16 Chapter 1: Introduction “We cannot abolish war by outlawing it. We cannot end it by disarming the strong. War can be stopped, not by making the strong weak but by making every nation, weak or strong, able to defend itself. If no country can be attacked successfully, there can be no purpose in war.” Nikola Tesla [7] 1.1 Inspiration Einstein theorized that mass is swappable with energy. Assuming he’s right, this would imply that nations could one day learn how to swap some of their mass-based (i.e. kinetic) defense systems with energy-based (i.e. non-kinetic) defense systems for applications related to physical security and national defense. Modern militaries already utilize both cyber and electronic defense systems, but perhaps there is some other type of defense technology that could combine electric and cyber defense systems together into an electro-cyber form of defense technology. If true, then perhaps one day society will learn how to utilize this special type of technology as a “soft” form of warfare to resolve international policy disputes, establish dominance hierarchies, defend property, rebalance power structures, or even mitigate threats associated with “hard” warfighting, such as nuclear escalation. Electro-cyber warfighting is not a new idea; it’s at least 123 years old. In 1900, Nikola Tesla hypothesized that society would eventually develop such destructive kinetic power that humanity would face a dilemma and be compelled out of existential necessity to fight their wars using human-out-of-the-loop “energy delivery” competitions. He believed humans would eventually invent intelligent machines that would engage in electric power competitions to settle humanity’s disputes, while humans observe from afar. [8] Other titans of the American industrial revolution had complementary ideas about using electricity to mitigate the threat of war. In 1921, Henry Ford (while reportedly standing with Tesla’s rival, Thomas Edison) claimed society could eliminate one of the root causes of warfighting by learning how to create an electric form of currency that bankers couldn’t control. [9] Both Tesla and Ford saw potential in the idea of using electricity to either eliminate a root cause of warfare or eliminate a root cause of warfare’s associated destruction and losses. However, neither were successful at building the technology required to test or validate their hypotheses. This could have been because both theories predated the invention of “intelligent machines” a.k.a. general-purpose, stored-program computers. Both Tesla and Ford’s theories predate the popular theoretical framework we call “computer science” and the development of the abstraction we call “software.” This thesis was inspired by the following question: what if Tesla and Ford were both right, and they were both describing the same technology? What if Ford’s theory is valid, and it is indeed feasible to mitigate a root cause of warfare by converting electricity into monetary and financial information? What if Tesla’s theory is valid, and the future of warfare does indeed involve intelligent machines competing against each other in human-out-of-the-loop energy competitions? Would this technology not reduce casualties associated with traditional kinetic warfighting? If it did, would this technology not be worth every watt? Assuming Tesla’s theories were valid, then what might “soft” warfighting technology look like? How might this technology impact or re-shape agrarian society’s social hierarchies and power structures after spending well over 10,000 years predominantly fighting “hard” or kinetic wars? If Tesla’s “intelligent machines” are in fact computers, then wouldn’t their power competition be dictated by a computer

17 program? Maybe humanity’s “soft” and futuristic form of electro-cyber warfare would take the form of an open source “softwar” computer protocol. And because nothing like it has ever been seen before, maybe nobody would recognize it. This concept is illustrated in Figure 2. Figure 2: Tesla & Ford's Theories Could Manifest as an Open-Source Computer Protocol A ”softwar” protocol could theoretically utilize society’s internationally-dispersed, global electric power grid and existing internet infrastructure to empower computers to impose severe, physically prohibitive costs on other computers in, from, and through cyberspace. It could combine Tesla’s and Ford’s ideas together and serve as both a “softwar” protocol and a monetary network. There’s no logical reason to believe it couldn’t serve both functions simultaneously, considering how the development and expansion of all technologies need financing – especially defense industrial complexes. Here's an even more compelling idea: Maybe “softwar” technology already exists and nations are already starting to adopt it. Maybe this new form of power projection technology is already demonstrating how it can empower every nation, weak or strong, to physically secure their interests like never before, thus fulfilling Tesla’s prediction. Perhaps this electro-cyber warfighting technology is hiding in plain sight, but people don’t recognize it yet because they are mistaking it for a peer-to-peer electronic cash system. Finally, perhaps all it will take for society to recognize that they’re entering a completely new and transformational paradigm of non-lethal warfighting is simply a different point of view. To that end, the author presents this thesis.

18 1.2 Justification “Airplanes are interesting toys, but of no military value.” General Ferdinand Foch, Supreme Allied Commander of WW1 [10] 1.2.1 If a Softwar Protocol were Invented, is it Safe to Assume we would Recognize its Military Value? Having suffered through two world wars and fallen into the brink of strategic nuclear annihilation within the past century, it’s easy to look skeptically back at Tesla and Ford’s theories and think pessimistically about them. But maybe they were truly onto something. Their design concept could have been right, but the computer science needed to implement their ideas simply wasn’t developed yet. If that’s true, then it would be worthwhile to revisit these design concepts and investigate them further now that society is a century older and technologically mature (especially with respect to computer technology). The justification for this research can be explained with a thought experiment. For the sake of argument, let’s assume that (1) “soft” warfighting is possible, and that (2) soft wars would be fought using some kind of “softwar” protocol. Is it reasonable to believe that society would recognize the strategic importance or functionality of this technology when it was first discovered? The author asserts there is no reason to believe that a non-kinetic, immaterial, or disembodied form of “soft” warfighting technology would look anything remotely like ordinary warfighting technology. It seems possible – perhaps likely – that this technology would not be recognizable as warfighting technology because it would look and behave nothing like the technologies we normally associated with warfighting. It’s hard to feel confident that society would be able to recognize the functionality of this type of technology if it emerged, considering how many times in recorded history that previous empires failed to recognize strategically vital warfighting functionality technologies when they first emerged – technologies which seem obvious in hindsight. In the 9th century, the Chinese alchemists who invented black powder thought it was medicine. It took them centuries to realize that black powder had substantial potential as a new type of warfighting technology for a new type of warfare. For some reason, people during this time weren’t inclined to investigate the national strategic security applications of charcoal, sulfur, and saltpeter mixtures. Why? Perhaps it was because no one had ever thought to use black, powdery mixtures to project physical power and impose severe physical costs on adversaries. That changed in the 13th century when iron foundry engineers started inventing complementary technologies to utilize black powder for its capacity to produce lots of power and impose severe physical costs on adversaries. [11] In the 1450’s, Emperor Constantine XI refused to support the adoption of cannons after Orban the iron foundry engineer invented them and offered to build them to defend Constantinople against the neighboring Ottoman Empire. Emperor Constantine was killed a year later during the cannon siege of Constantinople (at the time, cannons were called “explosion engines”). In the 1520’s, China burnt down their asymmetrically dominant naval fleet shortly before the discovery of the Americas and the emergence of European naval dominance throughout the age of sail – a mistake which has taken more than six centuries to correct. In the 1860’s, the British Royal Navy passionately denounced and refused to adopt self-propelled torpedoes when English engineer Robert Whitehead invented them. [12, 13] In the 1920’s, US Army General Billy Mitchell was demoted and court-martialed for insubordination after lambasting US Army, Navy, and Congressional leaders for their incompetence. General Mitchell accused

19 his superiors of “near-treasonous” incompetent because they refused to accept the validity of emerging theories that airplanes would become equally as strategically vital as battleships and other major military programs at the time. He died 9 years before these theories were conclusively validated by the Japanese attack of Pearl Harbor. He was posthumously restored the rank of general and awarded a Congressional gold medal a year after the conclusion of World War Two. Today, General Mitchell is celebrated as a maverick and widely recognized as the founding father of the US Air Force. [14] There is no shortage of other examples to demonstrate society’s notorious inability to recognize the vital strategic importance of emerging power projection technologies after they’re first discovered. Incidentally, there’s also no shortage of examples to illustrate how emerging power projection technologies make or break empires. Yet somehow, despite how existentially important it is for empires to recognize and master emerging power projection technologies, their leaders keep forgetting this basic lesson of history and allowing their empires to crumble. 5,000 years of written testimony indicate that failing to recognize the strategic importance of emerging warfighting technologies is the rule, not the exception. Time and time again, empires rise and fall because they keep allowing themselves to be surprised by the emergence of game-changing power projection technologies. Even more absurdly, the people in charge of these empires keep acting like they have an option to refuse or ignore new warfighting technologies after they emerge – as if the cat can be put back in the box, as if they live in an isolated bubble completely separated from the rest of the world, as if their empire is the only empire which gets to decide how they’re going to use this technology. Why do rulers keep allowing their empires to be disrupted by new power projection technologies? Why do empires keep forfeiting important technological leads over to their adversaries? There are several explanations. One simple explanation is that society keeps repeatedly making the same mistake of believing that the next war will look like the last war. To be more specific, people keep making the same mistake of expecting next century’s strategically vital warfighting technologies to look like last century’s strategically vital warfighting technologies. Faulty assumptions, expectations, and mental models can account for this blind spot. People aren’t checking their assumptions, so they aren’t aware of how presumptuous they’re being. It’s clearly difficult for empires to recognize strategically vital applications of new technologies, even when that technology is placed right in front of their faces. Empires often don’t adopt vital new technology even after it’s adopted by competing empires. Empires don’t take new technologies seriously even when their own military officers literally scream at them to take it seriously before the next major disruption of the existing power dominance hierarchy begins. Instead, they discredit them or discharge them. One would think that the rules of these empires would learn from the mistakes of their predecessors, but history shows they keep making the same mistakes. With this history lesson fresh in our minds, let’s ask ourselves these questions: is it reasonable to believe that society would recognize a “softwar” protocol if it were invented? Moreover, what would be the potential risks, rewards, and national strategic security implications of a “softwar” protocol were invented, but one empire doesn’t adopt it while neighboring empires do? These questions highlight the justification for this thesis. It is of vital national strategic importance to keep an ear to the ground and an eye out for emerging power projection technologies, because failing to recognize them, take them seriously, and adopt them could have dire consequences. Like everything in nature, empires rise and fall based on their ability to adapt to new power projection tactics, techniques, and technologies. Incidentally, this is the author’s job as a US Space Force officer and US National Defense Fellow at MIT. The author’s job is to keep an ear to the ground and an eye out for emerging power projection technologies.

20 1.2.2 Even if Society Recognized Softwar, is it Safe to Assume they would Adopt it Before it’s Too Late? “[The Manhattan Project] is the biggest fool thing we have ever done. The bomb will never go off, and I speak as an expert in explosives.” Admiral William Leahy, chief military advisor to President Truman, 1945 [15] Expanding upon this thought experiment even further, let’s assume that (1) “soft” warfighting is possible, that (2) future wars could be partially fought using some kind of “softwar” protocol, and (3) US National Defense Fellows at MIT have successfully identified a key-enabling technology for this type of warfighting and are actively working to raise awareness about it – to the point of dedicating more than a year of research to developing a theory about “softwar” to inform the public. Is it reasonable to believe that society would accept it and adopt it soon enough? Perhaps some people would, but how long would it take for enough people to reach consensus that this technology has vital national strategic significance and should be adopted and mastered – even stockpiled – as soon as possible? Would society reach consensus before their adversaries reached consensus? Would they adopt and master this new, strategically vital power projection technology before their adversaries adopted and mastered it? As has always been the case with the emergence of new, strategically vital power projection technologies, timing is everything. This thought experiment highlights a national strategic security dilemma. If a new technology does have vital national strategic security implications, this would imply that barriers slowing society down from reaching consensus about the strategic importance of that technology would represent a national strategic security hazard. Like all examples of game-changing power projection technologies to emerge in the past, success depends upon speed of adoption. Thus, anything that degrades speed of adoption would also degrade security. It’s not sufficient for society to eventually recognize the vital strategic importance of vital new power projection technology – they must come to consensus about it, adopt it, and master it before their adversaries do. They must not wait around and let their competitors teach them how strategically important this new technology is. As one of many famous examples, the people of Constantinople had less than a year to reach consensus that cannons were of vital strategic importance which must be adopted despite their cost. This was apparently not enough time, so the people of Constantinople allowed Sultan Mehmed II to teach them how important this new technology was the hard way: by example. During the early 1900s, the US government had a few decades to reach consensus that airplanes, nuclear energy, and rocketry would have game-changing security applications, and it worked out well for them – but not without some hiccups along the way. As those precious few decades ticked along, there were many barriers (e.g. court-marshalling General Mitchell, or bad advice from people like Admiral Leahy) which slowed down public consensus. In the 1930s, Albert Einstein concluded that nuclear energy likely wouldn’t be obtainable in his lifetime. A few years later, Einstein pleaded with the US government to take the national strategic security implications of atomic energy more seriously. By 1939, the situation had become so severe that Einstein – a world-famous pacifist – urged US President Franklin Roosevelt to race to develop atomic warheads before Germany. Many forget that Einstein’s famous letter to Roosevelt doubled as a “mea culpa” letter after he famously discredited the potential for nuclear energy and famously advocated against war. [16]

21 The barriers which slowed the American public from reaching consensus about the strategic implications of these emerging technologies had the potential to seriously jeopardize US national strategic security. Consider how many people would not have been killed, or how much time, effort, and resources would not have been wasted, if military leaders and civil policy makers had accepted Billy Mitchell’s ideas sooner and postured the US to be a leader in aerial warfighting in the mid-1930s? Consider what would have happened if Germany – the first to develop jet aircraft and ballistic missiles, had also developed atomic warheads first, months before the US did? The point is, the US dodged several strategic bullets throughout the 20th century. Is it reasonable to assume the US will keep successfully dodging bullets when the next strategically vital power projection technologies emerge throughout the 21st century? Of course not. 1.2.3 Four National Strategic Security Hazards “Protect your heads with shields in combat and battle. Keep your right hand, armed with the sword, extended in front of you at all times. Your helmets, breastplates and suits of armor are fully sufficient together with your other weapons and will prove very effective in battle. Our enemies have none and use no such weapons. You are protected inside these walls…” Purported Final Speech of Emperor Constantine XI during the 1453 cannon siege of Constantinople [12] These thought experiments are designed to beg a question: what barriers slow the adoption of emerging power projection technologies that have vital strategic security importance? The reason why this question is so important to beg is because every answer to it represents a national strategic security hazard. So what, specifically, are the barriers that slow adoption? The author proposes four answers: lack of general knowledge about the profession of warfighting, pacifism, analytical bias, and cognitive dissonance. One thing slowing society from adopting emerging power projection technologies is a general lack of knowledge about the profession of warfighting. Some people simply don’t have enough experience or understanding with the basics of physical security to make the connection and encourage rapid adoption. This makes sense considering how less than 2% of people actively participate in this profession. Warfare is a niche field of expertise that almost everyone in society outsources to people like the author. Another barrier is pacifism. Some people are perfectly capable of understanding the potential strategic implications of a new technology, but they have a hard time accepting it because of moral, ethical, or ideological objections. Pacifism slowed the development of both air forces and space forces and was especially prevalent amongst civil scientists during the first decade of nuclear warhead development. At one point, President Truman called Oppenheimer a “cry-baby scientist” and forbid him from visiting the White House because of how much Oppenheimer struggled to emotionally reconcile the development and use of nuclear warheads based on moral, ethical, and ideological objections. [17] Air flight, space flight, and nuclear energy were technological milestones that many in society wanted to preserve for strictly peaceful purposes. These people were perfectly aware of the fact that air flight, space flight, and nuclear energy technologies could be used for physical power projection and warfare, they just objected to it based on ideological reasons, and discredited the people who talked about using it for security purposes as being “war mongers.” Outspoken pacifists like Einstein famously overcame these objections and eventually encouraged the development of nuclear warheads, recognizing the simple fact that nobody has the option of outlawing their adversaries from utilizing these technologies against them. Whether it’s due to lack of knowledge about warfighting or pacifism, the core challenge associated with getting the public to quickly adopt strategically vital power projection technologies appears to be a

22 biproduct of self-domestication. Like any other kind of animal, humans are vulnerable to becoming too docile and domesticated. This can cause them to misunderstand the importance of emerging power projection technologies. This may sound impolite, but it’s a legitimate assertion backed by no shortage of scientific evidence and written testimony that will be discussed throughout this thesis. Docility and self-domestication are reoccurring security problems that are pertinent to subject matter concerning national strategic security and any emerging physical power projection tactic, technique, or technology. It’s possible for human populations to spend too much time separated from nature to understand their own nature. In their comfort, complacency, or perhaps even hubris, they forget how strategically important it is to remain at the top of the power projection curve, so of course they will struggle to understand how new power projection technology functions and why it is so important for them to adopt it as soon as possible. Some have argued that expecting a domestic society to see the functionality of emerging power projection technology (i.e. weapons technology) is like expecting a golden retriever to understand the functionality of a wolf collar. This concept is illustrated in Figure 3. In their domesticated state, golden retrievers don’t know what they are and where they come from, so naturally they aren’t going to understand what happens when they encounter the natural, undomesticated version of themselves. Retrievers don’t know that their aversion to physical conflict makes them extraordinarily vulnerable and a ripe target of opportunity for predators. So they aren’t going to understand how their wolf collar technology works and why it's so important for them to use it in the presence of wolves. Figure 3: A Domesticated Wolf Wearing a Wolf Collar

23 There are other scenarios where people slow adoption even when they have plenty of knowledge about warfighting and no ideological objections to it. These are usually people who are perfectly capable of understanding the potential strategic security implications of new technologies, but they nevertheless still forfeit technological leads to their adversaries. These scenarios illustrate a third and fourth barrier slowing society from adopting strategically vital new power projection technology. A third barrier preventing society from adopting strategically vital new power projection technology is analytical bias. Sometimes, people aren’t aware of how biased their analysis of a given technology is because they don’t recognize their assumption that the first intended use case of a given technology is the most important or even the most relevant use case. For example, when alchemists first started to theorize about the medicinal risks and benefits of black powder, they were inadvertently biased because they only analyzed the first intended use case. They weren’t aware of the assumptions they were making – namely the assumption that black powder was strictly a form of medicine that couldn’t be useful for several other applications. Why did alchemists make so many assumptions about black powder? Perhaps it was just because they intended to build medicine, so they named it medicine and only evaluated it as medicine. This created a barrier to national adoption of black powder that existed for as long as nobody thought to use a different theoretical framework to analyze black powder as something other than medicine. While this is somewhat of an oversimplification of the issue, it illustrates the point that this same phenomenon could also be a barrier slowing down US adoption of what could become critical proof-of-work cyber security technologies like Bitcoin. We need to recognize the assumption we’re making that the most important or even the most relevant use case of Bitcoin is its first popular use case (internet money). There is no shortage of examples of emerging technologies where it’s not reasonable to assume that the first intended use case will be the technology’s primary use case. A fourth barrier is cognitive dissonance. Sometimes, people can see the existentially important national strategic security implications of emerging technologies, but they struggle to accept and reconcile what they see because it contradicts their preconceptions. Faulty preconceptions can be caused by phenomena already discussed, like a lack warfighting expertise, ideological objections, or analytical bias, but they can also happen due to fear, shock, or even pride. In plain terms, change is scary, and it’s easier on the emotions to ignore or discredit the threat because we don’t like the way it feels to be threatened (especially if we’ve become too accustomed to being the top dog). Esteemed gunnery specialists of the British Royal Navy bitterly opposed adoption of the Whitehead’s self-propelled torpedoes because of how hard it was for them to reconcile how effective this technology would be at subverting and countervailing the combined strength of their Navy – the world’s most powerful military force at the time. It’s hard to dedicate one’s career to the mastery of one form of warfighting, only for it to become obsolete by the emergence of a new power projection technology. As history has shown time and time again, all it takes is one engineer to subvert the authority of an entire military institution and undermine its combined expertise. As Edwyn Gray notes about Whitehead, “this relatively unknown English engineer exerted more influence over the tactics of naval warfare and the design and development of warships than all the world’s top Admirals and naval architects put together.” [13] Cognitive dissonance due to fear, shock, or pride could also explain why the US rejected General Mitchell’s theories about how vulnerable US Naval warships would be against aerial bombardment. General Mitchell famously led a demonstration where a captured German warship was sunken by an airplane-launched torpedo to demonstrate how easy it would be for adversaries to employ the same power projection

24 tactics, techniques, and technologies against US battleships. Nevertheless, officials rejected his assertions about the emerging strategic importance of air power and continued to invest heavily in the development of battleships throughout the 1930s. Accepting the national strategic implications of disruptive new power projection technologies and then pivoting to adopt it as soon as possible is naturally going to be hard in systems that have been intentionally designed not to change quickly. This challenge is compounded by the complexities of novel technologies with a steep learning curve. But other times, such as in the case of the emergence of the Whitehead torpedo, lack of adoption could be attributed to hubris, cognitive dissonance, or sunken cost fallacies. Generally speaking, being able to recognize the strength and disruptive potential of new power projection technologies requires one to be able to recognize one’s own weaknesses and vulnerabilities to those technologies. For this reason, accepting the emergence of disruptive new power projection technology requires a population to accept the fact that existing defense systems (which they probably paid a lot of money for) aren’t going to make them as dominant as they thought they would. Investing substantially in kinetic warfighting technologies may not provide as much security as expected and could lead to a substantial amount of sunken costs if other nations learn how to utilize non-kinetic or “soft” warfighting technologies via cyberspace that can bypass kinetic strength. If this type of situation were to happen, it would be the fiduciary responsibility of those responsible for sinking so much money into increasingly irrelevant kinetic warfighting technologies to accept these sunken costs and maneuver accordingly. Moreover, shock and even denial are common responses to the sudden existential dread faced by a person or a population when they realize they are losing a vitally important technology lead to their adversaries because of assumptions they didn’t realize they were making – assumptions like expecting the next war to look like the last war or expecting digital-age warfighting technologies to look the same as non-digital-age warfighting technologies. It is hard to reconcile the idea that one’s baked-in assumptions about the future of warfare could irrevocably harm one’s country, but this is the responsibility of all leaders, especially military officers. Empires rise and fall based on the baked-in assumptions guiding the decisions of those entrusted with the responsibility of national security. And warfare is a path-dependent phenomenon that is highly unforgiving to people who make miscalculations because they don’t take the time to seriously question these assumptions. The point is that no empire is safe from technological disruption. It's strategically essential for populations not to allow fear, shock, hubris, or complacency, or sunken cost fallacies slow their adoption of important new power projection technologies when they emerge. Speed of adoption has always been critical. This is especially true when factoring in how severe and highly path-dependent the consequences can be if vital new power projection technologies aren’t adopted quickly. Military leaders especially must hold none of their expertise in existing power projection tactics, techniques, and technologies too sacred, because winning strategies can change as quickly and as often as the technological environment changes, and there’s no doubt that our technological environment is changing rapidly in the digital age, perhaps more rapidly than in any other time in the history of human warfighting.

25 1.2.4 Raising Awareness and Educating the General Public about new Power Projection Technology “Educate and inform the whole mass of the people… They are the only sure reliance for the preservation of our liberty.” Thomas Jefferson [18] For whatever reasons society might struggle to accept the national strategic security implications of an emerging power projection technology, the answer to overcoming these barriers seems to be the same: raising awareness and educating the public. If a society is too domesticated (i.e. too passive or separated from the business of physical confrontation) to understand the dynamics of physical power projection, or they feel inclined to reject a theory based on ideological reasons, this barrier can be mitigated by raising more awareness and educating the public. If the public is suffering from systemic-level analytical bias or they’re struggling to reconcile cognitive dissonance associated with a potentially disruptive power projection technology, this barrier can be mitigated by raising more awareness and educating the public. To that end, the primary justification for this research is to provide more information about the possible national strategic security implications of an emerging power projection technology called Bitcoin. A simple definition of Bitcoin is that it’s the world’s most widely-adopted open-source proof-of-work computer protocol to date. Proof-of-work is a new type of computing protocol which enables users to keep cyber resources (i.e. software and the corresponding bits of information managed by that software) secure against attacks not just by using encoded logical constraints, but by imposing severe physical costs on the computers. Whereas most computer systems only use encoded logical constraints to keep themselves secure against systemic exploitation (i.e. hacking), proof-of-work systems like Bitcoin use real-world physical power (i.e. watts) to keep cyber resources physically secure against attack by imposing severe physical costs (as measured in watts) on belligerent actors. Based on a theoretical framework developed and presented in this thesis called “Power Projection Theory,” the author hypothesizes that Bitcoin is not strictly a monetary technology, but the world’s first globally-adopted “softwar” protocol that could transform the nature of power projection in the digital age and possibly even represent a vital national strategic priority for US citizens to adopt as quickly as possible. 1.3 Background "War is merely the continuation of policy with other means." Carl von Clausewitz [19] 1.3.1 Modern Warfare 101 The author recognizes that many readers do not have expertise or training in modern military theory. Therefore, before proceeding into a detailed theoretical discussion about the potential national strategic security implications of proof-of-work technologies like Bitcoin, it might be beneficial to establish a common understanding of the profession of warfighting and briefly elaborate on the “softwar” neologism. For this, the author turns to one of the most respected modern military theorists, General Carl von Clausewitz. In the early 1800s, General Clausewitz examined the nature of war and defined it as a trinity with three distinct characteristics. First, war is comprised of the same "blind natural forces" of "primordial violence" observed in nature. Second, war contains "the play of chance and probability" rewarding "creative spirits." Third, war is an instrument of national policy used to resolve political disputes. [19]

26 Clausewitz’s explanation of warfare is noteworthy for several reasons. The first is because it acknowledges warfare as a primordial phenomenon – something that has existed since the beginning of life on Earth. If we were to combine this observation with what we now understand about biology, we could note that physical power competitions like warfare predate humans by billions of years. Physical power competitions play an essential role in evolution as well as the establishment of natural dominance hierarchies, including but not limited to human dominance hierarchies. Physical power competitions can be observed in every corner of life at every scale, helping organisms of all kinds solve the existentially important problem of establishing a pecking order over Earth’s limited resources. [19] The second reason why Clausewitz' definition of war is noteworthy is because it acknowledges how the natural forces levied during war are intrinsically blind. In other words, physical power competitions are completely unbiased, indiscriminate, and endogenous to people’s belief systems. Based on what we now understand about physics, we note that the “natural forces” to which Clausewitz refers are forces displacing masses to generate physical power, a.k.a. watts. These watts are most often generated kinetically, through Newtons of force displacing kilograms of mass. We can independently and empirically validate from our own personal experiences that watts are indeed blind. They don’t appear to show favoritism or have any discernable prejudices. They have no known capacity for misrepresentation, and all things appear to be subordinate to them – including and especially the people at the top of existing dominance hierarchies who enjoy high rank, wealth, and social status. [19] Third, Clausewitz's trinity acknowledges war as a game of probability, the outcome of which favors creative spirits. War could therefore be described as not just an indiscriminate physical power competition, but a probabilistic one – a.k.a. a lottery. Moreover, winning the power lottery is not merely about finding ways to amass larger quantities of physical power; it's about combing people’s intelligence to utilize physical power in the most creative and innovative ways possible. Why? As an instrument of international policy making, particularly when resolving international policy disputes. [19] It was from this point of view that Clausewitz made the aphorism for which he is famous: "War is merely the continuation of policy with other means." [19] What Clausewitz meant by this statement is that even though war is inherently destructive, nations do not go to war merely for the sake of demonstrating their capacity for destruction. Instead, nations seek to utilize blind natural forces as an alternative means to resolve international policy disputes. In other words, war is a mechanism for nations to settle policy disputes using physical power (a.k.a. watts) rather than a court of law, because the former is perfectly indiscriminate, while the latter is not. 1.3.2 War vs. Law But why would nations prefer something as lethal and destructive as warfare to resolve international policy disputes when they have a far more energy-efficient option of peaceful adjudication through a court? The answer is quite simple: because they don't trust, respect, or sympathize with the court. To borrow a concept from an anonymous software engineer, the root problem with peace is all the trust that's required to make it work. [20] It’s not easy to get a large population to come to consensus about what “right” means, much less what the “right” ruling is, or the “right” rule of law is. It’s even more difficult to expect large populations of people to trust their lawmakers not to abuse the abstract power and control authority given to them by the existing rule of law. It's perhaps even more difficult to trust people both inside and outside a given

27 nation to sympathize with a nation’s laws. History is full of breaches of the enormous amount of trust that’s required to make law-based societies function properly. The incontrovertible truth of the matter is that law-based societies break down because they are systemically vulnerable to corruption and invasion. Rule of law is a highly energy-efficient cooperation protocol, especially for the purpose of establishing human dominance hierarchies (i.e. pecking order) and achieving consensus on the legitimate state of ownership and chain of custody of limited resources. Rule of law is particularly well-suited for functions like property dispute adjudication. But law-based-societies aren’t perfect; they come with substantial tradeoffs. Like all rulesets, laws are inherently inegalitarian. They create a ruling class and a ruled class. Laws are also trust-based. They only function properly when the ruling class can be trusted not to exploit the ruled class, when people can be trusted to follow the rules, and when neighboring societies can be trusted to sympathize with their neighbor’s rules. In other words, law-based societies are predisposed to systemic exploitation and abuse because they rely too much on trusting creatures that do not deserve to be trusted. Humans are the world’s apex predator; trusting a predator not to attack is not a good security strategy, regardless of how energy-efficient and non-destructive it looks. The intent of law is noble, but for reasons that are exhaustively explored in this thesis, the inegalitarian and trust-based nature of law-based social structures make them systemically insecure, hence every corrupt or oppressive government to have ever existed. Law-based societies are prone to reaching a hazardous state over time, leading to substantial losses for their populations. Perhaps the ruling class finds a reason to systemically exploit the law, creating a state of oppression. Perhaps the ruled class finds a reason to stop following the law, creating anarchy. Perhaps a neighboring nation finds a reason to be unsympathetic to their neighbor’s laws, creating an invasion. 5,000 years of written testimony about law-based societies makes one thing very clear: they become dysfunctional over time. When law-based societies inevitably break down, war typically follows. Like law, war has its own tradeoffs. War is highly energy-intensive and destructive, but it’s also egalitarian. Physical power makes no distinction between the ruling and ruled class; a king suffers the same from a sword through the heart as a peasant (across history, kings and other high-ranking people especially have a habit of losing their heads after losing wars). War is also zero-trust; it doesn’t require trust to function properly. War is also unsympathetic to people’s belief systems, thus completely impartial to them. Therefore, physical power competitions work the same regardless of what people believe and whether people are sympathetic to it. Here we can see that law and war are remarkably complementary to each other in the sense that they represent almost perfectly opposite approaches to achieving the same ends. Together, they form an interdependent system with opposing tradeoffs. Law is an energy-efficient and non-destructive way for society to settle disputes and establish a dominance hierarchy, but it requires people to adopt common belief systems that are highly inegalitarian and trust-based, making them demonstrably vulnerable to systemic exploitation and abuse. On the other hand, war is an energy-intensive and destructive way for society to settle disputes and establish a dominance hierarchy, but it doesn’t require people to adopt a common belief system. and it’s also egalitarian and zero-trust, making it practically invulnerable to systemic exploitation and abuse. These are the tradeoffs that are weighed when settling policy disputes. Understanding the systemic differences and tradeoffs between war and law helps explain why the application of physical power is so effective at restoring law and order when rules-based societies inevitably become dysfunctional. Rulers who exploit rules of law can be compelled to stop using physical power, in what’s often called revolution. Participants who can’t be trusted to follow the rules can be compelled to follow them using physical power, in what’s often called enforcement. Outsiders who don’t

28 sympathize with the rules can be compelled to sympathize with them using physical power, in what’s often called national strategic defense. Whenever laws become dysfunctional, the cure appears to be the same for each affliction: keep projecting increasing amounts of physical power in increasingly clever ways until symptoms improve. As energy-efficient and peaceful as it would be to remedy the exploitation, abuse, and neglect of laws using courts of law, it clearly doesn’t work in all cases – else there would be no war in the first place. A great deal of evidence suggests that signing policy is a far less effective way to fix dysfunctional societies than applying brute-force physical power (see the 1938 Munich Agreement for one of countless examples from history). 1.3.3 War has Major Benefits for Society, as Much as Society Hates to Admit it “I wish there were a war! Then we could prove that we’re worth more than anyone bargained for.” Alexander Hamilton, Hamilton the Musical [21] What makes physical power so useful and effective as a means for securing property and settling policy disputes? One explanation could be what Clausewitz already observed; physical power is completely blind. Physical power doesn’t see people’s feelings, much less allow itself to be influenced by them. This makes physical power impartial and virtually immune to politicking. Physical power has no apparent capacity for favoritism, discrimination, or hidden agendas. It can’t be manipulated or corrupted. It doesn’t appear to have any systemically exploitable attack surface whatsoever because it’s exogenous to people’s belief systems. For this reason, the court of power functions as a true meritocracy. It gives people the freedom to challenge and change policy regardless of rank and social status. This makes it serve as a reliable court of appeals for people who are being systemically exploited by an existing dominance hierarchy. Those who feel wronged by their laws can (and often do) turn to the supreme court of brute-force physical power to give them a judge that is mercilessly impartial. Physical power’s rulings are quick and decisive. The basis for its judgement is known equally by everyone, and its verdict is very easy to audit – making it an easy way to achieve consensus. Another explanation for why physical power is so useful is because it is virtually unlimited and relatively easy to access. There are hard limits to the amount of rank, votes, and social status that a person can obtain within their chosen belief system, and these imaginary forms of power are fickle, nepotistic, and inegalitarian. It takes a lot of time and effort to ascend existing dominance hierarchies. High-ranking positions are often unavailable across multiple generations. It’s far easier and more achievable to simply change the existing dominance hierarchy than to climb through the ranks of the existing one. Physical power is very different. There is virtually no limit to the amount of physical power that people can summon to shape, enforce, and secure the policies they value. Physical power is accessible via one’s own ingenuity and merit as opposed to rank or social status. People also tend to respect physical power more because of how self-evident it is. Physical power is proof of its own merit; it doesn’t need anyone to believe in it to know its worthiness. This is in stark contrast to rank and social status, which are both part of abstract, artificial, and inegalitarian belief systems which are incontrovertibly vulnerable to exploitation and abuse from those who have the most rank and social status. Therefore, as much as people hate to admit it, there are major benefits to war, which would explain why societies wage it so frequently. Moreover, from a sociotechnical perspective, war has proven efficacy. It

29 has clearly played a major part in the formation of high-functioning agrarian societies. Virtually every nation today was forged through war. National borders are sculpted by war. The development of state-of-the-art technology is often accelerated by war. The most warring societies on Earth have consistently had the largest economies. [22] Despite how unpopular it is to talk about the benefits of war, it could be useful to at least take the time to understand what those benefits are, so that we can understand why it keeps happening. Endeavoring to understand the benefits of war could help us learn how to design systems that minimize our need for those benefits. Alternatively, endeavoring to understand the benefits of war could help us gain insights about ways to wage it better, perhaps in “softer” ways that are far less destructive. In the author’s opinion, understanding the merit of war is key to understanding the merit of new technologies like Bitcoin. 1.3.4 Like any other Profession, the Profession of Warfighting could also be Disrupted by Software Computing machines are more than two millennia old. For thousands of years, instructing computers how to operate involved mechanical, kinetic activity (i.e. forces displacing masses). Even after the invention of fully-electric general-purpose computers, programmers were still required to spend days pulling levers, turning dials, flipping switches, pressing buttons, and plugging wires to operate them. Eventually, as technology matured, scientists, engineers, and mathematicians came up with a revolutionary concept: converting kinetic computer programming operations into digitizable states and storing them in electronic computer memory. By digitally converting kinetic computer operations into electrically-actuated states, special-purpose computing machines could be repurposed and reprogrammed instantaneously without the lengthy and expensive process of having to redesign, rebuild, remanufacture, or manually reprogram them. Machines that were either physically impossible to build or impractical to operate suddenly became very feasible, and modern agrarian society was forever changed. Stored-program general-purpose computing was such a profound invention that it caused society to split the way it perceives computer programming into two separate concepts. Manufactured elements (i.e. wares) of computing machines that are material and that require forces displacing masses were conceptualized as “hard” (i.e. mass-based) wares. The other manufactured elements of computing machines began to be conceptualized as “soft” (i.e. massless) wares. Since “soft” computing first emerged, society has raced to convert all sorts of material activities into “soft” or immaterial activities performed by general-purpose, stored-program computers. The past 80 years have been uniquely characterized by the dematerialization of special-purpose machines (e.g. printing presses, typewriters, phones, calculators, televisions) across every industry, as computer scientists and engineers have continued to hone their skills and perfect their craft. Society seems to be constantly reeling from the disruption of “soft” computer wares, somehow always surprised by what can be converted into the massless, disembodied form of a computer program despite how routine the disruption has become. No profession appears to be uninterruptable by the technology we now call “software.” With these concepts in mind, the author would like to challenge the reader with the following question: Is it reasonable to expect the profession of warfighting to be any exception? Is it reasonable to expect that the profession of warfighting won’t be, at least partially, dematerialized and disrupted by software now that there is close to a century of examples of this technology dematerializing and disrupting virtually every other profession? Why wouldn’t we expect the profession of warfighting to be substantially disrupted by software if so many other activities have already been?

30 1.3.5 What would Soft War Look Like? For the sake of argument, let’s assume warfighting will be disrupted by software just as all professions have been disrupted by software. Let’s assume software could enable the dematerialization of special-purpose war machines just as they have dematerialized countless other special-purpose machines over the past several decades. What might that look like? Using Clausewitz's definition of war, consider what it would take to use general-purpose computers and software to engineer a massless, immaterial, or disembodied form of the physical power competition which human societies utilize as their “other means” for settling global policy disputes. In other words, let’s consider what kind of technology might cause society to split the way it perceives the profession of warfighting into two separate mental concepts: “hard” warfighting machines and “soft” warfighting machines. To engage in a soft form of warfighting, people would need to figure out a way to take the mass out of global-scale physical power competitions. One way to do this would be to project physical power electronically via charges passing across resistors, rather than kinetically via forces displacing masses. But simply being able to wield and project electronic power in, from, and through cyberspace is not enough to satisfy the criteria for war according to Clausewitz’s definition because it’s missing two other ingredients. Soft war machines would also need to incorporate “a play of chance and probability that rewards creative spirits.” Therefore, in addition to inventing a mechanism for projecting physical power electronically, there would also need to be some sort of probabilistic protocol for people to compete against each other. There would need to be a clear winner of this competition that doesn’t require a court or a judge to declare it. To that end, it seems feasible that people could design a common protocol which establishes internationally agreed-upon standards for wielding electronic power and competing against each other in a zero-trust and egalitarian manner. The final ingredient for soft war according to Clausewitz's definition is for nations to simply start using this electronic power projection technology to settle their policy disputes. Soft war machines would need to serve their nations as a continuation of policy with other means, just as Clausewitz aptly described war. Nations would need to start using it to physically secure the international policies they value. 1.3.6 Soft War would have Strategic Benefits for Rebalancing Power Structures What exactly would be the benefits of creating a soft form of warfighting? To answer this, let’s consider the previously mentioned benefits of warfighting and then reflect upon what would happen if it became more massless, disembodied, or immaterial. A soft form of warfighting would give people access to the supreme court of physical power, and that court would likely be just as indiscriminate and impartial in electronic form as it already is in kinetic form. For this reason, soft warfighting protocols could be ideal for small countries wielding small amounts of kinetic power (i.e. small militaries) seeking to settle policy disputes with larger countries wielding large amounts of kinetic power (i.e. big militaries). Soft warfighting could also clearly have utility for nuclear superpowers seeking to settle major policy disputes with other nuclear superpowers, because it would enable them to battle each other without the threat of mutually assured destruction. An international monetary policy dispute, for example, represents the type of strategic-level international policy dispute that could be settled using a soft form of

31 warfighting. This kind of dispute would be a prime candidate for nuclear peers seeking to settle a major political conflict in an energy-efficient way that is far less likely to escalate than traditional warfare would. Of course, an international monetary policy dispute wouldn’t be the only type of policy dispute that could be resolved using a soft form of warfighting, but it does seem to be an obvious first use case (especially considering how the US is openly denying another nuclear power’s access to a financial computing network, such as what the US is currently doing to Russia via sanctions). If society were to invent a soft form of international warfighting, the tradeoff between law and war would likely remain the same. War would still represent a more energy-intensive way to settle disputes and establish a dominance hierarchy over limited resources than law would be. But a soft form of warfare would only burn watts electronically, not kinetically. It would therefore have profoundly different emergent behavior – a major one being its non-destructive side effects. By definition, there would be no kinetic forces or masses involved in a disembodied or immaterial form of soft warfighting, so there would likely be no practical threat of physical injury. Thus, a soft form of warfighting would represent a non-lethal form of warfighting – making it a potentially game-changing and revolutionary way for nations to establish, enforce, and secure international policy. Of course, soft warfighting machinery would not completely replace the need for hard warfighting machinery. This makes sense considering how we already know that software doesn’t completely replace the need for hardware. We should expect soft warfighting machinery to continue to rely on hard warfighting machinery just like software continues to rely on hardware. As long as people continue to value material things with mass, they will need a mass-based method of kinetic warfare to keep that mass secure. But it just so happens to be the case that much of what people value is as disembodied, immaterial, and massless as the soft war machines which could one day be used to physically secure them. For example, money doesn’t require mass. Money’s predominate form is already the disembodied, immaterial, and massless form of software. As another example, common belief systems like social contracts or international policies never had mass in the first place. Things like constitutions and rules of law have always been disembodied and immaterial, so who says they can’t be physically secured against systemic exploitation and abuse in a disembodied and immaterial way? Just as software dramatically changed society’s understanding of how to build and operate machines, soft war could dramatically change society’s understanding of how to build and operate social systems, particularly with respect to the way societies agree on policies, physically enforce them, and physically secure them against systemic exploitation and abuse. Similar to how the amount of hardware needed to compute things substantially decreased following the invention of software, the amount of hard warfighting machinery needed to secure our policies and our belief systems using physical power could decrease following the invention of soft warfighting machinery. Considering how software made it feasible to build what were previously considered to be impossible or impractical computing systems, soft warfighting could make it feasible to build what were previously considered to be impossible or impractical defense systems. Bizarre and counterintuitive solutions for national security (solutions like non-lethal and non-destructive world warfare) would theoretically be feasible if a soft form of warfare were discovered and utilized by nation states. And it could dramatically transform society’s ethical calculus in the process.

32 1.3.7 Soft War could Change a Society’s Ethical, Moral, or Ideological Calculus Systems security is a trans-scientific phenomenon. It involves difficult, unquantifiable questions about system design, morals, and ethics. These types of trans-scientific questions would likely become a major topic of conversation if society were to discover a soft form of warfighting – that is, a new way of settling policy disputes in a zero-trust and permissionless way that is physically incapable of causing injury. Would it be moral or ethical to design legal systems using pen and parchment which are (1) insecure against systemic exploitation and abuse, and (2) must be enforced and secured using lethal kinetic power, if society discovered a non-lethal and non-destructive alternative to warfare? Imagine if society were to discover a way to write down policies using C++ instead of parchment, then enforce and secure those policies using physically harmless electric power. A discovery like that could change society’s perception about the moral value of traditional laws and warfare simultaneously. Would it be ethical to prohibit people from securing property and enforcing policies they freely choose to value in a non-lethal way? Some people might argue that it’s not ethical to prohibit people from securing their property and policy at all, even if it does lead to serious injury. For American readers, consider what the authors of the 2nd amendment of the US Constitution would think about government officials advocating for public policies which prohibit citizens from physically securing their property. This becomes a relevant topic of conversation when writing public policy about Bitcoin, if the theories presented in this thesis are valid that Bitcoin represents a physical security system rather than strictly a monetary system. Attempting to outlaw electric forms of power projection technology like Bitcoin could eventually be seen as a double-standard. Why would it be acceptable for citizens to utilize kinetic (i.e. lethal) forms of physical power to secure the property and policy they value, but not electro-cyber (i.e. non-lethal) forms of physical security? The intent of the US 2nd amendment was to make it more difficult for leaders of the US government to infringe upon their citizen’s right to physically secure what they value. Should it matter if the technology used to physically secure property utilizes electric power rather than kinetic power? And so what if that technology uses a substantial amount of power? As will be discussed in this thesis, using a substantial amount of electric power to impose a substantial amount of physical costs is the primary-value-delivered function of the protocol and a key missing ingredient to cyber security as a whole. Civilizations have been projecting physical power to secure the property and policies they value since policies first emerged more than five thousand years ago. There is no evidence to suggest that society has ever found, or ever will find, an energy-free way of doing it. Physical security requires the expenditure of watts. Watts are expended to impose a severe physical cost on attackers, thus stopping or deterring the attack. Therefore, the fact that some policy makers are discouraging the use of proof-of-work cyber security technologies like Bitcoin because of a belief that these technologies expend too many watts could be an affront to the intent of the 2nd amendment and the founding philosophy of the US. [23] Watts are watts regardless of whether they’re generated kinetically or electronically. Rulesets are rulesets regardless of whether they’re written on parchment or programmed into a computer. Private property is private property regardless of what form it takes. There may not be a lot of room for moral ambiguity when it comes to the right to defense; Americans already have a right to bear arms to physically secure their access to the property and policies they freely choose to value, including and especially against their own government (this was the express intent of the amendment according to several founding fathers). It's also not difficult to make the argument that it would be morally, ethically, and ideologically preferable

33 to everyone involved if physical security of property and policy could be achieved non-lethally and non-destructively, as it could be if physical costs were imposed electronically. Now consider the international implications of this technology, rather than just the domestic implications. By converting kinetic warfighting or physical security operations into digital-electric form, written rulesets (e.g. laws) that are inherently vulnerable to systemic exploitation can be secured using (non-lethal) electric power rather than (lethal) kinetic power. International policies (e.g. monetary policy) could be written in C++ and secured using (non-lethal) electronic power rather than being written on parchment and secured using (lethal) kinetic power. An entirely new defense industrial complex could be built around the concept of using electro-cyber forms of physical power projection to impose severe physical costs on others in, from, and through cyberspace. Cyber forces could devote themselves to the task of eliminating the need for bloody, kinetic physical conflict using soft forms of warfighting wherever applicable. How could someone consider this to be an immoral or unethical pursuit, even if it does require a great deal of energy (which is what people implicitly assert when they argue that proof-of-work technologies like Bitcoin are “bad” because of their energy expenditure)? Aside from a fear of technological disruption, why would a nation want to prohibit the use of non-lethal warfighting technology (which is what they could be doing when they consider banning the use of proof-of-work technologies)? Note the baked-in assumptions of the previous question – that a nation even has the option of prohibiting anyone but their own population from benefiting from strategically important physical power projection tactics, techniques, and technologies. If proof-of-work does indeed represent strategically important power projection technology for the digital age, then banning it for ideological reasons (namely that it’s too energy intensive) would be banning one’s own population from benefiting from a strategically important technology that other nations could adopt for their own strategic benefit. It would be akin to denuclearization, a.k.a. banning nuclear weapons for ideological reasons (incidentally, nukes are also considered to be too energy intensive). Those in favor of nuclear disarmament are often criticized for demonstrating a severe lack of understanding about the complexities of global strategic power competition and the dynamics of strategic deterrence. Consider, for example, the fact that Ukraine used to be the world’s third-largest strategic nuclear superpower behind the US and Russia. Ukraine once had a strategic nuclear arsenal that housed thousands of nuclear warheads, but Ukraine surrendered them Russia in exchange for a guarantee that Russia would never invade them. As of this writing, we are one year into a Russian military occupation of Ukraine. [24] 1.3.8 Soft War could be Worth Every Watt Now consider the potential emergent effects of soft war on humanity. Imagine if this new type of war machine accelerated the development of faster computers and more abundant energy infrastructure. Imagine if the economies of scale for that electric power infrastructure could be shared worldwide with everyone who participated. Meanwhile, this would theoretically be possible while preserving a non-lethal option for preserving zero-trust and permissionless control over valuable resources, like international property (e.g. money) and international policy (e.g. monetary policy). If soft war had these positive side effects, nations might become eager to go to war rather than avoid it. Society could appeal to soft war as their first line of defense rather than what has traditionally been their last line of defense. Why risk the demonstrable systemic security threats and disfunction of corrupt judges and biased courts to settle property or policy disputes when non-lethal softwar is an option? Systemic

34 security hazards (e.g. oppressive ruling classes) could be stopped before they escalated into widescale losses, as is often the case for citizens who wait too long to go to war. With soft war, citizens would be more empowered (in the literal meaning of the word) to physically secure themselves against a well-known vulnerability of rules-based society: their own untrustworthy nature. An unthinkable amount of human exertion and sacrifice could be replaced by an electricity bill, and there would be virtually no limit to the amount of electric power citizens could summon to secure the bits of information they value, no matter what it’s used for. People could build machines to harness the power of the sun to do what previously required humans to kill each other at unnatural scale. If any of these theories about soft war are valid, then how could it not be worth every watt? Even if we ignore the strategic imperative of adopting new power projection technologies when they emerge, there is clearly a moral or ethical imperative to adopt non-lethal physical security tactics that don’t result in bloodshed, and proof-of-power protocols like Bitcoin represent non-lethal physical security tactics. 1.4 Objective “If you don’t believe me or don’t get it, I don’t have the time to try to convince you, sorry.” Satoshi Nakamoto [20] 1.4.1 Why are Proof-of-Work Protocols not Recognized as Cyber Security Protocols Anymore? Prior to the release of Bitcoin, academic consensus was that proof-of-work protocols were cyber security protocols that could be used to stop common types of cyber attacks like denial-of-service attacks or sybil attacks. Computer scientists discussed how proof-of-work protocols could be used as a foundation for achieving consensus on decentralized and permissionless networks. But after the release of operational proof-of-work protocols, the primary topic of academic conversation changed from cyber security to money. [25, 26, 27] Today, amidst the buzz around Bitcoin’s functional utility as a monetary payment system, few research papers are investigating Bitcoin’s utility as a proof-of-work cyber security system that could be used to secure other software systems and computer networks from systemic exploitation and abuse. The author finds this missing piece of academic research noteworthy because, for all intents and purposes, Bitcoin appears to validate the theories regarding proof-of-work that first emerged 30 years ago. Most of these theories had almost nothing to do with finance, money, and economics, so why has money become the primary topic of conversation? Bitcoin is incontrovertible proof that “proof-of-work” works as a cyber security system. Bitcoin is a recursively valuable technology that uses proof-of-work to keep its own bits of information secure against systemic exploitation. Bitcoin therefore proves its own merit as a cyber security system, not exclusively a monetary system. Furthermore, the fact that Bitcoin demonstrates proof-of-work works as a cyber security protocol makes it intrinsically valuable, which alone could explain why it gained and maintained monetary value. People have many reasons to want to keep their bits of information secure against cyber attacks, including and especially their financial bits of information but not strictly limited to financial information. It makes perfect sense that a system designed to physically secure bits of information would double as an ideal monetary system, but that wouldn’t be its only possible use case, nor potentially its primary use case in the future, as financial bits of information are just one type of information that people would want to keep secure against systemic exploitation.

35 Bitcoin could therefore represent something far more than just a new financial system architecture. Once we have figured out how to keep financial bits of information physically secure against attack, that means we have figured out how to keep all bits of information physically secure against attack. This would imply that Bitcoin could represent a special new type of computing architecture – a novel way for computers to send bits of information back and forth across cyberspace a zero-trust and physically secure way that isn’t vulnerable to systemic exploitation and abuse like existing computer networks connected to cyberspace are. Bitcoin could have far more national strategic security implications than just a monetary system, and we could be overlooking it for no other reason than the fact that people aren’t questioning their presumptions. We could be like the alchemists of the past, looking at this new black powder concoction and assuming it’s medicine for no other reason than the fact that its creator intended for its first use case to be medicine, so they called it medicine. 1.4.2 Creating a New Theoretical Framework in Response to Two Presidential Executive Orders The primary objective of this thesis is to develop and present a new theoretical framework for researching the risks and potential benefits of Bitcoin. This research objective supports President Biden’s March 2022 executive order (EO) on Ensuring Responsible Development of Digital Assets and May 2022 EO on Improving the Nation’s Cybersecurity. Per White House press release, this EO represents “the first whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.” [28] The scope of this research effort is limited to the underlying technology of Bitcoin, colloquially known as proof-of-work. Current approaches to analyzing the risks and potential benefits of proof-of-work technologies like Bitcoin are most often centered on theoretical frameworks related to financial, monetary, or economic theory. Because analysis of this technology has been centered around these same recycled theoretical frameworks, it is possible that academia, industry, and government are creating systemic-level analytical bias when evaluating the risks and potential benefits of this technology. This is problematic considering how the express purpose of the aforementioned EO is to establish responsible public policy regarding this emerging technology. It should go without saying that it’s not possible to ensure responsible development of public policy if the analysis used to shape that public policy is analytically biased. 1.4.3 Hypothesis-Deductive Approaches to Researching New Technologies are Highly Presumptuous Academia, industry, and government could be introducing analytical bias into their research because of the presumptions that must be made when performing hypothesis-deductive research. Researchers are tacitly making the assumptions about proof-of-work technologies like bitcoin when they use hypothesis-deductive approaches to analyzing its risks and potential rewards. They are presuming this technology is strictly a candidate form of monetary or financial technology for essentially no other reason than the fact that its anonymous inventor called it a peer-to-peer electronic cash system, and that financial use cases happen to be among the first operational use cases for proof-of-work protocols. Based off these presumptions, researchers are almost exclusively using financial, monetary, or economic theoretical frameworks to derive their hypotheses regarding the risks and rewards of this technology. This thesis represents one of few exceptions where the author doesn’t automatically assume that Bitcoin is monetary technology just because that was its first intended use case. [29] The problem with using the same presumption for every research effort is that it has the potential to create systemic-level bias. The presumption could be wrong. Or at the very least, it could be incomplete. Bitcoin could be useful as more than just peer-to-peer electronic cash. An easy way to illustrate that this

36 presumption exists is to observe how much time, effort, money, and talent have been committed to analyzing Bitcoin based on the idea that proof-of-work technology would only be useful as a monetary technology – that it doesn’t have other functionality aside from money which would justify the use of a different theoretical framework to form a hypothesis about its risks and potential benefits. The hypothesis-deductive approach to research requires a theoretical framework from which to derive a hypothesis to deductively analyze. A researcher must choose a theoretical framework to use to analyze Bitcoin before they start analyzing it, which means they must presume Bitcoin is a certain type of technology before they analyze it. But Bitcoin is a novel technology which may or may not have functionality outside the artificial boundaries of the theoretical frameworks chosen to design or analyze it. It’s not reasonable to expect new technology to fit perfectly into existing theoretical frameworks. One contributing factor to this problem is that it is unclear what other fields of knowledge or theoretical frameworks would be appropriate to derive hypotheses and perform deductive analysis of proof-of-work technologies. Exploring the potential risks and benefits of this technology as something other than a peer-to-peer electronic cash system is largely uncharted territory. This technology is unique and still quite new, so alternative functions and use cases are either unknown or speculative, making it unclear what other theoretical frameworks to apply, assuming any exist. Therefore, the choice of theoretical framework itself, from which all hypothesis-deductive approaches to analyzing the risks and benefits of Bitcoin are derived, is highly subjective and vulnerable to bias. The capacity for bias is because researchers are making the same presumption that proof-of-work technologies like Bitcoin only function as monetary technologies when they form their hypotheses about Bitcoin’s risks and benefits. The author has yet to find a formally-published research paper which acknowledges this presumption. Economists aren’t indicating that they understand how tacitly subjective and biased it is to label this technology as strictly monetary technology. This observation alone is a red flag; there’s clearly a risk of analytical bias because researchers aren’t even acknowledging the presumption they keep making and their own capacity for bias. This presents a research dilemma: it’s difficult to perform alternative hypothesis-deductive analysis of new technology when it’s unclear what alternative theoretical frameworks (if any exist) to use to derive a hypothesis to analyze in the first place. This dilemma suggests that a missing ingredient for research related to proof-of-work technologies like Bitcoin is the exploration or the development of different theoretical frameworks from which to generate hypotheses and deductively analyze it. For the sake of developing informed public policy on proof-of-work technologies like Bitcoin, it would perhaps be beneficial to generate a different theory about proof-of-work technology to guide analysis – something that doesn’t regurgitate the same presumptions predominating current research. This is the objective of this thesis. 1.4.4 Computer Science 101: All Computer Program Specifications are Abstract, Subjective, and Arbitrary The potential for analytical bias regarding Bitcoin is especially noteworthy considering how proof-of-work was first and foremost described by computer scientists as a cyber security protocol for fifteen years preceding the release of Bitcoin. Computer scientists have been researching proof-of-work concepts since the early 1990’s, but this is less common knowledge, perhaps because when the design concept was first introduced, it wasn’t called proof-of-work. Like all design specifications, “proof-of-work” was an arbitrary name that emerged several years after the design concept was first introduced in academic literature.

37 Speaking of arbitrary names and design specifications, the first formally published paper to introduce the term “proof-of-work” originally called it “bread pudding.” [27] Other papers called it a pricing function, client puzzle, or a stamp. [25, 26] Like all software specifications, the names assigned to programs which implement proof-of-work designs (to include the name “proof-of-work” itself) are arbitrarily-derived metaphors based on the personal whim of the inventor. A foundational principle of computer theory is that software is an abstraction, therefore all software specifications use semantically ambiguous and arbitrary descriptions. Software engineers arbitrarily and subjectively choose how to describe their software based on what information is important to share about their design. Some engineers choose names based on the software’s intended use case. Some choose names to emphasize design concepts. In either case, the name is arbitrary. In fact, even the term “software” itself is arbitrary. [30] The names and descriptions that software engineers use to describe the design and functionality of their computer programs are not intended to be technically accurate (it’s impossible to produce a technically precise description of an abstract concept like software). The names used are intended to make it easier for people to understand a program’s intended use case and desired complex emergent behavior, which may not be the program’s primary use case in the future. 1.4.5 Bitcoin’s “Coins” Have only ever Been a Metaphor The names we give to our computing systems are metaphors; these names are not meant to be taken literally. At the risk of insulting the intelligence of the reader, the computer system which stores our emails and cat pictures is not literally a “cloud.” Similarly, the computer system used to sell personal and preferential information of billions of people to advertisers is not literally a “face book.” Moreover, any object described using any type of object-oriented software design specification is not an actual object – these descriptions are abstractions used to make it easier to understand the desired functionality and behavior of our software. In 2008, a pseudonymous software engineer named Satoshi Nakamoto decided to describe a variation the first reusable proof-of-work system developed by Hal Finney as a “coin” rather than to continue to call it a “proof.” Instead of calling it a reusable proof-of-work protocol that utilized a decentralized server architecture rather than a trusted server architecture, this pseudonymous engineer named it “Bitcoin” and asserted that it could be used as a peer-to-peer electronic cash system. This pseudonymous engineer was famously short with their description of this technology. Nobody seems to know who the engineer was or where they worked (although they clearly had subject matter expertise in cryptography). The specification they wrote was informally published, and it’s only 8 pages long. This pseudonymous engineer did not elaborate much about the design in follow-on conversations, and they famously disappeared just 2 years after first announcing the project. Nothing was formally published or peer-reviewed. The following point should be made explicitly clear: what academia and industry discuss about Bitcoin – including and especially what has been formally published about this technology – is what other people who didn’t design it have to say about it based off (1) one of many potential use cases for proof-of-work technologies, and (2) a metaphorical design specification produced by a pseudonymous entity that orphaned the project. Everything that has been written about Bitcoin through formal channels was written by people speculating about someone else’s metaphorical design concepts, developing their own theories about it, connecting their own dots based on the same minimal public information. Consequently, there’s no expert or authority on the general-purpose use cases of proof-of-work technologies like Bitcoin. There are only those who have expertise on a singular use case of proof-of-work technologies like Bitcoin.

38 An overwhelming majority of the professional and academic analysis surrounding Bitcoin has been centered around the presumption that the only use case for this technology is to serve as a peer-to-peer electronic cash system, for apparently no other reason than the fact that peer-to-peer payments were the first operationally successful use case for this technology made by the pseudonymous engineer who developed it. The public appears to be ignoring the principles of computer theory and interpreting Bitcoin’s name and design specifications literally, not metaphorically, despite the fact that “coin” was not even the first name or theorized use case of proof-of-work “bread pudding” technology. People are not only adopting the habit of assuming the only possible use case for this technology is financial; they’re also adopting the habit of acting like Bitcoin’s “coins” are only coins, even though it’s incontrovertibly true that all object-oriented software design specifications are abstract. In other words, it’s incontrovertibly true that Bitcoin’s “coins” don’t exist – that “coins” are a completely imaginary concept. Like anything abstract, Bitcoin’s “coins” could just as easily be abstracted as anything else the imagination is capable of conceiving – hence why proof-of-work technologies were called something else for more than a decade before Nakamoto published the Bitcoin design specification. Yet people keep acting like Bitcoin’s “coins” are strictly coins. Moreover, people with economic or financial expertise keep acting like experts in proof-of-work technologies like Bitcoin for practically no other reason than the fact that this technology was arbitrarily called a “coin” and has miscellaneous operational use cases in finance. Internal combustion engines are useful for cutting down trees with chainsaws, but that doesn’t make a lumberjack an expert in internal combustion engine design. So why are financiers claiming to be experts in proof-of-work technologies like Bitcoin? The most they can claim to be experts in is how to use proof-of-work technologies like Bitcoin for miscellaneous financial use cases. Theoretically speaking, anything – to include an arbitrarily-named software abstraction – can be monetized. Monetary value itself is an abstract concept, so of course something abstract can have monetary value. Moreover, bits of information transferred and stored via computers can represent any kind of information, so of course it can represent monetary information. It’s not the fact that people have assigned monetary value to proof-of-work protocols like Bitcoin that the author finds noteworthy; it’s the fact that people aren’t acknowledging how the term “coin” is just as much of an arbitrary name for proof-of-work protocols and their underlying bits of information as the name “stamp” or “bread pudding.” For some reason, much of current academic research doesn’t acknowledge this basic principle of computer science. This would explain why researchers keep recycling the same theoretical frameworks when analyzing Bitcoin. This would also explain how academic consensus about the primary value-delivered function of proof-of-work protocols changed following the operational success of Bitcoin. But why has academic consensus about proof-of-work changed if underlying theories in computer science haven’t? 1.5 Thesis Structure 1.5.1 Overall Structure of the Thesis This thesis is designed to serve as an open letter to the Office of the Secretary of Defense (OSD), US National Security Council (NSC), Joint Chiefs of Staff (JCS), and the American public. In response to the March 2022 OPOTUS EO on Ensuring Responsible Development of Digital Assets and the May 2022 EO on Improving the Nation’s Cybersecurity, this thesis provides an argument for why accommodative and supportive Bitcoin policy could be a national strategic security imperative. It also provides an argument for why the Department of Defense (DoD) should consider accumulating a strategic stockpile of Bitcoin.

39 These arguments are made from the author’s perspective as an active-duty US officer and national defense fellow assigned to MIT to research the national strategic impact of emerging technology. This thesis also explores the significance of Bitcoin’s proof-of-work protocol from a broader perspective of computer theory. It presents an argument for why Bitcoin deserves to be treated as something wholly different than so-called "blockchain" or "cryptocurrency" technology. It explains why Bitcoin is both physically and systemically different than other “cryptocurrency” protocols and is therefore inappropriate to categorize as the same type of technology despite having similar semantic descriptions. The theory presents the core concepts of Power Projection Theory in serial fashion, starting with foundational concepts and gradually building upon each other to arrive at a novel description of Bitcoin in later chapters. If the reader skips ahead, they might miss important context needed to fully understand each concept in detail. However, each chapter uses the constant comparative method of grounded theory, making the core concepts presented in each section repetitive. Therefore, the reader will likely be able to grasp the core concepts of the theory no matter how far they skip ahead. The reader is encouraged to read each chapter sequentially and to revisit previous chapters as needed to understand core concepts. Each chapter is structured as a collection of essays or what grounded theorists call “memos” which capture the core concepts of the theory and assemble them together according to similar conceptual categories and themes. The title of each section states the core concept presented in each memo. Because the author utilized the interpretivist approach to grounded theory, there is no separate chapter providing a literature review. Instead, the literature review is spread out across the thesis and is used to illustrate core theoretical concepts in a structured manner to provide additional conceptual density. If readers find themselves wondering what a given topic has to do with Bitcoin, that’s 100% intentional. The author deliberately searched for anecdotes and diverse information that seem as unrelated as Bitcoin as possible to add conceptual density to the theory and make it richer (a strategy encouraged by those who created grounded theory). Each memo, no matter how unrelated they seem to be, is linked together by core conceptual categories. An underlying “theme” plays out and eventually culminates in a new and unique specification of Bitcoin as a power projection tactic rather than a monetary technology. The intent of this approach is to capture the complexity of this technology, address its wide range of sociotechnical implications, and inspire researchers from across multiple different fields of research to derive new hypotheses to analyze in future research endeavors from their respective fields of knowledge. 1.5.2 Chapters 1 & 2 Set up Power Projection Theory Chapter 1 gives the inspiration and justification for conducting this research. The author explains what inspired him to create a new theory about Bitcoin and why he felt like it was his fiduciary responsibility as a military officer and US national defense fellow to do so. The reader is provided with background information about military strategy and the author’s profession of warfighting. The reader is also given some introductory thoughts about the “softwar” neologism. The purpose of this chapter is to present the argument for why a different theoretical framework is needed to analyze the strategic implications of proof-of-work technologies like Bitcoin. Chapter 2 provides a breakdown of the methodology used to formulate this theory. The author discusses why he chose to use grounded theory and provides an overview of the methodology and analytical techniques used. The author concludes this chapter by highlighting the advantages and disadvantages of the grounded theory methodology and the lessons he learned along the way.

40 1.5.3 Chapters 3 Explains the Basic Principles of Physical Power Projection Chapters 3-5 represent the main deliverable of this thesis: a novel theory called Power Projection Theory. The theory is divided into three parts, where each part corresponds to a separate chapter and represents a separate core conceptual category. Chapter 3 provides the foundational theoretical concepts of Power Projection Theory. The author utilizes different fields of knowledge and theoretical frameworks (namely biology and military strategy) to explain why physical power projection is essential for survival and prosperity in the wild, and how it’s used to establish dominance hierarchies (a.k.a. pecking order). This chapter explores theoretical concepts associated with property ownership and physical security, using examples from nature to illustrate how organisms develop increasingly clever power projection tactics to settle disputes, determine control over resources, and achieve consensus on the legitimate state of ownership and chain of custody of property. The purpose of this chapter is to introduce the core theoretical concepts needed to understand the complex sociotechnical relationships between physical power, physical security, and property ownership. The core theoretical concepts presented in this chapter frame the discussion presented in follow-on chapters. The primary takeaway from this chapter is a detailed understanding of why antlers are such a profound power projection technology, because of how they enable intraspecies physical power competition while minimizing intraspecies injury. 1.5.4 Chapter 4 Explains the Basic Principles of Abstract Power Projection (and Why it’s Dysfunctional) Chapter 4 provides a deep-dive into how and why humans use different power projection tactics than animals. The author provides a deep-dive on different power projection tactics, techniques, and technologies employed by modern agrarian society. This chapter can be viewed as having two parts. Part 1 focuses on how humans create and use abstract power as a basis for settling disputes, controlling resources, and establishing pecking order. Part 2 focuses on explaining why sapiens inevitably revert back to using physical power as the basis for settling disputes, controlling, resources, and establishing pecking order the same way other animals in the wild do. In other words, Chapter 4 provides a theory about why humans try but never succeed at escaping from war. The chapter concludes with a discussion about how a strategic nuclear stalemate may place human society in a highly vulnerable position, which could be alleviated by a “soft” or non-kinetic form of warfighting. This sets up the reader for understanding the potential sociotechnical and national strategic implications of Bitcoin. The purpose of Chapter 4 is to highlight the complex sociotechnical tradeoffs and implications associated with different power projection tactics, techniques, and technologies employed by human societies. This chapter rigorously explores moral, ethical, ideological, and design decisions that people make when they use both abstract and physical power projection tactics. Across a long series of memos, the author summarizes the emergent behavior associated with these different types of power projection tactics using a constant comparative method. The point of this lengthy discussion on human power projection is two-fold. First, it illustrates how the subject of national strategic security is a complex, sociotechnical, trans-scientific phenomenon that involves frustratingly unquantifiable questions related to ethics and design. Second, it highlights the glaring vulnerabilities and systemic security flaws of our existing systems of governance and resource control. The core concepts discussed in this chapter are highly relevant to follow-on discussions about Bitcoin because the systemic security hazards identified in this chapter represent cyber security hazards too. This discussion is also designed to present the background needed to understand the “so what” of Bitcoin because it alludes to how substantial Bitcoin’s impact could be on the organization of future

41 human societies. The primary takeaway from this chapter is that humans need to find their own version of antlers that would enable intraspecies physical power competition while minimizing intraspecies injury. 1.5.5 Chapter 5 Explains how Computers Change Power Projection Tactics, both Abstract and Physical Chapter 5 takes the core concepts presented in chapters 3 and 4 and uses them to present a novel explanation about why Bitcoin could be a groundbreaking new type of physical power projection technology rather than merely a monetary technology. This chapter begins with a deep dive into computer science and the challenges associated with software systems security. The author utilizes core concepts presented in the previous chapter to point out how the emergence of modern computing has empowered software engineers to create abstract power and use it to give themselves asymmetric and unimpeachable control over one of 21st century society’s most precious resources: bits of information. The first half of Chapter 5 illustrates how the current architecture of the internet makes society highly vulnerable to massive-scale systemic exploitation and abuse from computer programmers. It argues that society is going to invent new types of physical power projection technologies to secure themselves against exploitation and abuse via cyberspace. After highlighting this vulnerability, the author proceeds into a multi-part explanation of how proof-of-work technologies like Bitcoin could be used to mitigate these emerging threats by empowering people to impose severe physical costs on belligerent actors in, from, and through cyberspace. The second half of Chapter 5 presents novel theories about proof-of-work protocols. Here, the author performs a deep-dive about why he believes Bitcoin may represent the discovery and utilization of completely new type of state mechanism called the “planetary state mechanism.” He argues that Bitcoin could represent humanity’s adoption of global-scale planetary computer that has been intentionally reversed-optimized to be as expensive as possible to operate, giving it irreproducible emergent properties that would be physically impossible for ordinary computers to replicate. The purpose of Chapter 5 is to present a completely different perspective about Bitcoin using a completely different theoretical framework that has little to nothing to do with money, finance, or economics, but everything to do with computer science and national strategic security. Using Power Project Theory, the author highlights how technologies like Bitcoin could have sociotechnical implications which exceed our current understanding of this technology, not just with respect to computer science and cybersecurity, but also with respect to national strategic security as a whole. The author concludes this chapter with an argument that Bitcoin could represent a new way of warfighting called “softwar” that could forever change international power dynamics, and even mitigate a strategic-level stalemate between nuclear superpowers. The primary takeaway from this chapter is that Bitcoin could represent the discovery of what the author describes as “human antlers.” 1.5.6 Chapter 6 Discusses Key Takeaways from Power Projection Theory Chapter 6 is the closing chapter of the thesis. The author enumerates several new hypotheses about Bitcoin which he derived from Power Projection Theory and encourages the research community to consider analyzing them. The author gives some advice about next steps for researchers and offers some brief advice to US policy makers. The author concludes the thesis with some closing thoughts about the potential historical, strategic, and ethical implications of proof-of-work technology.