THE CITADEL: A Manifestation of Bitcoin Utopianism

The Bitcoin cult, an emerging religion is one that I have covered extensively in a variety of podcast episodes and blog articles the links to which can be found here. It is a most interesting development in the history of Bitcoin and as what I would consider a predictable outgrowth of The Bitcoin organism as described by German Bitcoiner Gigi in my episode with him. Religions are thought by many evolutionary psychologists and historians as a natural evolutionary step of a culture or society wishing to bind together its citizens and cement cultural norms viewed as positive. Bitcoin while being a technology, is much more than that and is revealing itself in multiple ways and adaptations as the organism searches for the most efficient path to survival and solidify gains of supporters who are required to both keep it alive and thrive.

What Is the “Citadel”

The “Citadel” concept is one of these effects of the Bitcoin religions attempts to solidify gains and gather more adherents. In short it’s a belief in a future where society is stratified between early and late adopters of Bitcoin as the global reserve currency, giving those who got in early and accumulated large quantities of Bitcoin or later stage adopters with available capital who also were able to transfer wealth from fiat currencies into Bitcoin (albeit at much higher prices). This stratification would lead to resentment against early adopters who would hold vast quantities of wealth in the now highly valued world currency. The resentment would present a clear and present danger to those adopters and require them to seek refuge from the threat of uprising or mere extortion and theft. While individual estates would provide them a with a measure of security, the best way to keep the barbarians at the gates so to speak would be to pool resources for security and form intentional communities, colloquially called ‘Citadels”, to provide adequate security for Bitcoiner’s, their families and their accumulated wealth.

These citadels have no clear layout or location ranging from walled castle-like communities for floating space stations above the earth. What is interesting is their philosophical correlation with 19th century American & European intentional utopian communities as well as the science fiction series “The Culture” written by Ian Banks between 1987 & 2012.

19th Century Utopian communities

From 1790–1840 in Western Protestant Christianity a phenomenon called “The Second Great Awakening” occurred which resulted in radical offshoots of existing Christian denominations that believed tenets of faith should dictate the community’s life and setting.

Amana Colonies

The Amana Colonies in Iowa were established in 1856 (West Seneca, NY being the first attempt) that created a Christian communal life that was practiced for 76 years. The community was completely self-sufficient and remained so until the shift to a for-profit corporation in the great depression which created the Amana Society, Inc., the best-known brand being its refrigeration line which created the first commercial upright freezer. The community survives to this day still heavily agricultural but relying on corporate profits and tourism for sustainability. The community is based on the Pietism movement within Lutheranism which calls for communal living that emphasizes and reinforces through social pressure the need to live a fully Christian life, sanctification through a focus on lifestyle adherence.

Owenism

Robert Owen was a businessman and a founder of utopian socialism & cooperative movements. His embracement of Socialism and Christianity led to his experimentation with intentional utopian communities in America and Britain, the most famous was “New Harmony” in Indiana. The belief was, as with other Christian intentional communities, that a lack of personal property would lead to a destruction of greed as members focused on the good of the community & their individual sanctification, leaning heavily on the same pietist religious beliefs that the Amana Colony did.

A grand town was envisioned that would be walled in, a center for gathering of commercial goods produced, religious instruction, education, etc. Although New Harmony attracted over 1000 residents and lasted two years it was an economic failure. Josiah Warren a resident described the community as doomed to failure given that the united interest of the group was at perpetual war with the individuality of its adherents; a lack of individual sovereignty in short, was to blame.

Bruderhof

The Bruderhof communities is another Christian utopian movement of intentional community that started in 1920 and continues to this day. They practice a community of goods, communal ownership, of the goods as described in the first Christian communities in Acts 2 & Acts 4. The group considers themselves distinct in denomination although others have called them Anabaptist which is a faith history that the Amish, Mennonite & Hutterites follow from. The community started in Germany but most left with the rise of the Nazi party for fear of property confiscation and conscription (they were conscientious objectors). From Germany communities were created in England, Paraguay, The United States, and Australia, with all but the communities in England surviving to this day.

The community as already mentioned holds all property and goods produced in common, with all members working inside the community and any monetary benefits used for all. Members dress plainly and like their other anabaptist brethren, eschew most or all technology inside the community seeing anything that may interfere with personal sanctification as to be avoided.

The Culture

The “Culture” series of books by Ian Banks, a Scottish author, is a utopian post-scarcity space society that consists of humanoids, aliens and advanced AI who live in a libertarian socialist society spread across the galaxy. The Culture is created by humanoids & AI 9000 years prior to the events in the first novel which put it at 7669 B.C. The members of the culture live on spaceships and other non-planetary structures as the founder’s wish to avoid centralized political power structures that continued to occur within planet-based economies. The series focuses on much of the wars and political intrigue that occur between the culture and other advanced societies as well as how to interact with lesser civilizations, but there is a sub-theme of individuals living in a post-scarcity society and how they live where priority is not on acquisition of property as everything is available but how to find meaning without that as a central pursuit.

Correlations with the Citadel meme

Providing a brief background of historical and fictional examples is necessary as it shows these impulses and justifications are deeply rooted in the human experience, especially religious ones. The citadel comes from a distrust of others, digital xenophobia. You cannot trust those who didn’t share Bitcoin’s spiritual experience early on as they did since those who came later did so when the proof was provided not when faith was required. Those who hold large amounts of bitcoin are also inherently invested in the continuation of what would then be the status quo, by being a Bitcoiner you are incentivized to ensure its survival and thus the survival of every Bitcoiner’s wealth and status in society.

The modern western state also uses these same incentive structures to ensure segments of society have vested interests in the continuation of its survival. Early in American history a system of “internal improvements” was pushed by the Whig party which offered corruption laden schemes paid to wealthy individuals to build roads, bridges, and canals. It was widely known in the party and part of the plan itself for these individuals to overcharge the government as they would then become reliant on government contracts as well as create leverage for blackmailing opportunities based on said corruption. Modern western states use entitlements such as welfare assistance to bind those in poverty with incentives to maintain the status quo of power distribution, as they become just as reliant on the benevolence of the state as the rich were for their survival.

An interesting piece to this is rooted in the block size debate that split the community in the fall of 2017 when Bitcoin Cash was created. If you want a little more history to this, I have conducted interviews explaining the split which you can listen to here (XXXX link) so I won’t go deep into this in this article. In short, those who thought that the tradeoffs for increased block size to facilitate cheap transactions on the main Bitcoin chain went to Bitcoin Cash (BCH) and those who thought the tradeoffs were dangerous and valued on-chain Bitcoin as a Store of Value (i.e. digital gold) remained in Bitcoin (BTC).

Citadel Bitcoiner’s are exclusively in the Bitcoin (BTC) chain and as in the example above see the binding of high net worth and politically connected individuals with increasing wealth via holding Bitcoin are able to protect themselves from rabble-rousing in that camp. I do not, however, see a similar well-articulated plan for those in lower SES (Socio-Economic Status) as the state does through welfare.

Currently, the concept of the second layer (Lightning Network, et al) is their answer to using Bitcoin for daily use, which I agree with, is not assured of success. Even the most zealous defenders of the second layer agree that Lightning has obstacles to overcome and is not as desirable as the Bitcoin network in terms of Security, etc. In a scenario where its success is as hoped Citadel Bitcoiner’s offer no explanation for average people being bound to it as intrinsically as high net worth individuals would be in Bitcoin. Only that they would have the great gift of having their net worth, much smaller mind you, having qualities that fiat systems cannot deliver and in fact leech off of them. I don’t disagree with this statement but I don’t believe they will have any ethical or philosophical buy-in and definitely not to the same degree that we do. If they would be willing to put aside their preference for status quo security and understand the mechanics of Bitcoin and economics better already, we would already live in a world of Bitcoin. The fact that we do not tell me that even in a Bitcoin world they won’t necessarily appreciate or love Bitcoin as we do.

This represents to me an attack vector in Bitcoin and the Citadel meme, one where even high amounts of wealth, security and high walls can’t stop. When the masses are jealous and angry they are ripe for persuasion from those who seek to twist their sense of “right and wrong’ into a concept of “fairness” and that those who have more obviously acquired it by unjust means; this gives the violent taking of said wealth at best “fair” and at worst a moral requirement.

It very well may be that in a Citadel Bitcoiner world the masses are content with sound money and while lustful for the life those with more have (as it always is), I highly doubt that would be the case. In my personal opinion, the Citadel meme is a shit one, one that is rife with elitist overtones and doesn’t play well outside of a small group that feels entitled to reap the benefits, to live a pleasurable life due to either foresight or luck. I agree that they should be able to if this scenario plays out, they took the risks whether financial, reputational or in lifestyle comfort for a period of their life, but this rolls into the concept of what is “fair” in life and while those who create value SHOULD be free to enjoy the wealth it creates, we cannot ignore repercussions in the real world & how people react to them. There is a reason major corporations will donate to both candidates when it is clear ONE or BOTH of them seemingly represent interest and policies directly opposed to their own.

I do not have the answers to how Bitcoiner’s and the Citadel meme can deal with this attack vector, however, if their scenario comes to fruition and a deeply meditative and articulating thought process has not occurred, the existence of not only the citadel but Bitcoin is in jeopardy. For if history is to be any judge, humanity is more than willing to destroy a great good with a justification of eliminating a minor, albeit only perceived, wrong.

(Article originally appeared on my medium page)