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The existence of Bitcoin hinges on the utmost security of its blockchain; however, developer negligence could undermine the value of the first cryptocurrency, potentially necessitating its protection through force, similar to fiat currencies. This perspective was shared by cryptographer and smart contract pioneer Nick Szabo.
Szabo explained that the Bitcoin market ecosystem thrives solely because the underlying technology is perceived as secure. If security is compromised due to hacks, coding errors, or manipulations, trust in the asset will vanish, leading to the collapse of the cryptocurrency market.
He recalled how, in the past, the reliability of money was ensured through the threat of physical force.
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“During the gold standard era, gold was transported worldwide on armed military ships,” he elaborated on his point.
In the expert’s view, the digital age offers a peaceful alternative, yet this security model is fragile and entirely reliant on the integrity of the underlying code. Szabo places the responsibility for this model on blockchain developers, who must prevent any partial transfer of network control to third parties. He believes that any alterations to the protocol could disrupt the established balance.
Szabo’s reflections were a response to a tweet from last year by TikTok historian Roman Helmet Guy regarding the artificiality of the meritocracy concept—a system where an individual’s position is determined by their merits and abilities. According to the blogger, this system exists solely due to institutions and norms upheld by force—such as the military, police, and national security systems.
Without protective mechanisms, formal merits (such as ratings, diplomas, and performance metrics) lose their significance—leading to a scenario where “natural meritocracy of extreme violence” prevails, dominated by the stronger and more aggressive, stated Roman Helmet Guy. Szabo believes that the TikToker’s arguments are applicable to Bitcoin.
Bitcoin is already being utilized as a currency, rather than merely a store of value, but this is currently limited to developing nations due to the weakness of local fiat currencies, lamented the cryptographer.
Previously, Szabo asserted that Bitcoin’s fundamental value as a medium of exchange and a store of value is rooted in its ability to protect individuals from double spending and censorship, rather than solely in the asset’s price.
