“When goods don’t cross borders, soldiers will” — A powerful statement from the French philosopher Frederic Bastiat, to whom many bitcoin enthusiasts trace their ideological roots.
Just off of the coast of North Carolina during the Christmas of 1864, the Union had gathered the largest fleet of Northern Men-of-war ever assembled by the sovereign country of the USA. Fort Fisher, a massive fortification held by the Confederates, was built to protect the most important shipping port of the mid-Atlantic to keep supplies coming into the newly-formed CSA from their English and French allies, who had heavy economic interests in the productive plantations of the South. The Northern brass knew that cutting off supplies to the rebelling south was critical in quashing the uprising and restoring the nation under a single authority and it had become evident after the first several battles of the Civil War that the rebels, under the command of General Robert E. Lee, were not going to go gentle into that good night.
Enter the Anaconda Plan, a naval scheme hatched by Union General Winfield Scott. In order to slowly suffocate the ragtag squad that dared to upset the federal apple cart, the US Navy employed a blockade outside of all rail-connected southern shipping ports — the theory being that this would shut down the nascent nation via economic strangulation. No ship in, no ship out.
Of course, nearly every major player in the western hemisphere had become addicted to the sugar, tobacco, and cotton coming out of the south and had something to say about these blockades. “Hell no.”
The dissent did not come in the form of a parchment scrawled with a feathery pen or an assembly of diplomats, but in the form of the Blockade Runner. These ships were built for two things: speed and capacity, in that order. Blockade runner captains operated on either an official basis for Britain and France under a letter of marque or an unofficial basis as a pirate. In retrospect, these vessels look grotesque; franken-boats of a chronological mesh-point between the tall ship era and the burgeoning steam vessels of the later 19th century. But they could fly.
Back to Fort Fisher. It was Christmas of ’64 and the Confederate rebellion was becoming long in the tooth, as was the Anaconda Plan. While the North had become more adept at chasing the blockade runners, they still couldn’t stifle them. And in one night, under the grip of a dark southern night just off the coast of Wilmington, a runner came creeping in from Bermuda, its last port-o-call before a steady grip on the helm and a stiff upper lip were the only things separating the captain & crew from Davey’s Locker. And so the ship sailed, ready to load up with goods for export to the many waiting parties, and preparing to pass through the eye of the needle.
Fort Fisher guarded the entrance to the Cape Fear River near the border of North and South Carolina, protecting the necessary port from Northern advance in order to keep the South stocked up for battle and liquid enough through export to maintain the war effort. The North knew this and had sent 125 heavily armed Navy men-of-war steaming and sailing from up and down the eastern seaboard to finally put an end to these roving profiteers with steely resolve to confront the meat grinder head-on and keep goods flowing to & from the southern states. For weeks they sat, accumulating ships, waiting for the next daring private captain to step into the ring. And finally one did on the night of December 23, 1864. As an ant approaches man, the young captain crept quickly and quietly through the choppy waters between Bermuda and Carolina, knowing the highest danger wasn’t the Bermuda Triangle itself but the fleet of Northern vessels watching for his ship to attempt a breach. But breach he did, outrunning cannon fire, grape shot, small arms, and ordnance to jump the creek into the southern-controlled waters of the Cape Fear River. Bringing much needed supplies to the downtrodden locals and taking what they had to trade, the nimble steamer sailed once more through the Northern naval wall.
Despite the most tyrannical of efforts by authoritarian regimes, trade finds a way. In this instance, a black market formed between sovereign states rather than small private entities and actors. And the next chapter of the bitcoin saga may feature this arrangement in a way that historically rhymes with the Confederate blockade runners. But instead of franken-ships, the new medium will be bitcoin and other cryptocurrencies. We’re seeing this begin to emerge in Venezuela as they are issuing a national cryptocurrency, the Petro, to help supplement payment to workers in the oil industry. Despite the quality of the protocol supporting the Petro (which I assume is as shoddy as anything else that regime touches) it represents an interesting new development — a possible temporary alliance between the individual and embargoed regimes worldwide who are looking to trade. If Venezuela can clear international payments for goods by using a cryptocurrency, how long before Cuba follows? Iran? Once the dam begins to crack and nations the world around see money changing hands, uncensored and unstoppable, how long before dominoes start to fall?