Christianity started out as a religious sect on the outskirts of the Roman Empire around 30AD. Initially, it was ignored by the powers in charge. For decades, Romans didn’t even make any distinctions between Jews and Christians.
With time, Christians started to suffer persecution reaching its highest point during the so-called “Great Persecution”. It seemed that they were doomed in a battle against one of the greatest empires in human history.
However, right after the Great Persecution, History was shaken when Emperor Constantine convert himself to Christianity. Absolutely unthinkable some years prior, Constatine’s action started a movement that made the religion mainstream and part of the political establishment. The Church became a powerful institution, outlasting even the Roman Empire itself. Constantine’s conversion was called the Constantinian Shift.
In the next 10 years, it will be obvious that what we are experiencing right now is Bitcoin’s Constantinian Shift moment. Powers that have been outlawing, condemning and fighting bitcoin will surrender and convert.
In the process, some of the initial idealism that led to Bitcoin’s creation will be captured by the powers in place. In the end, we will have a changed world, but very much like the one we live in.
Christianity started as a sect from Judaism and mostly ignored by the emperors initially. The first historical instance where Christians started to appear was when Emperor Nero blamed Christians for the Great Fire of Rome. It was also during Nero’s reign that apostles Peter and Paul were martyred, according to Christian tradition.
But the official distinction between Christians and Jews only came in the year 96, by tax reasons, of all things. Christians successfully petitioned to be spared from a tax imposed on Jews, recognizing them legally as a separate group.
For the following two centuries and a half, Christians were sporadically persecuted — until Emperor Diocletian started the “Great Persecution”. It lasted from 303 to 311, and during this period Christians were arrested, tortured, mutilated, burned, starved, and condemned to gladiatorial contests to amuse spectators.
The official end of persecution was in April of the year 311, when they were granted the right to practice their religion.
And then, in 312, a dramatic event led Emperor Constantine’s conversion to Christianity.
Bitcoin cyclical shifts
The world is more decentralized today and we have multiple institutions that exert power: nation-states like the US or China; supra-national institutions like the UN or the EU; companies and even some individuals. The shift for bitcoin cannot be a one-person decision like Constantine’s. And that’s why the process is happening as you read this text.
Bitcoin started out mostly being ignored by governments, institutions and companies. A fringe libertarian idea published in an email list as a whitepaper. An interesting solution for a computer science problem.
But gradually (and, coincidentally, also for tax reasons) governments started to recognize that Bitcoin was something they would have to deal with
The first time bitcoin started to make news and appear on the radar of the mainstream media was by its use to enable so-called illegal activity: the most famous dark market on the web, Silk Road, and a website that leaked classified governmental documents, Wikileaks.
As public awareness and price grew and reached its peak in 2017, companies, particularly banks, started to be provoked to give their opinion. JPMorgan, in the figure of its CEO Jamie Dimon was particularly vocal:
“I’d fire them [employee trading bitcoin] in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.”
Among nations, China decided to ban cryptocurrency exchanges from operating in its territory — although, by some metrics, China is still one of the most important participants in bitcoin, particularly through mining.
The mainstream narrative was that bitcoin was a fad and the cryptocurrency space mostly died after 2017. But what has happened over the initial decade of bitcoin‘s existence is that, as it grew, it moved different participants through different stages of a cycle:
Ignorance → Repulse → Acceptance → Embrace.
A dramatic event
Sometimes for important shifts to happen in history, we need a single large event that provokes a breaking point.
It is said that Constantine’s conversion happened after the Battle of the Milvian Bridge, a battle between two Roman emperors: Constantine and Maxentius. Constantine’s victory led him to end the Tetrarchy (a system where the Roman Empire effectively had four emperors sharing power) and to become the sole ruler of the Roman Empire.
Tradition says that he looked up to the sun before the battle and saw a cross of light above it. He then commanded his troops to adorn their shields with a Christian symbol (the Chi-Rho), and they were victorious.
The dramatic event for Bitcoin may be happening right now. The pandemic, the downturn, the crisis, the government responses. The unprecedented fiscal and monetary expansion in response to the pandemic will have lasting effects on our relationship with money and with the institutions that control it.
Some early skeptics are beginning to change their minds. Some individuals like macro investor Paul Tudor Jones have indicated that the crisis and the responses were enough for them to see this change. Some companies that had either ignored or repelled bitcoin businesses are now showing signs that the early repulse may be weakening — and this includes JPMorgan.
It’s not clear the process happening right now is enough for larger shifts, such as nation-states deciding to own bitcoin through their central banks. But I believe that there is a reasonable chance they’ll embrace it.
And why would they? Mostly to keep the status quo.
New Emperor, Same Old Mistakes
Constantine’s conversion was followed by the Edict of Milan, making Christianity legal. The emperor became the main patron of the faith and elevated Christians to high ranking positions.
Constantine’s laws enforced and reflected some of his Christian and humane attitudes. Crucifixion was abolished for reasons of Christian piety (replaced with hanging). It was forbidden for a prisoner to be kept in total darkness. Publicly displayed gladiatorial games were eliminated in 325.
But mainly, Constantine’s move was a way to keep the status quo by change.
“The prevailing spirit of Constantine’s government was one of conservatorism. His conversion to and support of Christianity produced fewer innovations than one might have expected; indeed they served an entirely conservative end, the preservation and continuation of the Empire”
— Hans Pohlsander, The Emperor Constantine
By bringing Christianity into the high ranks of politics, he also managed to establish the orthodoxy for the Church, introducing the practice of Councils, that would rule what is considered the accepted faith — and what’s not.
In this sense, we should prepare for a similar process happening in Bitcoin. As larger players step in, in a series of “Constantinian Shifts”, they will inevitably guide the way the project will develop, what is acceptable, what’s not.
This is mostly the reason why large institutions and ultimately nation-states will embrace bitcoin in some form, after facing their own internal or external struggles. To keep hold of their power, or at least, to prevent competitors from doing harm to their strategic position.
I don’t believe the wildest libertarian dreams will be realized through bitcoin, just the way the wildest pacifist dreams of early Christians were not realized. One lesson that history teaches us is to be skeptical of utopias and idealism.
Bitcoin may have started as a libertarian move to empower the individual against the state through censorship-resistance, algorithmically hard form of money. But it is unlikely that it remains immune to some form of capture by the incumbents, through the various stronghold points in the system.
Still, we may be better off.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — –
PS: I heard this analogy of Constantine’s conversion in an excerpt of Frank Chaparro’s podcast with Anthony Scaramucci. That made me go further into this bit of history.