Financial freedom and neo-feudalism

Original title: "Financial Freedom & Neofeudalism"

Author:Tulip King

Compiled by: Block unicorn

Preface

Content coins are scams, and this is also something you ask for. Decentralized finance (DeFi) is not better than traditional finance (TradFi), it’s just different. Feudalism will replace the modern state.

Cryptocurrency is regulatory arbitrage

Let's be honest: if the government did not bear huge debts and bankruptcy, if the Fed did not make the upper class rich by printing money, if the government did not rescue companies on the verge of bankruptcy, or if the government was concerned with reducing inflation and raising wages, there would be no need for cryptocurrency. Bitcoin is not derived from some kind of sacred mathematical inspiration. Bitcoin originates from disgust. Satoshi Nakamoto’s message in the Genesis block is not obscure: “The Chancellor of the Exchequer is about to deliver a second bailout for the bank.” This is not a random headline – it is a deliberate provocation to a system that refuses to let creatively disrupt nature operations after 2008.

Bitcoin Genesis Block and Newspaper Headlines

There was a turning point where the government could have chosen to let the economy run on its own. They could have chosen to let banks go bankrupt, businesses go bankrupt, and embrace creative destruction. It will be painful, but we will be better in the long run. Unfortunately, the baby boomers have no ability to sacrifice themselves at all and are determined to kick the problem into the future until they all die, which is no longer their problem (to be fair, I might do the same).

The crypto ecosystem has not invented new finance; it has invented a new platform. By transferring familiar services—payment, lending, market making—to the nominal “license-free” code, the project takes advantage of the gap left by the over-regulated framework after 2008.

Take a look at DeFi: It mainly recreates traditional financial services without compliance costs. Lending? Compound or Aave is an example. Options and derivatives? Just look at dYdX or Synthetix. Exchange? Uniswap is just a market maker with a better user experience and no KYC required. Innovation is not about services, but about providing these services without permission.

Unless mainstream regulation becomes more adaptable, this cat-and-mouse game of innovation through arbitrage will continue. We have not completely changed finance. We just moved it to a jurisdiction where there are fewer police officers.

Not better, just different

You need to see economics, politics, and technology as dynamic and responsive systems. They are actually the same thing—the coordination mechanism of human beings that continue to evolve to address any imminent existential threat. Human society is constantly rewriting its "rules of the game" to solve the most pressing problems at the moment, so it is meaningless to rank any system with a single standard.

History Classroom:

Feudalism: It emerged when the Roman Empire fell, when Europe lacked a standing army or a reliable path. By mortgageing the land to the army, the lords were able to quickly establish a small-scale defense system to resist attacks by the Vikings and Magyars, and provide farmers with protection that the distant royal power could not provide. This is not "primitive" - ​​it is a rational response to division and insecurity.

Absolute Monarchy: Rising in the 17th century, it aims to finance the huge costs of standing artillery and musketeers. By centralizing taxation and judicial power, the "financial-military state" can quickly mobilize income and manpower, enough to survive the war of a great power. The kings are not "evil" - they are the solutions to the increasingly expensive problem of war funding.

Mass Democracy: Developed to govern the industrial society. Industrialization concentrated educated workers in cities and expanded wealth. Widespread suffrage allows taxation, conscription and public education to continue politically under these new social pressures. Democracy is not "progress", but an adaptation.

The evolution of the political system and its core issues

As threats, technology and social norms continue to change, the "correct" political order is also changing. A system that protected farmland in 1000 or funded the military in 1700 could never manage railways and factories in 1900. Judge these systems outside the context in which they were born is like asking whether a plow or a microchip is a "better" tool - it all depends on the work at hand. This means that cryptocurrencies are no better than our current financial system, it is just different and hopefully more suitable for the era we are in.

I can almost say that I am a cryptocurrency fanatic. I think cryptocurrencies are more suitable for the current economic/political/technical environment than any other solution. We will eventually win. But it is unrealistic to assume that cryptocurrencies don't create as many problems as it solves. You can or should expect that these problems will continue to intensify over the next few hundred years until they completely change the world again.

Unexpected consequences

It turns out that when you give people a capital market that doesn’t require permission, the first thing they do is cheat on each other. This is both funny and sad. The real consequences of cryptocurrencies have emerged, not all of them are beautiful:

Theft and Hackers: In 2022 alone, North Korea’s Lazarus Group stole about $1.7 billion in cryptocurrency. Think about it, a rogue state with nuclear weapons funding its weapons programs by hacking your DeFi protocol. In traditional finance, there is at least a mechanism for freezing accounts and recovering stolen funds. In cryptocurrency? Haha, the money is gone. "Code is law" sounds great until someone discovers a vulnerability in your code and instantly clears your life savings.

Loss of funds: Self-custody means being your own bank, which sounds empowering until you realize that most people are simply not good at being a bank. About 20% of Bitcoins are permanently lost because people lose their private keys, forget their passwords, or send them to the wrong address. No customer service, no refunds, no FDIC insurance. There are only permanent and irreversible losses. Your funds are not "safe" - they are only one step away from disappearing due to a hardware failure or a short circuit in your brain.

Hyperfinancialization: We are quickly adding price data to everything. People are tokenizing themselves – literally minting personal tokens pegged to their reputation or output. Soon, your Twitter followers, personal brands, and even your relationships may have a pair and order book. Think about it, how would you feel when your value as a person is publicly priced for speculation? What if you cause your personal "stock" to plummet by 40% due to a bad view? What about when your value as a person becomes volatile like a meme coin?

These are not vulnerabilities, but features. Getting you out of the licensing-free nature of government control, and also letting scammers escape punishment. It allows you to get rid of the self-custody characteristics of the bank and also puts you in unbearable security responsibilities. The tokenization characteristics of creating new financing models also commoditize human existence.

The edges of freedom are sharp. Many people who shout liberation once they have gained freedom but do not know what to do.

Neo-feudalism

You need to think about what it means if Bitcoin (and cryptocurrencies) succeed. This means we will completely move the currency and markets out of the country's regulatory scope. Literally the separation of currency and state. This will reshape society at a scale comparable to the separation of the church and the state. Modern countries rely so much on controlling currency, and once they lose this control, the country is destined to collapse completely.

Without control over currency, the state loses its main leverage of power:

• They cannot effectively enforce taxes

• They have no control over monetary policy

• They cannot impose financial sanctions

• They cannot fund social projects or the military

What fills this power vacuum? I imagine that modern states will be replaced by something more similar to feudalism. We call it neo-feudalism. The neo-feudal society will exist in the form of asylum, and the cryptocurrency giants will sit at the top of small personal empires (I'm not kidding).

Study the shelter system in feudal society

This is not a radical theory - it has taken shape. See how mainstream protocols work. The largest token holders have a disproportionate influence on governance. Big players can decide the fate of proposals in one hand. The founder is revered almost religiously. Discord servers have strict hierarchy from "OG" to newbies.

Combined with Balaji Srinivasan’s concept of “cyber nation” – essentially a cloud community with its own currency, governance, and perhaps even physical territory. These are not "countries" in the traditional sense. They are digital territories with charismatic leaders, loyal followers, and wealth and power sources that operate outside traditional jurisdictions.

When currency exists under neutral agreements rather than state control, power will be concentrated in the hands of those who control capital, not in the hands of elected officials. Crypto billionaires will become the new feudal lord, providing protection, opportunities and resources to those who join their network. They will not call themselves “Lords”—they will be founders, thought leaders or protocol governors. But this dynamic would seem familiar to medieval historians.

Do you think I'm exaggerating? We have seen cryptocurrency giants save the entire protocol, create personal risk funds that are bigger than some countries’ GDP, and accumulate followers who follow them. The fragments of neo-feudalism are taking shape: wealth concentration, networks of personal loyalty, security and governance of privatization, and increasingly weakened state power.

This system may be more elite and liquid than old-style feudalism. You can "swear allegiance" to different online countries with just a few clicks, without being born a serf. But its fundamental power dynamics—strong capital holders provide security and opportunities for loyal cyber actors—will be surprisingly medieval.

Summary of suggestions

My advice is consistent. In a world dominated by cryptocurrencies and empowered by the super-large states today – you need to be an outstanding individual. You need to work hard to accumulate wealth and build your own small empire.

Specifically:

Maximize your skills and reputation. In the neo-feudal world, your value comes from what you can do, not your certificate or position title. Focus on being the top expert in a field that people need. Even in the feudal era, skilled craftsmen, engineers and strategists could always find protection. Build a traceable public reputation so that it can follow you across different networks.

Accumulate hard assets in different systems. Don't be completely immersed in the old or new world. Hold Bitcoin to prevent a country’s collapse, but also own gold, productive land and income-generating investments. Cross-system hedging is the safest strategy when the world is reorganized.

Actively build your network. Start cultivating your own "micro empire". This can be a Discord community, a DAO, or just a strong network of great allies. In neo-feudalism, your security comes from your network. The lone wolf will be swallowed up, and a powerful network will flourish.

Develop self-sovereign skills. Learn operational safety, self-hosting best practices and independent life skills. Protection from large institutions may not exist forever. Those who can manage their own security (digital and physical) will have a huge advantage.

Positioned near power. If you can't become a lord, be a trusted consultant or deputy. In any political system, those who are close to power benefit the most. Find promising protocols, communities or network countries and become an integral part of them as early as possible.

The fundamental fact is that the skills required to prepare for neo-feudalism are the same as those required to succeed in the cryptocurrency field now: self-reliance, technical capabilities, network building and capital accumulation.

Whether we end up in a truly new feudal pattern or simply fall into a more fragmented world composed of competing systems, those who have an early insight into this transformation and positioned accordingly accordingly will thrive. Those who stick to the old assumptions of wealth and power will struggle.

Cryptocurrencies promise to break free from state shackles and achieve freedom. It might really do that – with all the responsibility, dangers and power dynamics that come with true freedom. Please be careful of your wishes.