New York, January 17, 1920. The Volstead Act goes into effect at midnight sharp. From that moment on, producing, transporting, or selling alcoholic beverages is illegal throughout the United States. John D. Rockefeller, Henry Ford, and the Anti-Saloon League celebrate: they did it. Alcohol is outlawed.

Thirteen years later, the American government quietly repealed that provision, because prohibition had achieved exactly the opposite of what it intended: if before 1920 there were 15,000 legitimate bars in New York, ten years later 32,000 clandestine ones were operating. Alcohol production had grown from 190 million liters in 1920 to 290 million in 1932. The alcohol black market was worth $3.6 billion a year, a figure equal to the entire federal budget of the time. Al Capone had built a $60 million fortune from nothing, in five years.

The State had tried to remove from the market something people wanted, and people, in response, had built parallel structures.

This story came back to mind while I was reading a comment on Fermata #288. Last week I wrote about Bitcoin as the last mathematical scarcity in a world where artificial intelligence is making almost everything else abundant.

Giac, a Bitcoin Train reader, commented with an interesting argument that deserves a response:

https://x.com/giac_bit/status/2028164067941052909

The reasoning paints a dystopian scenario: governments imposing CBDCs as the only legal means of payment, Bitcoin banned or heavily restricted, residual access guaranteed only to those who possess advanced technical tools - such as AI agents. In this vision, Bitcoin would become not the currency of freedom, but yet another privilege for those who already have everything.

It’s a scenario I don’t believe will come true, but it’s worth trying to take it seriously.

Let’s start with an elementary fact: every time a State has banned something people wanted, the result has always been the same.

American prohibition is the most documented laboratory. In seven years from the Volstead Act coming into force, the number of illegal alcohol production centers went from 400 to over 80,000. Speakeasies, despite being illegal, had become the normal social experience of an entire American generation, hidden behind pharmacies, butcher shops, and grocery stores, accessible with a password. Any place could conceal a passage to a parallel world of cocktails and music.

The same pattern repeated with drugs. The American War on Drugs officially began in 1971. In the following fifty years, the United States spent about $1 trillion on enforcement. Result: the global illegal drug market is worth over $330 billion a year today, and the real price of heroin on the black market dropped from $1,896 per gram in 1981 to $408 in 2011, with average purity increasing from 11% to 28%. More prohibition, more market. Lower prices. Increased availability.

The rule is ironclad and applies to every repressed economic demand: censorship always generates a black market proportional to the demand it fails to satisfy. The greater the censorship, the greater the black market that is generated, because people aren’t stupid. In February 2021, the Central Bank of Nigeria banned regulated financial institutions from dealing in cryptocurrencies. In the three months following the ban, peer-to-peer Bitcoin volumes in Nigeria grew by 27% - from $80 million to $103 million per quarter. Today, according to Chainalysis, Nigeria is among the most active P2P Bitcoin markets in the world, with volumes exceeding $400 million. Sub-Saharan Africa surpassed North American volumes on peer-to-peer circuits precisely during the years of the ban.

The Chinese case is even more instructive, because China has digital surveillance tools that no Western democracy has implemented (yet). In September 2021, the central bank in Beijing banned all cryptocurrency exchanges: any transaction, illegal. Chinese hashrate disappeared from the radar for a few weeks, then re-emerged - discreetly, through VPNs and OTC circuits. Today China represents about 14% of Bitcoin’s global hashrate, third place in the world, in a country where owning Bitcoin is technically illegal. In 2024, according to Chainalysis, the OTC cryptocurrency volume in China reached $23.7 billion.

These numbers come from environments with much more efficient surveillance than any European CBDC in the design phase. If bans haven’t worked there, why should they work in Frankfurt or Rome?

The (in my view) flawed equation

Let’s return to the central point of Giac’s comment: even admitting the dystopian scenario - mandatory CBDCs, Bitcoin purchasable only through unregulated channels - the implicit assumption is that AI agents are by definition elite technology.

But is that really the case?

ChatGPT reached one million users within five days of launch, in November 2022. Today it has 900 million weekly users. Basic AI tools are accessible at $20 a month or free. OpenClaw is free, open-source, and usable via API.

The democratization of technological tools is the pattern that has repeated with every relevant technology of the last thirty years. The internet, smartphones, the cloud. Always the same stages: expensive technology reserved for experts, then rapid diffusion, then mass adoption. Certainly, extremely centralized and in the hands of a few, but that’s another matter: the benefits of the enormous availability of information generated by the internet are undeniable.

And then there’s the deeper question: in a world where everyone has a personal AI agent, does monetary control become easier or harder?

Let’s try to imagine it: a plumber who occasionally works off the books can task his agent with converting his service directly into satoshis through a peer-to-peer circuit, without ever going through the banking system. A craftsman can barter part of his work for precious metals - also traded on the black market, as has always been the case - and convert them. A remote worker can receive Lightning payments already today.

AI agents in this context distribute power, they don’t concentrate it. They work for whoever uses them, not for the central bank that issued the CBDC. Agentic adoption of Bitcoin could paradoxically make monetary control harder, not easier: instead of a few centralized exchanges to block with a phone call, authorities would find themselves facing millions of individual agents operating P2P, each on behalf of their own user.

What prohibition already knows

There’s one last irony worth highlighting.

A ban on Bitcoin would generate the same dynamics that prohibition generated with alcohol: shift toward P2P and OTC, growth of underground infrastructure, practical impossibility of enforcement on a global pseudonymous network without physical borders. And in the meantime, those who manage those channels would become the new Al Capone - only instead of contraband whiskey, they’d be selling the scarcest monetary good on the planet.

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