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Applying Crypto Decentralization to the Physical World: Public Utilities

With the development of cryptography and decentralized networking technology, we are beginning to see hints of a possible future in which the violent force of government is no longer necessary nor possible. Even in its current stage of infancy, this technology has already had a real world impact on the overly aggressive actions of governments in trying to regulate what consenting adults put into their bodies. With DarkNet drug markets, drug dealers and buyers are now able to conduct business with each other while making it much more difficult for law enforcement officials to track them down and arrest them. But, decentralization technology has implications that extend far beyond buying and selling illegal drugs. Crypto-currency can rid the world of destructive central banks and decentralized networks can preserve information that could help liberate an oppressed population from tyranny. Thus, a self-interested desire for profit and the advancement of technology, not political or governmental action, has set in motion an economic process that could potentially make it possible for society to peacefully operate without governments.

However, there is one glaring flaw in this new technology. Presently, all decentralization efforts have occurred online, in the digital world. So far, we only have peer-to-peer networks, inside of which we can construct websites that are harder to track down, and decentralized currency, namely Bitcoin. Both of those things require access to a computer or smartphone to operate, which in turn requires a source of electricity. Herein lies the problem; electricity is totally centralized and controlled by governments. Essentially all developed countries run on a power grid, an interconnected electrical network that distributes energy throughout the country. If a government, or group of governments, felt too threatened by any of the decentralization efforts happening on the Internet, they could simply shut down their power grids and effectively destroy all the progress made by the crypto community. This action would be a radical and drastic measure, of course, but it is not outside the realm of possibility. There can never be full decentralization and therefore a neutralization of government violence until public utilities are privatized and decentralized.

In fact, most of our life sustaining resources are either completely controlled by governments or are highly regulated by them, so that no goods made from those resources can enter the market without government permission. Now, while decentralized currency can ultimately make governments completely voluntary—making them nothing more than a private enterprise competing on a free market and forcing them to live within their means—the currency has to first become accepted by the general public in order to have that effect. Until then, the governments will still maintain a monopoly on the issuance of money, thereby maintaining their control over public utilities and basic life sustaining goods, therefore keeping control over the sustainment of our lives. If the acceptance rate of Bitcoin reaches a point at which the digital currency seriously threatens the government’s monopoly on money, they can simply start taking away all of the basic life necessities that they control.

The national authorities would likely start by using city governments to single out crypto-currency users and cut off their water and power. But that would only prove to be a minor inconvenience for those who are knowledgeable in cybersecurity; the government would have a very difficult time finding these people. Even if they did find one such person, he or she could simply go to someone who is even more invisible and use their resources to continue their lives in the crypto world. If singling out individuals proved to be fruitless, and the government in question wanted to stamp out decentralized technology bad enough, they could then attack the entire power grid. If, for some reason, shutting down the power grid did not kill the crypto community, the government could start shutting off water or halt the approval process for putting food to market so that people will not be able to drink or eat. Then they will say, “We do not want you to starve, we only want you to stop being criminals! Just submit to us, and your food, power, and water will be returned!” Surely, such an act would be cruel and ruthless. But governments will do anything to their subjects if it means sustaining their own existence.

These scenarios are very far-fetched and do seem unlikely to happen, but anything is possible when individuals are directly challenging the very existence of government as we know it. Therefore, the principles of cryptography must be applied to the physical structures that provide power to the digital world. We cannot actually encrypt water, electricity, or food, but they can still be decentralized.

Water and electricity can easily be made self sustaining and independent of bureaucratic control. Many people already get their water in a decentralized way by digging wells rather than using a city’s water supply. In the United States, citizens who live outside of a city, in the county, do not have access to public water and must dig a well. Imagine if everyone had a well, water would then be completely decentralized. The police could come and destroy one well, but everyone else would still have access to water. Just like Bitcoin and the DarkNet, authorities do not damage the entire network in the slightest by eliminating one access point. They must take out every single person involved in the network in order to completely eliminate the network. So if every person in one country, say the US, used both Bitcoin and well water, then what a task it would be for the governments to take away the water supply and dehydrate the population into submission! It would be an impossible task, the government would go broke before they even came close to destroying every household’s well because, at that point, they would have already lost their monopoly on money since everyone was using Bitcoin.

Wells are just one example of how access to water can be decentralized. Two main problems with a well-water system is that:

1. Wells are taxing on underground water supplies

2. Modern well pumps run on electricity, which makes them dependent on the centralized electrical grid.

However, new ways will surely developed that will use and recycle water much more efficiently. So, wells likely will not be the main solution for decentralized water.

As for electricity, innovation for alternative energy sources is going on constantly. Green energy companies are always working to make breakthroughs in this area, even in the face of massive setbacks caused by government regulations and subsidies in the energy industry. At this point, although extremely far from being the perfect energy source, solar panels seem like the most cost and energy efficient method of providing decentralized electricity to homes. Installation for a home solar power system can cost as little as $10 thousand. As energy prices rise, the power provided by the sun through these systems will start paying for themselves on a shorter and shorter time line. If enough people began using some type of decentralized source of electricity and water, the power of governments to use our basic biological needs to force subservience upon us would be eliminated entirely. And as alternative energy technology progresses, electricity will undoubtedly become cheaper and even further removed from government control.

Decentralized food supplies will come as a result of the success of self sustaining energy and decentralized currency. As those two technologies become more widely used, governments will have less power and money and will no longer be able to exert the amount of control over the market as they currently do. Consequently, they will simply be unable to enforce restrictions on all areas of the economy, including agriculture. Then, farmers will be able to mass produce whatever foods are most needed at a competitive market price, making food cheaper and more abundant all across the world.

Of course, this vision of a totally decentralized society looks far into the future—though hopefully not as distant as it may seem. Only time will tell whether or not these peer-to-peer systems will overhaul the way society is currently operated.


  1. Wow, did I just read a chapter of Aldous Huxley’s Brave New World Reinterpreted?
    I too am excited about the freedoms, both present and future, decentralization offers. This new technology is exciting. Let’s be a little more realistic though. For one thing, P2P is riddled with malware. With Tor we don’t know how many nodes the government is operating but I’d guess it is increasing. That means we may not be as anonymous as we like to believe. And cryptocurrency rendering banks obsolete? How so when the entire developed world has no online access? Oh yea, and we have to convert digital currency to / from fiat.
    Solar power as the most cost effective energy ? You are obviously not a physicist or engineer. Unless you are living outside the Earths atmosphere, solar is at best a supplemental energy source.
    I will iterate that I despise the War On Drugs, the Patriot Act and the government generally robbing us of personal freedom. Use a little perspective though. What are you going to do if your area becomes a contagion zone? Perhaps it will be struck by earth quake, tsunami, hurricane, meteor or volcanic ash. Will you await rescue from the National Guard or will you solve the little dilemma in a decentralized manner ?

  2. I just could not hold myself from commenting.
    Those talks about “undermining government” is extremely naive if not immature.
    Obviously theoretical reasoning will be futile here, so let’s go straight to example.
    When you step outside (I am presuming you do sometimes) and make the first step outside your lot – what’s under your foot? A road. Who built it, or rather – who ordered it and paid for it? What you call “government”. And yes, I hear you saying “i paid for it with my taxes”. Bingo! Do you want nice hard roads, rails, parks, schools?… Who and how do you imagine will pay for it if “government” will be “undermined”? Nope, can’t make it a business enterprise – all of that does not produce income (can’t make a tall booth at every house gate, can you?).
    Jees… just think, will you?

    • DeepDotWeb

      Not being the author myself, but i don’t think the intention of the author was to talk about “undermining government control” in general – but certain aspects of the services provided by government that costs us much more than they should or that can be provided in a more efficient way using crypto technology.

  3. Sorry, while it’s a nice idea in theory, the world will not function without governments, history has proven this and cryptocurrencies don’t bring anything to the table that changes this.

    The reason is because of monopolies of force. Any place that tries to live in an anarchistic fashion will quickly be invaded and taken over by a non-anarchistic society that can band together to effectively arm themselves and exert control over others.

    You can see this all over the world right now, the spread of ISIS and other militant groups in the middle east, the sepratists in Ukraine and the warlords in middle Africa, happens purely because of government power vacuums. Without a government to monopolize the use of force armed militias quickly form and take over, and in modern warfare the winning side is always the best armed.

    There are lots of exciting things happening right now that could lead to a world with LESS government, but you are still going to need a government to regulate the use of force and the justice system.

    On the same token, we have proven time and time again that a decentralized healthcare, education and welfare system do not function as effectively for society as their socialized alternatives.

    So to rehash my points, while anarchistic ideas are cool from a freedom perspective, they do not provide the best outcomes for society when it comes to:

    1. The use of force to prevent war.
    2. The justice system to detect and punish wrongdoers.
    3. Education for our kids.
    4. Healthcare for the sick.
    5. Welfare for the poor and unemployed.

    If you want to learn more about the economic principles behind what i’m saying do some research on the varying market efficiency between public and private goods. You can actually show mathematically how for any good that has a positive or negative externality the most efficent provision of that good DOES NOT occur under freemarket conditions.

  4. Concerning the roles of government:

    1. The use of force to prevent war.

    There is some truth to this point. If you don’t have a government a friendly neighbouring country will be more than happy to oblige. The only reason why they don’t invade, is simply because you already have a government.

    2. The justice system to detect and punish wrongdoers.

    Well, it is dangerous to create an entity that needs lots of wrongdoers to justify its own existence. I think that the proper role of government in the realm of justice is a debatable issue. To what extent do we have a government in order to bring justice and not to justify injustices?

    3. Education for our kids.
    4. Healthcare for the sick.

    Governments dealing with education and healthcare are a costly, inefficient and very unfree proposition. There have been lots of governments in the past that did not see a role for themselves in education or in healthcare. There are still quite a few governments around that don’t.

    5. Welfare for the poor and unemployed.

    This is the biggest danger. Governments involved in welfare will invariably try to dismantle alternative solutions to welfare and redistribution of income, such as the extended or even core family. By ripping apart the social structure of society, in order to substitute it by politically-motivated forms of organization, governments are very much self-defeating. At some point, such artificial system can only collapse. From there on, who will take care of the sick, the poor and the unemployed? Who will provide education to the children? All that it takes for this to happen is the government to go bankrupt. Having a large demographics within the population dependent on government handouts, increases the pressure on the treasure, while it dismantles the social structure. It cannot last forever…

  5. Um, yeah, I live in apartment so I can’t do any of that… So I’m screwed.

  6. ” I think that the proper role of government in the realm of justice is a debatable issue. To what extent do we have a government in order to bring justice and not to justify injustices? ”

    Are you joking ? The very thing that created government was someones brand of justice. Look at the meaning of the word: to govern.
    Initially it was religion alone that created the state system we live in. The masses had to be controlled in some manner. Fear of divine retribution worked ( and still does unfortunately). So by definition governments control justice.

    Of course they abuse that power for personal gain as they always have. Thats what needs to change.

    It would be nice to see an experiment in true democracy considering it doesn’t exist. All candidates must strictly be alloted an = finance platform. No private interest contributions whatsoever.

    Likewise, an experiment in true Marxist Communism would be interesting to see.

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