Bitcoin; Crypto Key Unlocking The Autonomy Of Trust

Bitcoin, once ridiculed as money for geeks and then condemned as a tool for criminals gained much wider understanding from the mainstream in the last year. More people are realizing that Bitcoin opens doors to financial freedom. With it, we can transfer any amount of money anytime, anywhere in the world instantly, securely and without permission. What enables this truly peer-to-peer transaction is Bitcoin’s underlying technology of the blockchain and its core invention of distributed trust. This is portrayed as a shift into trusting math instead of central banks and governments. Some critics view it as cold algorithms replacing the human trust that is a foundation for healthy society. But is this true? What does decentralized trust mean?

Before we dive into this question, let’s first look at the model of trust in existing systems. Virtually every human interaction in society is based on trust. As society developed into modern nation-states, interaction that was experienced in small communities faced the issue of scalability. To solve this problem, society became more and more centrally organized, implementing representation as a form of governance. In this model of centralization, access to the network is closed, with only a few having full credentials to view and administer the system. Entry and participation into such a network required permission from these appointed administrators and necessitated the walls and borders around its spoke and hub structures.

For instance, to assure the equal application of laws and guarantee the basic functioning of the legal system, we need to trust police, lawyers, judges and politicians. In this case, trust is derived from a central authority through a careful vetting process that separates experts from non-qualified actors and is delivered through layers of bureaucracy. No matter how good the intentions are of those who created it, systems of representation enable levers of control that have always been susceptible to corruption.

Over time, the divide between those who govern and all others widens, making the whole system vulnerable to single points of failure and internal abuse of power. Once elevated, these experts are increasingly divorced from the interests of the common people. Those who manage the networks become a new class of professionals. They hold all keys to the castle and guard the hierarchical structures of power distribution.

This centralization of trust often results in disempowerment of ordinary people, where legitimacy and authorship is transferred from citizens to institutions, politicians, lawyers and economists. As a result, much of the power to make vital decisions about ones own life tends to be forfeited, along with the right to trust one another to freely associate, innovate and build community on shared values.

Permission to Transact

The current financial system as a part of centralized society mediates essential human interaction. Modern transaction systems have been drastically altered from a form of exchange experienced in ancient times. In his book, Debt: The First 5,000 Years, anthropologist David Graeber (2011) described how before the invention of coin or cash, money was a credit arrangement. He dismantled the economists’ myth of barter as the origin of money. Contrary to how most people have been taught, in those times when people exchanged goods with one another what they were actually doing was a form of giving – as a neighborly favor.

He explained how in ancient Mesopotamia, exchange was based on horizontal social relations expressed in the sense of our indebtedness to one another; you helped me, so I feel I owe you and wish to give in return for your favor. Long ago in these small communities, humans were using an elaborate credit system to keep tabs on those favors and account our obligations toward one another. Back then, people were more able to interact face-to-face and develop trust. Economic interests that bind people were more direct and close to neighborly favor, with individuals genuinely wanting to help one another. A balance was struck when the favor was returned.

Money in the modern state has become extremely centralized. It has come to function as debt, transforming social relations into power dynamics and installing interest obligation that is abstracted from interaction between everyday people. Graeber described how this was advanced further through the invention of debit and credit cards, which has recently created a largely cashless society. He noted how the shift into transacting digital currency through the modern credit system has transformed the relationship of those who engage in monetary exchange:

“All of these new credit arrangements were mediated not by interpersonal relations of trust but by profit-seeking corporations and one of the earliest and greatest political victories of the U.S. credit card industry was the elimination of all legal restrictions on what they could charge as interest” (p. 368).

In the realm of finance, the schism between ordinary people and ‘experts’ has taken a form of creditors and debtors. In modern times, the basic human action of borrowing, lending and exchange has been mediated by private companies, banks and payment processors such as Chase, Visa and MasterCard. One’s ability to transact with one’s fellows now largely requires permission from these mega corporations.

The Man in the Middle

Through institutionalizing a monopoly that removes and outlaws effective competition, money printers and creditors can now act like the new Kings who dictatorially direct and divert the flow of finance. Predatory lending and the gutting of anti-trust and usury statutes that had once protected ordinary people have now normalized a kind of extractive debt peonage, while these investment firms and bankers institutionally protect their obscene profits and investments (gambling) with zero interest credit made available through central banks who print money out of thin air. They set contracts on their terms because they know that our crucial transactions depend on their monopolized trust. Individuals have largely become unable to freely choose whether to enter into a relationship or negotiate the terms of a contract without this unelected man in the middle.

Third party authority of a centralized system has interests quite different from that of the individuals exchanging goods or services. For example, someone who lives in the U.S. wants to purchase goods from Indonesia, uniting her interest in enjoying the product with the seller’s desire to share the product with an agreed upon means of exchange. When interests are joined and based on genuine goodwill, it can be a real exchange, creating value for both parties. However, the middleman in a centralized Visa or Western Union-like payment system has no real relation to the shared interest between the buyer and seller beyond the collection of transaction fees and maintaining their monopoly within the system. These third parties act as gatekeepers to authorize the transaction, thus controlling access to the financial network. This unregulated rent-seeking behavior has now exploded, leading to a system of private taxation that is obscenely profitable. The result is that the wealth distribution today is quickly coming to resemble that of the medieval era.

We may be tempted to view such a system as based on trust. In reality, this is disingenuous. It is actually a system based on obedience and coercion. It is another form of control camouflaged as a necessary service. Private companies lock people into a relationship based not on equality of peers but on an imbalance of power through this monopolized payment system and the arbitration that comes with it. Centralized trust discourages the two parties from developing personal relations out of themselves and freely determining the course of their own transaction. With charge-backs, payday loans, massive transfer fees and subprime mortgages and without the individual’s capacity to set terms of contract and rights to exchange, we have become automatons programmed to dutifully obey rules set by the controlled market vultures that get fat by extracting massive wealth from the 99.9 %.

Trust is something that can never be required or enforced from outside. Grown organically, it is the basis for any meaningful human interaction and will only be developed through a relationship based on equal peers. For trust to be possible, each person needs to freely form relationships out of themselves, independent of power structures that might interfere with that process.

In Each Other We Trust

Why do we need these private companies to mediate interaction? Why do we need their authority in basic human activities such as exchange, innovation and sharing? The simple answer is, we don’t! Bitcoin currency as the essential unit of value and the payment network of the blockchain replaces trust in governments and banks with mathematics. Its distributed consensus network simply eliminates the need to trust anyone.

Silicon Valley tech entrepreneur and author Andreas Antonopoulos describes Bitcoin’s security model as trust by computation:

“Trust does not depend on excluding bad actors, as they cannot ‘fake’ trust. They cannot pretend to be the trusted party, as there is none. They cannot steal the central keys as there are none. They cannot pull the levers of control at the core of the system, as there is no core and no levers of control.”

Math guarantees the integrity of the system without anyone needing to trust one particular person or company. With ‘In Crypto We Trust’, what is eradicated is not human trust, but the mandated trust in a third party. Bitcoin solves the scaling problem of ‘In Each Other We Trust’. By removing the need for any central authority, cryptographic security of mathematics unlocks autonomy of trust; the ability for each person to directly and freely choose who to associate, interact or exchange with. With this, our innate capacity for trust that has been compromised by the artificial system of hierarchy can now be restored.

This new stateless currency distributes peer-to peer digital cash and enables neighborly favor at a global level that once was experienced only in a local community. The blockchain, a transparent global asset ledger keeps track of everyone’s transactions and facilitates circulation of currency as social relations.

Blockchain-based cryptocurrencies bring the source of legitimacy in the realm of finance back to individuals. Anyone can download a simple application on a computer or smart phone and by keeping their own private keys, they can start their own money system or bank. It is an open source network where each person can freely enter into relationships bound only by simple mathematical rules that set out an agreement on how to exchange value.

The unmediated flow of finance directed through networks of equal peers has the potential to dissolve the abstracted stagnation of onerous debt and foster a trend of reciprocal exchange based on our own indebtedness to one another. With this independence achieved through algorithmic regulation, we can now claim the power of consensus and create a new global civil society upon the foundation of trust in our fellows.

BTC Keychain photo DSC_0458

Nozomi Hayase

Nozomi Hayaze, Ph.D., is a writer who has been covering issues of freedom of speech, transparency, and decentralized movements. Follow her on Twitter.


  1. Colin

    While the idea of getting rid of the banksters and their debt based monetary system appeals immensely, I have some concerns with cryptocurrencies.
    1. They depend on a large communications network (the internet) which in turn depends on high tech equipment like fibre optic cable links to transmit information, and servers that hold data.
    2. We (in developed nations at least) take this information network for granted, but it has only existed at all since the 1960s, and on a worldwide scale since the turn of the 21st century.
    3. As we have seen with events like the Sony hack or the use of Stuxnet by the USA and Israel against Iran, this system is open to malicious attack – even before we think about the NSA, GCHQ and their friends.
    4. I don’t understand the mathematics behind cryptocurrencies, but I’m willing to trust it.
    What concerns me is the threat of a ‘rogue’ bank (or government) hacking into the servers, scrambling the data and so disrupting the system, at great cost to its users. Alternatively, a government or even a major ISP might ‘pull the plug’ on the internet so rendering cryptocurrency transactions impossible in their territory. Imagine if, say, the UK did that!

    1. Nozomi Hayase

      The current Western money system is right now already 80 % digital. All these transactions are going through massive complex computer systems. All the while the Bitcoin system is much simpler and more versatile. You actually don’t need the Internet with it because you can text money with a cell phone and right now you can’t do that with fiat currencies.

      You might want to watch this video where one of the leading voice in Bitcoin community Andreas Antonopoulos explains how Bitcoin now achieved a level of computing that no nation or corporation can take over or corrupt the system.

      1. Fredrik

        You think the cellphone system is free from government intervention? I don’t.

        1. Nozomi Hayase


          I brought up an example of the cell phone as a way to show how Bitcoin does not rely on the internet for it to work. It can be transmitted through short wave radio as a matter of fact.

          I am not against having governments. I think many systems of representation are useful and have a place in our society. What I am saying is that Bitcoin-like decentralized technology is showing us a way to create governance systems that can be truly held accountable by the users. The problem of centralization is seen in the current financial system and many governments as those who are supposed to simply administer a system (to represent us) begin to abuse the power that goes with it.

          Cellphone devices and the internet are simply tools and it is corporate influence/lobbying through government regulations and legislations that often control how we use those technologies. The Internet can be a tool for human emancipation or used for totalitarian aspirations. I think the story of the private letter that Rick often speaks about to illustrate the erosion of civil liberties would apply here too.

          Let’s think about our communication/interaction with others.

          1. I interact with my friend in person. In this, no one can be in the middle. I can have a private conversation with that person without worrying about someone interfacing with it or need to have a permission from someone to have a conversation with anyone I wish to talk with (except the willingness of me and the other person who is involved).

          2. Then my friend moves to another city and I no longer have direct interaction with him or her as I used to enjoy or as frequently as I wish. So now I will start looking for some other means of communications.

          3. I might write a letter and the postal service ensures the privacy of my communication. I can trust the integrity of the system, knowing that mailmen would not open the envelope and read it on the way. It takes days for a mail to be sent and received and there is an inconvenience of me needing to buy a stamp and mail it.

          4. Email provided more efficient way of communication than the postal service. Instant text messaging and skype solved the scalability issue of direct communication. Government and corporate intrusion is not a problem of the technology itself, but policies and laws (often secret, complex and camouflaged as something else like national security and copyright infringement etc) often violate our basic civil liberties.

          This applies even to postal services. If someone were to read my letter without my knowledge and there is no consequence of such action, then the system of postal service is broken and people lose trust in the integrity of the system. In the realm of electronic communications, if I sent emails from gmail and can’t trust Google’s ability to assure their user’s privacy, then people can no longer trust gmail. This is exactly what has happened and Google’s ties to the NSA has came to light after Snowden’s revelations.

          If those who are in a place to protect civil liberties are not held accountable and actually are doing the exact opposite, what can we do? We can seek for reform through political means, or innovate a better system that guarantees civil liberties. With tools like TOR and PGP, to the extent they choose to, people can guard themselves against the state interception. There is a new project called Maid Safe that is said to eliminate all central servers which create a problem of centralization in the internet. Efforts like this, if it achieves scalability, can provide a vital alternative to what has become a centralized internet.

          To me, Bitcoin does something similar in the realm of finance. It is a system that allows us to send monetary value like information. If I transact and exchange money with someone, my money does not go through the centralized channel of verifying and clearing the transaction. No one steals some amount in the process of me sending and a recipient receiving it. There are no enormous fees for the transaction and no one tells me whom I can transact with and whom I can’t.

      2. jcm

        I can’t seem to understand fully the bitcoin process, but I agree with earlier comments that it’s is still dependant/vulnerable of 3rd parties: ISPs, tech manufacturers and traders, like Mt. Gox, all of wich seem to be susceptible to manipulation. The current Western money system may already 80 % digital, but is “sponsored” by the same powers that provide the “digital” means. i don’t know for certain but i think most bitcoin users are from “western-civilized” countries, where they can use their money almost “freely”, while the very concept of this currency should mean that those with limited freedom should be the ones to seek it most (Noth Korea, maybe?). But i think that it’s all those “freedoms” already in place that allow people to use bitcoin, so regular transactions have no appeal, unless they want to be secretive (like illegal activities).
        While the idea seems good, I don’t see how it may evolve into common currency. We might as well start hoarding gold or cocoa beans. any kind of coin depends on widespread acceptance and desirability/necessity to be valuable.
        Again, I don’t think I understand bitcoin, so I look forward to finding out how I got it all wrong (I really look forward to it).

        1. Nozomi Hayase


          I can understand your perspective. Bitcoin currently has small liquidity and is susceptible to market manipulation. I see Bitcoin’s real potential is not found in its fiat valuation in currency markets, but in how in the long run it would radically change the notion of money. I touched on it in my last article that explores the roots of this innovation and the origins of money. Here is the link.

          Also, you might be interested in watching this video. Andreas Antonopoulos talks about why Bitcoin doesn’t matter so much to people in North America who already have a relatively decent payment system compared to people in other parts of the world and that Bitcoin will matter most to those underbanked and unbanked populations.

          All news about hacking and failure of exchanges that hit the news headlines are events surrounding Bitcoin and they do not reflect problems of Bitcoin. Just as Google is not the internet (although it seems to some to have become such), Coinbase, one of the largest Bitcoin exchanges is not Bitcoin itself.

          Let’s think this way.

          Bitoin ecosystem is decentralized and it is like being in a deep ocean. Once you move deeper into the Bitcoin ecosystem, all borders and restrictions crumble. Banks that are centralized are on the shore and exchanges are in between like a bridge in the ocean. Bitcoin exchanges being in this between zones are not purview of government regulations and they do not have consumer protection like the banks do. What has happened with Mt. Gox for instance was that the company was operating with fractional reserve banking and didn’t utilize Bitcoin security systems fully. The result was a bank run and claiming bankruptcy without it being bailed out.

          As for security, Bitcoin is still in its infancy. Bitcoin wallets need significant improvement before mainstream adoption. It is extremely hard to secure anything digital and innovators are working to make it more user friendly. But I see it has a tremendous potential in enhancing human relationship, specifically adding values to how we exercise the first amendment right; free speech and association right. Whether this technology lives up to its true potential or not depends on how much courage we have to imagine a new future.

        2. Jane

          I could read a book about this without finding such real-world aphpoacres!


          Hands down, Apple’s app store wins by a mile. It’s a huge selection of all sorts of apps vs a rather sad selection of a handful for Zune. Microsoft has plans, especially in the realm of games, but I’m not sure I’d want to bet on the future if this aspect is important to you. The iPod is a much better choice in that case.


          O mundo seria um lugar melhor se você e todos os judeus que acabam com esse planeta , estivessem mortos .[]ARTHUR SIONISTA respondeu:em 4 de outubro de 2010Eh o mundo seria melhor se nao houvessem imbecis como voce cristiano, ………………………morte aos mediocres[]

        5. car insurance quotes

          My dear Ilka, thank you for creating blog and making such idea to promote the unique culture of Bhutan . I really love to see your blog. You really knew which country is unique to you. Ya whoever wants to know more about the country Bhutan , please visit this blog and we Bhutanese Welcome you to pilgrim and see the unique places . Anyway thank you for your brilliantine idea. Keep it up.


          Alors d’abord, félicitations pour le jeu ! Ca te donne envie de continuer ?Ensuite, félicitation pour ta « célébrité ludique ». Hier, on a essayé en avant première le time’s up vert et parmis les célébrités et personnage, qui est-ce qu’on retrouve ? Certes DSK ou Ben Ali mais aussi Martin Vidberg !Alors, ca fait quel effet ?

  2. Nick

    The RSS feed for this site is invalid according to the RSS spec, and this causes problems for several feed readers. Here are the errors as demonstrated by the W3C feed validator:

    I think the problem is caused by a blank line on Line 1 of the feed. Line 1 should be an XML tag instead of a blank line.

    Please let me know if there is a better place to submit this bug report instead of this comment form. Also, feel free to delete this comment as it’s definitely off-topic for this article.


  3. Guy James

    I don’t see how BTC automatically takes out the risk from transactions. To use your example, if I directly transact with someone in Indonesia and I’m in the USA, I send the Bitcoins, they are then non-returnable and in the other person’s wallet. If they then don’t send the thing I think I am buying, I have zero recourse, whereas if I buy it with PayPal or credit card, I do at least have some chance of being reimbursed the money. So while it’s nice not to have to trust the corrupt and abusive centralised systems, they do serve some purpose, which apart from them being a near-monopoly, is why people still use them.

    For me two extra things are necessary to completely replace centralised systems – an automated escrow system (maybe using multisignature wallets) where the person only gets the money once I acknowledge I have received the item, and secondly a reputation system (as in eBay and many other online markets) where I can see some sort of track record for the person I am buying from. BTC plus those two additions would be much more like the trustworthy system you are talking about here, without it you are sacrificing both the positive and negative sides of the current centralised systems.

    1. Nozomi Hayase

      Hi Guy,

      Thank you for commenting! You made a valid point about risks in transaction. Bitcoin transaction does not remove risks and part of autonomy of trust and fundamental aspect of trust requires us to assess risks and manage them intelligently.

      In this article I was trying to clarify a misconception that surrounds Bitcoin, which is the idea that math eradicates the need for human trust. My point was to elucidate how our innate capacity for trust is compromised in the current system and that Bitcoin restores and allows us to really exercise this ability.

      For instance, if I were to choose to transact with you, it is my decision to choose to trust and exchange with you. In this process, I might check your reputation in many kind of ways and but ultimately I am the one who decides if I find you trustworthy for this particular transaction or not. Any relationship is accompanied by risk. For instance, when you decide to have a personal relationship with someone, you emotionally get involved and you might get hurt, but taking the risk would allow you to get close to someone and enjoy the fruits of a relationship that you might not have been able to if you didn’t take a risk!

      The current centralized payment system removes this risk from the individual and also makes transaction less personal. In this exchange, I don’t have to necessarily trust you because I can trust Visa and to reimburse money to manage possible risk and so using this third party trust comes with negative side effects as I pointed out in the article.

      With Bitcoin transaction, I have to exercise my independent capacity to trust. For instance, I need to assess the risk and trust you to pay me bitcoin for the product I offer. You have to trust me to send you the product as I promised. I see this as a trust that is the basis of all human relationship. Each person takes risk and faces the consequences of their decisions.

      In this transaction, we don’t have to trust anyone else but one another, as the integrity of the actual payment transaction is guaranteed by the math (verifying if bitcoin has not been already spent). All we need to trust in this is what each other said they would do. So Bitcoin functions as digital cash and enables a peer-to-peer exchange without needing anyone in the middle.

      As a part of this autonomy of trust, we can decide the degree of trust we want to give to each transaction, depending on the different level of risks. For instance, if I transact with my best friend with bitcoin, I would have more trust in this exchange than I would have with someone I never met who lives overseas. Also depending on the amount of money I would transact, it requires a different degree of trust and risk that comes with my decision.

      Bitcoin is a programmable money. This means I can design my own transaction on my own. Bitcoin can introduce recourse capability independent from the payment system with multisignature and escrow service (delayed time transaction) for instance. With it, I can freely choose which service I wish to use rather than the current centralized payment system like Visa that has its own arbitration system embedded (BTW charge-backs can be abused the other way too).

      Depending on who I transact with, I change the degree of trust I place and manage possible risk and as I develop more relationship with the person, I might remove that layer of risk management for future transactions. Also, with Bitcoin, if you don’t want to exercise your trust, you can easily opt out by having automated escrow service in all transactions as a default.

      In the big picture, I am exercising my capacity to trust others instead of centralized trust automatically preventing me from developing that capacity for myself! I find this aspect of Bitcoin very exciting and appreciate how Bitcoin restores our capacity of trust and make transaction based on true human social relations.

      1. Guy James

        Hi Nozomi, yes I understand that, but the reason we have services like Visa and Mastercard is that in a global economy, I basically can’t trust someone on the other side of the world as I maybe don’t speak their language, can’t communicate directly with them, and possibly don’t have time to build up a trust relationship with them. I just want what they’re selling and want to be sure I get it or at least get my money back if I don’t get it.

        So (to paraphrase you) using this third party trust comes with positive side effects (as well as negative ones). The problem is not really with the existing system itself, it’s with the way it has been abused (as in the unlawful Wikileaks blockade for example).

        However I think we should assume that centralised systems will almost always be abused eventually as a monopoly is a nice thing to have (if it’s your monopoly of course), so we need decentralised systems like BTC, but I would say that without escrow and reputation systems they are too risky to become widely used – there will be ripoffs, and many of them. Silk Road would never have become popular without its reputation system (whatever you think of that particular project, it was relatively popular).

        I am not currently aware of any decentralised market using escrow and reputation ratings, although I think Dark Wallet and Open Bazaar are in the process of developing them, and we are also going to do this with Fairmarket (part of the FairCoop project). There may be others I am unaware of.

        So it’s good for people to take responsibility for who they trust but I definitely think in a globally-scaled marketplace we need these safeguards. Once we have them and it’s all working well, we can hopefully move away from the centralised and politically conservative existing structure.

        1. Nozomi Hayase

          Yes. I think you and I have some common ground here. With Bitcoin-like decentralized currencies, we can have representation as an option. We can partake in what centralized systems can offer without it’s negative side, as people are not locked in as hostages to the system.

          As I stated in my last response, with Bitcoin, you can utilize escrow and reputation systems separate from payment system if you choose to. You can have that business oriented transaction as you describe for instance and manage risks, or as I stated in my response you can choose to have more interpersonal relationship. It is up to the individuals to decide.

          Innovation is happening at a massive scale in the Bitcoin ecosystem and I see it is so versatile that virtually whatever we need can be innovated on this unprecedented flow platform. With Bitcoin-like decentralized currencies, each individual can freely define what type of transaction they want to have with whom. The collective actions of those who participate will create each market as a result. So I see in this, the market is not something that exists outside our will and where each person needs to conform, but is emerging spontaneously and organically from the bottom up.

          I appreciate your efforts with Faircoin as I happen to hold many of the same values as what your community is striving to do. I found your initiative to be a very beautiful effort and I support that. But I think it is not for everyone and everyone should have a choice as to what is right for them and I think it is important for each person to have the freedom to decide what values they want to incorporate in their interaction and how they want to exchange. I think it is good for relationship to be not too systematized, so each person can define freely each transaction and interaction with each person.

          I see how Bitcoin allows us to do that. Bitcoin is often simply characterized as a currency for libertarians. But I see it as transcending ideologies of all sorts. Bitcoin is pure flow and an expression of free speech, that allows each person to freely express themselves and associate with others financially as they see fit.

          The reason why I love free speech is because it fosters diversity of thought and embraces differences which enrich the whole society in my opinion. I see most forces of centralization potentially squashes this diversity, so I advocate for a style of governance that I call as “representation as an option”.

          I personally like to see the values of the commons, sustainability and fair trade that your community cherishes to expand. But I hope this to happen as a result of each person’s free choice and organic democratic consensus process.

  4. Guy James

    Yes I totally agree with you about the individual choice, and I think a key component to cryptocurrencies must be a lack of coercion if they are to be truly bottom-up, and we see FairCoop as just one development in an ecology of money and ways of relating in general, without any sort of coercion, with people using it because it’s both better and fairer than the current system.

    What we have to be careful of is the assumption that BTC somehow is a new, level playing field for everyone – if it were to become really mainstream then we would of course see the existing power structures buying up all the Bitcoins and hoarding them in order to replicate the control they already have – in fact I think we are seeing this already. Also the original intention that anyone could mine their own Bitcoins on their own computer has already turned out to be false; now you need a specialised and expensive mining rig, and while I am not as concerned about this as some people, it is something to bear in mind – that existing power structures do tend to co-opt the new ones, until eventually they are indistinguishable.

    1. Nozomi Hayase

      I see how the invention of the blockchain (coincided with the introduction of principle of consensus at the wake of Occupy Movement) opened up the potential for us to move away from empire (its domination and single power) and move toward a world where many other worlds are possible. As I said in my previous comment, values that you stand for deeply resonate with me and I would like to see the Faircoin initiative inspire other communities to start building out transactional avenues that reflect their own uniqueness.

      With this said, I don’t envision my community’s values to be extended out to all of the world. I think for something to become a transnational world currency, it has to accommodate the needs and values of a majority of the people in the world, one that embodies values of the international communities (not of one nation or corporation or group of people, one political agenda and ideology), including some I am sure that I don’t necessarily agree with.

      Obviously agendas and values of the Western Europe and North America (due to the advantage of advancing the Western civilization by squashing all other civilizations) have an upper hand in this process and that’s why I find the efforts of someone like Andreas Antonopoulos for instance in speaking for “the other 6 billion” (those who are unbanked and underbanked) is so important.

      The current 1% power structure can be meaningfully challenged by the network effect of the 99% (as the empire of the old world is dying anyway). One of the tactics of those in power use is that of divide and conquer to make us fight against each other (such as with the ideology of socialism versus capitalism etc) preventing us from generating the power of consensus needed to work in our common interests.

      I see Bitcoin is a platform with the idea that innovation can break down ideological barriers and unite people from all walks of life (socialists, anarchists, communists, venture capitalists, atheists and the apolitical etc) and these breakthroughs in computer science can engage us to find common ground and together radically imagine a different future.

      Also, I don’t see Bitcoin fundamentally as money. I view it more as an extension of the First Amendment; simply an app that enables each individual to express themselves and interact and associate with one another in the realm of finance. I see potential for Bitcoin distributing the First Amendment at a global scale. Distribution of the First Amendment right on a global scale is a crucial prerequisite for creating a democratic society now that we live in a globalized world. I touched on it more in depth in this article I wrote last year that you could read if you are interested.

      I consider Faircoin as a great example of the application of the First Amendment on a local level, as each individual’s speech and association to create their own community of affinity is empowered by the fact that anyone can make their own money. It shows how any group can now create transactional platforms for the good of their community that reflects their values. But this in itself is not an app that aims to distribute the First Amendment in the realm of finance to anyone, as Faircoin is designed to express certain values such as fair trade, sustainability and cooperation etc. and it seems is only available on the terms set by people carrying those particular values.

      Bitcoin is more broad and inclusive in my opinion, as it allows me to express my financial transaction and interaction with others freely no matter what I believe or how I choose to live. I can use it for charity, to support grassroots activism and fair trade. I can use it as a token for affection to tip my friends or fund politicians and donate to organizations like WikiLeaks or buy things or pay for airplane tickets. It also allows me to build businesses or fund ideological causes that are not so popular. It allows me to associate with more large groups of people and institutions because of its network effect that creates the most inclusive infrastructure that has ever existed and is accepted by more merchants.

      To me, Bitcoin appears to be striving to enable individual freedom (we don’t know where it goes, but I support this experiment as long as I see it maintains integrity with this ideal). I cherish the principle of consensus and democratic dialogue and support for innovation as much I do for the values of commons and cooperation. That is why I support both.

      “if it were to become really mainstream then we would of course see the existing power structures buying up all the Bitcoins and hoarding them in order to replicate the control they already have – in fact I think we are seeing this already”.

      I have addressed this issue in past articles. In a decentralized system, accumulation of money will not necessarily get translated into power. You can also say the same thing about the Internet, as in its early stage, it was used by white men in Western countries and a lot of capital was invested in it, but aren’t we all using it now?

      If existing power that you call buy up all Bitcoin, then it means Bitcoin wider adoption wouldn’t happen. I only see big fiat money going into the startups around the BTC ecosphere. Also Bitcoin is decentralized and so it is extremely hard to buy up all or even most of the coins. With this said, if Bitcoin were to become a transnational currency, it will only become that through a network effect created by wider adoption. If it remains used by only a few people (beyond its early stage, let’s say 10 years from now) and clearly bent to serve for a minority, then obviously adoption will not happen! There will be a new currency that replaces Bitcoin. I am participating in this experiment because I see the protocol of algorithmic consensus has not been compromised and has shown for the last 6 years to be effective.

      I like to see Bitcoin disrupt the existing structure, while at the same time concurrently building autonomous communities through voluntary association like faircoins and other currencies. Once the first amendment is freed from the corporate proprieties, we can enable the power of consensus. Then we can democratically decide what we want to do about the issue of unequal distribution of wealth.

      “Also the original intention that anyone could mine their own Bitcoins on their own computer has already turned out to be false; now you need a specialised and expensive mining rig, and while I am not as concerned about this as some people, it is something to bear in mind”

      I am aware of your concern about the concentration of mining. Andreas addressed this in this video noting how in the BTC ecosystem, no one is held hostage and people can get in and out freely (especially more so with the invention of sidechains), this potential concentration of power will not be an issue. You can watch it here more fully.

      (at 40 min into it till 56 min)

      There is also a reason for Bitcoin having massive hashing power. It is required to secure the system from any counter party risks. In order for Bitcoin or any other currency to become viable transnational currency, it has to attain security. Nick Szabo pointed out here the role that Proof of Work played in securing the system:

      “Nakamoto improved a significant security shortcoming that my design had, namely by requiring a proof-of-work to be a node in the Byzantine-resilient peer-to-peer system to lessen the threat of an untrustworthy party controlling the majority of nodes and thus corrupting a number of important security features. Yet another feature obvious in hindsight, quite non-obvious in foresight.”

      “… existing power structures do tend to co-opt the new ones, until eventually they are indistinguishable”.

      Yes, there is a force to centralize blockchain and pressure to pull Bitcoin into many different directions. Bitcoin will not go away (there is massive investment poured into the Bitcoin ecosystem, its platform build-out and interfaces). In the end if it is not Bitcoin, it will be something else that replaces it and that’s why I think those who care about the future and developing and innovating a world without these insidious levers of power should engage, participate in the consensus process and most importantly bring out concerns and ideas, so that we all can make sure Bitcoin is not made for narrow purposes or for the few (If this happened, Bitcoin would die anyway).

      Here is a link to an interesting discussion between Andreas and Amir Taaki about Amir’s concern about Bitcoin potentially being co-opted. It is long, but worth listening to.

  5. Guy James

    Thanks for the long reply Nozomi! I wish I had time to respond as fully as you have done, but I will say a couple of things. There is clearly a tug-of-war between inclusiveness and more general ethical decisions – Bitcoin (and indeed Faircoin) is open to all – FairCoop (as opposed to the currency itself) might be seen to be exclusive as it comes from a Fair Trade, ecological mindset. We would exclude, let’s say, the Islamic State or the US government from setting up a FairCoop node! I don’t see that as a bad thing, although it could be cited as a lack of inclusiveness.

    I appreciate your description of BTC as a First Amendment app, in this way it could be seen to be the opposite of the TTIP which is seeking to centralise all that is bad about American governance rather than all that is, in theory at least, good.

    I’ll check out that interview and your other article, thanks. Amir Taaki always has some interesting thoughts on freedom (even though his video interview about FairCoop was quite frankly nonsense).

    Keep up the good work! 🙂

    1. Nozomi Hayase

      Thank you for your kind words, Guy.

      I want to clarify what I said. I don’t see FairCoop or (faircoin) as lacking inclusiveness. I see it rather embodying the uniqueness of your community and also upholding certain values that are important. I was saying if something were to become widely adopted as a transnational currency, in my opinion it has to be flexible and tolerant to widely varying differences.

      It needs to be open to an inclusive consensus process for determining which values to be upheld collectively by all users (however messy that may be).

      I never have seen Amir’s video interview on Faircoin. I will check that out!

    2. Sherlyn

      That’s a posting full of insgiht!

Comments are closed.