitcoin is a global phenomenon. It's not the state, it's a network. And when bitcoin wins, it can win very fast.

So when the faith in currency in.

Lebanon went to zero, when the full faith and credit in the Lebanese pound went to zero, Bitcoin was there and it just went vertical like this.

Okay, so hodl, when bitcoin wins, it.

Can win very fast. So next, when Bitcoin wins, Keynesianism falls like communism.

And so basically when Bitcoin wins, Treasuries will fade.

People talk about U.S. treasuries and more generally Western bonds as the risk free rate of return, but really they're kind of the return free risk.

And if you've looked at the last.

Five years, it's been the worst bond market ever with yield spiking. And if you don't know what this is, you know, just look it up if you want, but, but essentially this is something where people just don't. They need to have a very high rate in order to hold on to US and western government debt. And this is only going to get worse as inflation picks up. So you stop saving in US government bonds and you start saving in the hardest money around, which is Bitcoin when Bitcoin wins. Also, real estate falls in real terms. So in the west, since the 2008 financial crisis, the Fed has been printing money to buy mortgage backed securities, thereby taxing the population in multiple ways, first diluting them down to the printing and then bidding against them in the market, which is why it's so absolutely crazy. In terms of where the housing prices, rental prices are in the west, this is something which is a upward redistribution of wealth to asset owners and especially real estate owners and property owners at the expense of renters and those coming up in their career. And the counter attack on this is when bitcoin wins, real estate falls in real terms and people stop actually using houses as an investment and they invest in bitcoin. They hold Bitcoin, really, they store value in bitcoin in houses, apartments, that's for utility. So when bitcoin wins, fiat also faces global competition. If you know what happened with local news, when all the local newspapers got online, suddenly their local geographical monopolies of paper newspapers didn't matter anymore. They all compete with each other and most of them failed. And only the global papers, the Wall street journals and Financial Times and so on, survived. And then they too essentially collapsed against social media and a truly Internet first media. The same thing is about to happen with the introduction of all these stablecoins around the world. As all these coins go on chain and they have to, all these local currencies go on chain, they're going to have to, then they're all going to be in competition with each other. And the ones with bad monetary policies, anybody in their country, they have no geographical monopoly of cash anymore. Just like the newspapers lost their geographical monopoly of paper, the distribution, the trucks, that didn't matter anymore. Just like the distribution of the paper notes doesn't matter. So every currency, every national currency is in competition with every other national currency. And most of them won't survive, only the very best ones will. And so that means cryptocurrency will take over. Because eventually, just like Twitter and social media beat NYT and Wall Street Journal and those in turn beat local media, so too bitcoin beats stablecoins, the best stable coins which beat the bad currencies. So fiat faces global competition and that means states face accountability in a way they never had before. There's actually now check on what they can do when bitcoin wins Fiat billionaires get flipped. And what that means is, you know, several years ago with at Coinbase, we calculated that somewhere between $100,001 million per bitcoin, half the world's billionaires become crypto. And that means all fiat fortunes get diluted down. Because there's around 2,000 something billionaires and somewhere between 100,000 to a million dollars per bitcoin, you have 2,000 something new crypto billionaires. So all wealth becomes crypto, all property becomes cryptography. And that means global wealth becomes crypto. And so that's what we call the billionaire flippening. And that's kind of already underway. And you're going to see that in the next few years. And that means genuinely risk tolerant capital, because that is capital that accrues to individuals as opposed to, you know, things that are attached to the western state or accumulated in nonprofits. It's really for those who are contrarian, but. Right. And bucking the system as opposed to those who are conforming to the system. B U C K I N G okay, next, when Bitcoin wins, the printer runs out of toner. Okay. In 2010 there's this really unusually honest article called how to how to spend 1.25 trillion. And NPR unusually uncommonly at the time, admitted that the Fed had a unique power. It could just print a trillion dollars out of thin air. Now if you think about what it takes to make a trillion dollars, that's like selling $1,000 iPhone to a billion people. That's a trillion in revenue. To make a trillion in profit is another thing entirely because your thousand dollar phone will have, I don't know, whatever $100 cost, right. You'll have to discount it by the time you get to user 300 million, let alone 1 billion. So to just print a trillion dollars out of nowhere is just this absolutely gigantic seizure of wealth that's distributed across billions of people worldwide, not just 300 million Americans. So the entire money printer go Burr era just goes away completely and the printer runs out of toner. And these governments actually need to work for a living. It's just a completely different world. And when bitcoin wins, it becomes the government of governments. So in the 20th century, there's this book, there's another book called I think something like Gold, Blood and Treasure by the Army War College. And essentially the point is that only in the 20th century did you actually have total war, because governments had no constraint on their spending. They just threw more men, more guns and so on. That's why the world wars were so damaging before then. Governments were actually constrained by gold, which they couldn't print. And so when Bitcoin wins, it actually becomes a government of governments. It's like a fusion of the progressive idea of the world government and the libertarian idea of limited government. It's the government of governments that ensures the governments are limited because they just can't spend that much. Right? There's a limits on how much they can siege. It's like a minimum wage, except it's A maximum tax. So the max tax, not just the minimum wage. It's a government of governments. And so when Bitcoin wins though, the battle begins. And the thing is that nothing just rises to infinity. It's never a totally clean exponential. As you hit a new level, there's pushback and, and then it goes down and it goes back up. So there's going to be many kinds of attacks. For example, there will be attacks on coders. The Roman Storm trial free Roman Storm is just the beginning of this. I think that in general, if you are a programmer, you should be in a jurisdiction that you think is going to respect your safety. El Salvador could be that for many Bitcoin developers, potentially the uae, when Bitcoin wins, the cryptography will be attacked. So quantum cryptography is not a theoretical thing. It is something that poses at least some danger to ecdsa. And there's a migration strategy now. But that migration strategy would mean everybody has to send from their address to a new quantum proof address. And that might take a very long time. And so we need to actually think about this, put research into this, potentially figure out a better mechanism here. So assume the cryptography will be attacked because you know, it'll just become a life or death scenario for many of these states. When Bitcoin wins, the network will also be attacked. Right now, just recently the bitcoin network passed 1 zeta hash per second, which is a crazy amount of hash power. But if you calculate it out, that's somewhere between 10 to $100 billion in hash power. If you're just going to buy that from scratch and rack and stack it, that's actually on par with, with some of the AI data center spends. So I'm not saying there's a large number of actors worldwide who can do this, but there are some. And we're going to have a hash rate race at some point and that's going to be a fairly big deal. So the network will be attacked and we're going to have to see whether a coalition of different states and companies can rack and stack enough hash rate in order to keep the sort of balance of hash and prevent one entity from getting 51%. When Bitcoin wins, software will also be attacked. The biggest vulnerability to bitcoin arguably today is Apple, Google and Microsoft, because between them they have trusted access to effectively push a backdoor to any computer with Windows Update, with software update, with updating Android phones and Apple Phones. This is something which I think is under theorized as a practical attack vector. And so you can use Linux devices. That's a possibility. You can in theory scale some new operating system to a billion users, but in practice, the defense here may just as a bitcoiner be joining these big tech companies. You know, Tim Cook actually has said publicly he holds some Bitcoin. And so it may just be something where you join the big tech company and you just make sure that they're not doing this. Look out for basically the civil rights and property rights of all the bitcoin holders worldwide. When Bitcoin wins, the community will be attacked. FDR's 1933 gold seizure is a prototype for the kind of thing that will happen. States that are actually running out of money will get very desperate and very, very, very crazy. And so all kinds of crazy things are going to happen. So next 10 years are going to be wild. And so what I suggest is to pick your location. Your physical location is much more important than, than your portfolio allocation over the next 10 years. You want to be in a place that respects property rights.

And so with all that said, when.

Bitcoin wins, it's time to build. And I do think that basically we're going to be moving from the two party system to the, or the one party system to the thousand city system where anybody can pick worldwide. And why is that good? Because that means freedom of choice. And if you like it, you can keep it, you can stay in your state and if you don't, you can move. Just like at age 18 you choose your college, at age 18 you'll choose your country which are actually already things that are happening where essentially you know, lots of students who you know, used to apply to the west, they used to get a student visa at MIT and then they'd get an H1B and then they would go and get a green card. That process of applying to college, company and country just becomes applying to a country. At age 18 you get into the best country, the best city, the best community you can. And that's already starting with the startup societies. And that's what network state is about. And so what comes next? Well, you know, I wrote this book in 2022 and we've been holding this conference and we actually opened up a network school and we actually have a bunch of network schoolers here in orange over there. So, and so, you know, if you're interested in this kind of thing, you know, after bitcoin wins, what comes next? If you want to build, if it's time to build, then come to Singapore on October 3, go to ns.comconference and that'll be the full day version, which is after bitcoin wins. What next? And I think we can use all of our cloud capital to rebuild the land, to build cities and build communities. So thank you very much and see you soon.

Sam. It.