Here is an interesting article by a Mr. Felipe Pereira that examines how Bitcoin is disruptive to nation states’ power and how this might play out in the future.
Bitcoin’s politically disruptive nature follows from the idea that individual sovereignty is based on the dynamic between the cost to defend private property and the return on violence. Governments originated because the cost to protect private property from plunder by raiders was high, and the return on violence of predation was also high. Because of this dynamic, individuals ceded personal sovereignty to a territorial organization by following rules and paying taxes in return for protection against violence or coercion.
As conquering groups became larger and armaments became more advanced (in particular, after the advent of gunpowder), returns on violence scaled upward. The inevitable result was the nation state, which facilitated systemic protection of it’s citizens and predation of resources from competitors. However, the problem is that the nation states assumed a monopoly on violence and wield it as a coercive force against their own citizens.
Asymmetric public key cryptography, however, radically restructures the dynamic between defense and return on violence. With strong cryptography, the cost to defend private property (your bitcoin) is essentially zero. All you need is free software and know-how. If done right, cryptography significantly reduces return on violence: an attacker cannot extort your private property no matter how much violence or coercive force they can muster. Would-be attackers no longer have any incentive to violence if defense of property is free.
“No amount of violence can solve a math problem.” -Trace Mayer
What this entails is that just as inevitably as the nation state followed the gunpowder revolution, so will the demise of the nation state and rise of sovereign territories/individuals will follow the information revolution, of which Bitcoin is an integral pillar.
How will this all play out? Who knows. But this article imagines how it may unfold. It is all hypothetical, but a fun read and something to think about.
PSA: this articles draws heavily on ideas from The Sovereign Individual, a popular book among hardcore bitcoiners. I highly recommend it.