Bitcoin; Technology Beyond Ideology And A Call For Evolution

Six years since the invention of the blockchain, more people are beginning to see the powerful political implications that this technology brings. People from diverse backgrounds have been weighing in on its disruptive potential. While libertarians embrace the potential of cryptocurrencies to break up monopolies of the ‘too big to fail’ banking and payment companies, the rise of this technology was met with skepticism by many socialists. Activists who call for economic equality and oppose governments harsh austerity go further to say Bitcoin will become another tool for neoliberalism. So what is the disruptive force inherent in this technology? Is it tied to a specific political ideology?

Critics from the left primarily come from observations of particular events surrounding decentralized digital currency. On the surface, the trend of speculators trading Bitcoin and manipulation of exchange rates can resemble gambling, and some see Bitcoin as recapitulating the existing Wall Street casino-style derivative economy. This investment friendly image is strengthened when economists chime in to depict Bitcoin’s fixed monetary supply (a total of 21M bitcoin is created) as a currency mimicking assets like gold and criticize it as having a deflationary monetary design that would incentivize hoarding and increase wealth inequality.

Contrary to these perceptions, Bitcoin was never meant as a get-rich-quick scheme. While it possesses gold-like characteristics, it is also radically different, as it is highly portable and divisible (Bitcoin can be divided into 8 decimal points and more if consensus is reached). This is a new monetary design that has never existed before.

Competition vs. Cooperation

Bitcoin creates a currency with unprecedented flow. It melts borders and artificial barriers of ideological differences. It resists any stagnation of thought that tries to mold it to carry certain special interests. Careful examination reveals how it is an architecture that embodies innate human nature and is designed to uphold our internal governing structures.

From Socrates’ dictum of know thyself to the modern age of reason, throughout history people have tried to understand the internal laws that constitute man. Naturalist Charles Darwin, upon observation of biological phenomena, identified and defined this internal law as an evolutionary force that guides all species.

In his first work, The Origin of Species, he brought the theory of natural selection and random variation. The notion of survival of the fittest, first coined by English philosopher Herbert Spencer to describe his economic theory and later taken up by Darwin, promoted a view of man as not much more than claws and teeth. This became a prevailing ideology behind the rise of social Darwinism and was used to justify European colonialism and modern predatory capitalism that was spawned in the late 19th century.

Yet, this narrative of fierce competition for life was only half the story. Russian philosopher Peter Kropotkin wrote a response to the predominant Darwinian interpretation of natural hierarchy. In his book Mutual Aid: A Factor of Evolution, he argued for the feeling of solidarity, empathy and cooperation as the ground for human evolution.

This alternative view was held also by Darwin himself. Psychologist and system scientist David Loey in Darwin’s Lost Theory of Love debunked the narrow reductionist interpretation of Neo-Darwinians that emphasized the notion of the selfish genes. He argued how most had buried a major contribution Darwin made when he moved beyond pre-human evolution to examine man’s moral sensibilities. Loey pointed to how Darwin, in his second work The Descent of Man, had recognized that nurturing, expressed as sympathy for the weak was a primary evolutionary force that drives humans to develop higher agency with the principle of mutuality.

The seemingly unbridgeable ideological divide between socialism and capitalism can be looked at as an expression of a contradiction that existed between Darwin’s earlier and later works. It is experienced as two forces constantly battling within us. On one hand, we have a drive for individual pursuits and independence and on the other aspirations for altruism and a deeper connection with others.

In current civilization, the tendency toward personal gain and competitive drive has been overriding the principles of cooperation. What has now become apparent is that the greed of a small minority in a ‘race to the top’ has subverted a broader evolutionary force, holding people hostage in a brutal animal-like kingdom of kleptocracy. The survival of the species in modern times has turned into a game of survival of the crudest and most rapacious corporations and bankers. This has now escalated into an arms race to the bottom, creating resource wars, economic apartheid and environmental catastrophe, likely leading to planetary crisis.

Digital Scarcity

The imagination that infused the blockchain technology intervenes in the course of human evolution that has been heading down this destructive path. Decentralized consensus at the core of this innovation gives us a platform to reconcile seemingly opposing forces manifested as this ideological divide and brings a creative solution to global problems outside of electoral politics.

Bitcoin is like one big organism that regulates itself through algorithm. With no company, CEO or individuals in control, it maintains a ledger transparent to all. Its ecosystem evolves to manifest a vision encoded in its DNA, through stimulus and active interaction with its environment.

The core of this technology is algorithmic consensus that enables digital scarcity; a way to make an object in the digital world scarce without central control. This solves the problem of the double-spend. Cryptographer Adam Back, whose invention of Hashcash contributed to the creation of Bitcoin’s digital scarcity, noted how Bitcoin “constructs a computational irrevocability from proof-of-work and consensus”. This makes permissionless transaction and innovation possible, as well as removing monopolistic control of the production and transfer of money. But more fundamentally, this scarcity offers a key to open society to move beyond the current oligarchical rule of the neo-Darwinian dog-eat-dog world that has now turned into the lions eating the lambs.

The market logic that governs the existing extractive system is that of central control. As a hallmark of the industrial era, capitalism bases its foundation on the idea of land ownership. This places production and distribution into private hands. Scarcity was created through monopolistic control of resources and energy (such as the oil spigot), which has mostly been done in secrecy.

What became the ‘owner class’ began setting rules for the rest of the population through their undue influence on governments. This controlled market slowly destroyed healthy price discovery processes by manipulating currency and creating monopolies. Government giveaways in the form of corporate welfare stifles true entrepreneurship and innovation. Forces of privatization have been swallowing the commons. With scarce access to resources and jobs, people are pitted against one another, engaging in a rigged game that just keeps enriching the richest.

Unlike the managed scarcity of centrally controlled markets, Bitcoin’s digital scarcity is created through voluntary agreement of its participants. Its open source protocol grants users power to choose what kind of network they wish to create or be a part of, as codes can be modified by anyone. Combined with game theory that enforces fairness, this scarcity creates a new form of capital, one that is open source and distributed. This brings a radical departure from the current vulture capitalism that promotes cheating and wealth without work by means of usury, rent-seeking and QE (taxation through inflation).

While central banks use fiat currency as a force of coercion, Bitcoin currency is a token of value that provides an incentive to generate productivity and efficiency of the workers (miners). This pays for the labor required to build a whole new global financial system. In a sense, each Bitcoin mining pool is like a worker-owned cooperative that requires members to both work together and also compete within the network to perform the issuing of monetary units and clearing of transactions. Solidarity generated through collective hashing power maintains the ethos of decentralized consensus.

Perceived deflationary characteristics touted as Bitcoin’s flaw is actually a vital incentive structure that bootstraps the whole venture to build a new infrastructure in this time of transition from a massive teetering debt economy. This networked scarcity encourages the funding of start-ups and fueling of innovation on the edges. All around, new projects are emerging, ones that could fulfill the aspirations and needs of various communities, fostering a new network effect of altruism. Crowd-funding platforms like StartJoin and Bitcoin Capital are good examples of this.

Distributed Accountability

Bitcoin’s self-organizing is not easily understood from outside looking in. It is like a caterpillar in the cocoon before turning into a butterfly. Market manipulation and outright theft within exchanges like Mt. Gox appear to confirm the view of man as selfishly driven. Yet, this is occurring in centralized offshoots and simply a reflection of the greed rampant in the existing system.

If we dig a little deeper into this ecosystem, what is happening within the mining process also appears to affirm the theory of natural selection, where those with powerful computer chips and hashing power can increase the chance of winning the game. Indeed, mining equipment is now highly specialized and is becoming more like a kind of survival of the fittest (where ordinary computers can no longer participate in mining). This brings concern about the potential centralization of mining. Yet, just as Darwin’s first work does not complete his full picture of evolution, the mining was also designed to be subservient to the imagination that infused this innovation.

The fierce mining competition fosters efficiency, helping make the relative capacity of the Bitcoin ecosystem significantly less energy intensive than the existing financial system and the most ecological one when fully utilized at a global scale. This also helps create a solid foundation upon which a social contract of a truly democratic society can be built.

The creator of this technology, Satoshi Nakamoto found a way to secure the system from the risks of concentrated greed and destructive seeds within our ‘selfish genes’. This was done through implementing a particular consensus algorithm that enforces people to show the proof of their work. Rewards here function as a mechanism to keep everyone honest and the equilibrium of supply and demand distributes accountability as a form of self-regulation taken up by those who participate in the mining.

All this has become an engine to build a system that is impervious to internal or external attacks. The mining rings that have now achieved global level security perform a kind of safeguard of real democracy, through which spontaneous forces of We the People can be unleashed. With its feature of infinite divisibility, value created through a peer-to-peer exchange of autonomy and reciprocity can become an abundant flow that nurtures all people, especially those who are made weak and vulnerable by current Western exploitation.

This even makes it possible for the other six billion, the unbanked and under-banked, especially in the Global South to participate in the world economy on their own terms. This is already starting to happen as investment and interest in transforming the massive remittance market is increasing, while charity and tipping is the fastest growing usage of Bitcoin in the West.

Paving the Way for Altruism

Many of us wish to evolve; to act more freely and extend kindness and compassion to others, but our actions are restricted and controlled by oppressive governments, religious fundamentalism and de-facto corporate dictatorship. As commercial-led globalization expands, the entire globe is shackled to the tyrannical logic of extreme capitalism and cowboy banksters’ autocratic control over the flow of money. People with good hearts are forced to adapt to the harsh environment of austerity and rule by the rich. They have to make hard decisions; either to be kind to others or suppress that innate nature of altruism just to survive.

The blockchain removes these obstacles, allowing us to align ourselves with internal forces of evolution. The built-in incentive structure of this game-changing innovation offers humanity a path to divest from the military-industrial complex, war economies, sweat shops and debt slavery as well as Stasi-like surveillance. Instead of supporting oligarchs that print money at will to buy missiles and tanks, people can independently invest in mining gear and channel the selfish and aggressive parts of humanity to serve the larger whole.

Artificial scarcity in centrally planned economies fuels destructive competition among people, dividing all through fear into separated nations, religions and ideologies, and justifies wars and hatred. Now the competitive drive that has been cut off and stagnated can be brought back to its origin of creative power and transformed into one that encourages each to strive for their best in service to all.

With decentralized cryptocurrencies, we can move away from the deterministic future imposed by central banks and divisive political ideologues and build a society that represents who we really are. Those who are ready and want it will find a way to chart a new path. Those in power can choose not to evolve, but they can no longer take the rest of us down with them.

Humans it seems are being degraded into killer apes. As the ideals of distributed consensus enshrined in mathematics are fully developed, they become the killer apps that can help humanity redeem itself. In this new world entered through the blockchain, we can now move beyond struggles for existence and ascend as a species capable of love.

Photo credit – Silhouette of a fibreglass spinosaurus at Blackpool zoo in Lancashire, UK and a ‘con’ trail by Simon Harrod.

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.

Discussion

  1. Anon

    Notes for Nozomi Hayase in response to:

    https://falkvinge.net/2015/06/27/bitcoin-technology-beyond-ideology-and-a-call-for-evolution/

    Nozomi, I’ve enjoyed following your work. Thank you!

    Here are few items related to your article that may be of value to you or your readers.

    An important paper on how the price system carries information:

    “The Use of Knowledge in Society” by Friedrich Hayek https://en.wikipedia.org/wiki/The_Use_of_Knowledge_in_Society
    http://indiapolicy.org/debate/Notes/hayek_jstor.pdf

    Some forum comments on economics and information:

    https://www.schneier.com/blog/archives/2015/01/friday_squid_bl_463.html#c6688588
    https://www.schneier.com/blog/archives/2015/03/threats_to_info.html#c6691418
    https://www.schneier.com/blog/archives/2013/11/a_fraying_of_th.html#c2326060
    https://www.schneier.com/blog/archives/2013/11/a_fraying_of_th.html#c2334352

  2. Mind

    Wow! This article really catches many of the thoughts I have about our economy and society. It is a beautiful vision of the future and I really hope it goes that way :)

  3. 11Bills

    You hit on some key points, (e.g. the elegance of the mining incentives, the undue influence of money in politics, and our current system to solve global problems). Careful declaring that bitcoin will create a utopia, or expose the ‘pure-altruistic-human-nature’ that liberals have been awaiting for two hundred years. I agree with you that bitcoin could remove a lot of the opportunities for kleptocracy, but don’t count on a “killer app [that helps] humanity redeem itself.”

    1. Nozomi Hayase

      I didn’t mean to imply that technology can save humanity. Technology is just a tool. I believe our willingness and striving to make a better society, through mutual aid and voluntary association will get us out of the mess.

  4. That one

    Just checked bitcoin rich list. Some gots a lot, some gots a little. mainly those who can afford massive farms and exchanges have a lot.

    No sign of altruism there. So where can I find this altruism ?

    1. Nozomi Hayase

      The fastest growing usage of Bitcoin now is charity and tipping. Check out BitGive for instance, and find out what they are doing.

      http://bitgivefoundation.org/

    2. LennStar

      You can find altruism in Gridcoin 😉 coin payout is dependend on CPU power donated to BOINC projects.

      Altruism is made a lot easier with Bitcoin (and other possibilities like flatter). Part of it is from the same reason that all MMOs have their own money – people let go easier of it if they are not used to daily usage of price-sensitive buying with the currency.

  5. That one

    “Instead of supporting oligarchs that print money at will to buy missiles and tanks, people can independently invest in mining gear ”

    What? I started mining on a HD4870. It took a mere couple of years for this to be a ridiculous proposition as those with the skill or capital got themselves super mining equipment.
    (I would guess the money to invest in mining equipment came from central banks. )

    So, what is this “independent investment”, where’s the money for that going to come from, and what has that got to do with people digging coltan in steamy jungles and working in sweatshops ?

    “Artificial scarcity in centrally planned economies fuels destructive competition among people”

    I look at the world and I see people fighting not for crumbs but for fortunes. Those fighting over the Silk Road money were already well fed and living way over subsistence levels, they weren’t living in third world slums. Scarcity wasn’t a problem for them yet they were driven wild by the prospect of dazzling wealth.

    I’ve been reading this utopian stuff for the last few years and still haven’t seen the details of how bitcoin will end poverty, just vague handwaving about central banks, as if there was no poverty before central banks came along.

    1. Nozomi Hayase

      Throughout history greed and corruption always existed. Why? Because it is a part of human nature. We all have a tendency for corruption and have fallible parts. We as a society have not found a way to contain and constructively direct competitive drive and profit motives to better serve for humanity.

      I see Satoshi’s great invention was creating what I call a system of distributed accountability. Just as currency is its first application, accounting is not only about accounting transactions. It is to account for our fallible nature. Proof of work, created through Bitcoin’s digital scarcity and game theory, provides a way for each person to regulate their own self-interests (before people attack the network or cheat, they will think twice about it, because such acts do not align with economic incentives).

      Right now, under our current system, aggressive, callous and competitive drives are getting out of control. This is manifested in the never-ending resource wars, exploitative economy, drone attacks, torture and mass surveillance.

      Bitcoin’s incentive structure brings a potential for people to choose to self-regulate these unredeemed parts of ourselves. Bitcoin mining that is made always profitable when playing by the rules makes people take risk while responding and supporting the call for decentralization.

      Armed race of mining has led the Bitcoin network to achieve a global level security. In mining competition, no one dies, no human being is harmed, no violence is involved and no exploitation is involved. Competitive and aggressive parts of us are being digested through computers that do the work.

      This creates security of the system and better foundation through which a global civil society can move toward more a more democratic and humane state.

      I see a gradual reorganizing of society to already be happening and find this to be the true genius of Satoshi Nakamoto. He found a way to reconstruct society from below without force, through each individual simply moving into the direction of their liking!

      1. That One

        Thank you for the reply.

        I’m afraid I still don’t see it.

        The competitive and callous drive is very present in the crypto markets which run in the same way as any other market – profit, winners, losers.

        The resouce wars you mention are built into bitcoin at the moment because resource war is necessary for much of the electronic components of the bitcoin system.
        I have seen bitcoin based solution proposed for this.

        Nor can bitcoin solve the real cultural differences driving wars in resource rich area. Bitcoin will not resolve the Sunni-Shia antagonism,, for example, but may have a role in financing it – just as dollars do.

        Bitcoin is a brilliant technology, with many uses, but it cannot bring world peace.

        Peace sister.

        1. Nozomi Hayase

          Nowhere in my article or comments did I say Bitcoin will and could end resource wars and bring world peace as you implied in your comment. All I was saying is that proof of work offers an example of how we can systemically account for our selfish nature, within for example, mining ring (no one can cheat that particular system). I am not saying that Bitcoin is a panacea for all human fallibility. It is simply offering a choice. We didn’t have this choice before. Each person has to make their own choice.

    2. Nozomi Hayase

      I have written about this more in depth in this article, if you are interested.

      https://www.opendemocracy.net/nozomi-hayase/taming-beast-of-illegitimate-corporate-power

  6. Mohan

    Is bitcoin currency valid every where?

    1. LennStar

      some countries forbid the usage of cryptocurrency, if you mean that.

  7. That one.

    Basically what I want to see is a large flowchart depicting the future of bitcoin.

    It should include two text boxes at the beginning of the flow, one saying “poor people” and the other saying ” greedy psychos”.

    By the time we get to the end of the flow chart both boxes should have disappeared.

    And not because the “greedy psycho” box simply killed the “poor people” box to acquire it’s bitcoins.

    THEN I’ll believe the hype.

  8. Gopalan

    Well argued and well expressed. The defense of the mining gangs is a bit weak; it does not have to be defended; ASIC machines and other monsters try to corner the bitcoin / altcoin mining, but their time will also come. The invention of blockchain is a momentous event in human history; it is akin to the original introduction of money by Lydians itself. Decentralized currency that manages itself will finish the reign of central banking, fractional banking, currency based rent seeking and fiat currencies. Positive Money (www.positivemoney.org) advocates a debt-free currency creation that will only shift the handles of power from the bankers to the politicians / “independent” committee, but blockchain has already achieved it.

  9. sdfasdf

    Hmm, nah. Think you’ll find the profit motive is the basic problem.
    There was poverty before central banks, there’ll be poverty after central banks, there’ll be poverty when everything is blockchained.

    EXCEPT that making everyone use bitcoin is predicated on everyone having a computing device.

    If everyone has a computing device, and an electricity supply, and a network connection – then they are already out of poverty – bitcoin just comes after that.

    Or are people supposed to pull their smartphones out of their loincloths before making a BTC transaction ?

    The problem is in the wet stuff between people’s ears, not in software.

    I eagerly await the flow chart.

    1. Nozomi Hayase

      Yanis Varoufakis is a trained economist and it is harder for those who are trained in modern economics to understand this innovation. For instance, his quick interpretation of Bitcoin’s built in scarcity as currency being deflationary is one manifestation of this. Bitcoin’s scarcity is a vital part of its incentive structure and security of value. Combined with game theory, it enables distributed accountability, where responsibility is given to each participant and the system finds a way to self-regulate. This function is called Proof of Work and this removes any necessity for government or third party intervention. He also missed Bitcoin’s companion feature of infinite divisibility. Bitcoin, unlike gold, is highly divisible and portable and this makes it a total new monetary design that has never existed before.

  10. That One

    It reads entirley like a promise that bicoin will bring world peace.

    “This also helps create a solid foundation upon which a social contract of a truly democratic society can be built.”

    – Leads to world democracy, and peace.

    “The imagination that infused the blockchain technology intervenes in the course of human evolution that has been heading down this destructive path. Decentralized consensus at the core of this innovation gives us a platform to reconcile seemingly opposing forces manifested as this ideological divide and brings a creative solution to global problems outside of electoral politics. ”

    – in other words leads to world peace.

    ” a radical departure from the current vulture capitalism that promotes cheating and wealth without work by means of usury, rent-seeking and QE (taxation through inflation).”

    – if this doesn’t lead to world peace then what good is it ?
    – and how do you explain the vultures inhabiting the crypto exchanges that fleeced my ass ?

    “Artificial scarcity in centrally planned economies fuels destructive competition among people, dividing all through fear into separated nations, religions and ideologies, and justifies wars and hatred. Now the competitive drive that has been cut off and stagnated can be brought back to its origin of creative power and transformed into one that encourages each to strive for their best in service to all.”

    -takes away the fuel for religious and ideological war, directly implies bringing peace.

    “With its feature of infinite divisibility, value created through a peer-to-peer exchange of autonomy and reciprocity can become an abundant flow that nurtures all people, especially those who are made weak and vulnerable by current Western exploitation.”

    -in other words world peace

    1. Nozomi Hayase

      No where did I say Bitcoin = world peace. This is primarily your interpretation of my words.

      For me, there is a vital difference between democracy and world peace. Peace in any situation is never a given. It has to be chosen by each individual and society.

      If if it were to manifest, it is a result of collective will of people (democracy) wanting and designing the society that would encourage it.

      Bitcoin is a technology. It itself can’t change the society. All I was saying is that the economic incentive inherent in this technology, and game theory that enforces fairness (proof of work) incentivizes good behavior and is a good example of how we can channel our competitive drive for good.

      Also, Bitcoin exchanges are centralized reflection of the current system.

      It should never be equated with the Bitcoin system itself. When I talk about Bitcoin’s potential, I am referring to its ingenious protocol and this distinction needs to be clearly understood.

  11. That One

    A wholly reasonable interpretation, yes.

    You say bitcoin reduces middle east conflict, promotes democracy, eliminates vulture capitalism and cheating, removes artificial scarcity that justifies wars and ideological hatred.

    After all that what is left but peace ?

    I’ll break one of your paragraphs down –

    “Bitcoin is a technology. It itself can’t change the society. ”

    -OK

    “All I was saying is that the economic incentive inherent in this technology, and game theory that enforces fairness (proof of work) incentivizes good behavior and is a good example of how we can channel our competitive drive for good. ”

    -which is a change in society.

    -So you are saying that something which can’t change society will change society.

    Maybe you want a qualifier in there somewhere to say that it can’t completely change society, only change it a little bit. That qualifier isn’t obvious from your article.

    Also – if we don’t achieve world peace, that means bitcoin has a role in the conflicts of the future.

    Why not ? I can just use bitcoin to buy or print a gun and take someone else’s bitcoin.

    Peace, sister.

    1. Nozomi Hayase

      Bitcoin ushers forth a new paradigm, which is a network based on the ethos of decentralization. This is certainly a departure from the existing system that operates with the logic of central control, domination and secrecy. If people come together with the principle of consensus and transparency (for the powerful and privacy for people) and build a network, I think generally we can have a better society. One problem with the current system is that it incentivizes fraud and systematizes corruption.

      I didn’t make it clear enough in my article how I am not saying technology will solve everything, because I assumed that no one would get that extreme view out of what I was saying. But I recognize it is important to emphasize the fact that technology is simply a tool and without human will, creativity and solidarity for social justice, nothing can be done. Evolution at this point is a choice each person can make. This technology opens a door for people to more easily make that choice.

      I think this sentence below from my article captures the essence of what I was trying to say:

      “With decentralized cryptocurrencies, we can move away from the deterministic future imposed by central banks and divisive political ideologues and build a society that represents who we really are. Those who are ready and want it will find a way to chart a new path. Those in power can choose not to evolve, but they can no longer take the rest of us down with them.”

      1. That One

        OK.

        Do you expect the rich list here to start shrinking dramatically – the top 1% owners of bitcoin are doomed to lose most of their wealth after having competed to get it ?

        http://bitcoinrichlist.com/top100

        But if that concentrated wealth isn’t simply given away, that means it will be exchanged for other things of value – real estate, investments etc. – and the wealth concentration will remain in another form – just like the Rockefellers and Rothschilds own all those mansions (if BTC ever became so valuable).

        It also looks like you imply that crypto exchanges, being modelled on fiat money and stock exchanges, are a temporary phenomenon.

        1. Nozomi Hayase

          Democracy does not necessarily mean equal distribution of wealth. It means equal application of law; all people should be made equal under the law. Bitcoin does not address the problem of wealth inequality, though it likely will curtail much of the current blood sucking of the 99% by the psychopaths currently in charge. This innovation is one step toward wider social decentralization and a radical departure from the current oligarchical system, where we have what amounts to medieval level of inequality and two tiered justice system. I like to see Bitcoin first disrupt this 1% aristocratic system and then if need be, we could challenge Bitcoin inequality later on.

          Bitcoin is a Trojan horse that can subversively disrupts the basic extractive system. If you are interested, read this article I wrote illustrating how it can create a real demand for social justice and has potential to help people effectively account for the actions of those in power.

          https://www.opendemocracy.net/nozomi-hayase/taming-beast-of-illegitimate-corporate-power

          As for BTC centralized exchanges, these are problems.

          I see in the future, that one bitcoin becomes equal to one bitcoin and decentralized exchanges can become more the norm. Or you just don’t need them.

  12. That One

    I can’t see how bitcoin isn’t just going to replace money but leave the basic employer/owner-worker/renter power relationship intact.

    Some have a lot, and those who have a little will have to serve those who have a lot to get some.

    Unless there is an end to capitalism itself – but bitcoin won’t be ending capitalism (especially as it makes libertarians froth at the mouth in joy).

    Something like this optimistic picture.
    http://www.theguardian.com/books/2015/jul/17/postcapitalism-end-of-capitalism-begun

  13. That One

    I’ve been watching bitcoin since it was worth a few cents.
    I’ve seen it talked about in terms of a global and revolutionary replacement regularly. This is the expressed aim of so many of it’s proponents.

    Your headline picture shows a dinosaur watching a comet. This also implies a total wipe out and replacement.

    Max Keiser, who you appear with, calls bitcoin The Bitchrist and constantly agitates for financial revolution and replacement of the current banking system.

    Given this background it’s perfectly reasonable to assume that you mean bitcoin is to be totally transformational.

    http://www.cnbc.com/2014/12/01/bitcoin-set-to-take-over-the-financial-world-book.html
    http://www.ibtimes.co.uk/bitcoins-technology-could-bring-end-banking-we-know-it-1507301
    http://insidebitcoins.com/news/former-federal-reserve-regulator-is-afraid-bitcoin-could-destroy-central-banking/26306
    https://letstalkbitcoin.com/the-beginning-or-end-of-banking/
    https://www.cryptocoinsnews.com/will-bitcoin-end-federal-reserve-monopoly-video-thinks/

    etc etc etc
    See what I mean ?

  14. That One

    …or you could just look at Falkvinge’s own writing..

    “What’s new and government-toppling about bitcoin is that it’s a framework for starting a new economy.”

    “Many are still seeing bitcoin as just a currency, as just a transaction mechanism. Its underlying technology is far more than that. It has the ability to reduce governments to spectators rather than arbiters, the power to make wars cost-inefficient, and the power to decentralize power itself.”

    “.. the notion of a distributed economy is going to just dropkick today’s financial sector and banking as a concept. Bitcoin is going to do to banks what email did to the postal services.”

    ….government toppling….new economy….decentralise power itself…dropkick the financial sector…

    peace, sister

    1. Nozomi Hayase

      Bitcoin is revolutionary and brings real disruption to the system that no Syriza or Bernie Sanders can ever effectively create. They are still part of a totally corrupt system. This paradigm shift allows permissionless innovation of finance and enables a platform where truly peer-to-peer social contracts can be made. This provides a model for anyone to make social change without appealing to or depending on any central authority.

      Andreas Antonopoulous describes the potential of this technology in this context. You might want to watch this interview.

      https://www.youtube.com/watch?v=rdqcLdo8-iI&app=desktop

  15. That One

    Sooo, in a world where every action is transparent on a ledger, doesn’t this mean absolute conformity to the rule of whoever has power ?

    What about when the democratic majority are just plain wrong, yet want to enforce their way, and they have the blockchain as an enforcement tool ?

    This sounds like the death of political dissent.

    I don’t see how it is a radical departure from oligarchy, as the open and accountable block chain ledgers show very unequal wealth distribution.
    All the equipment for bitcoin is based on old fashioned industrial power relationships and corporate structures.
    I don’t see anyone addressing that.
    I don’t see anyone saying that their efforts to free people depend on someone signing up to work for a corporation in which they have no vote, or how power works all along the supply chain from raw materials to finished product.
    How will block chain affect worker rights, and exploitation of raw materials acquisition for it’s own equipment ?
    Can block chain technology ensure a fair trade mining rig ?
    Can it ensure that people don’t have to ignore their children because they work 12 hour shifts, or that 10 year old kids are sent to school rather than work in a mine.
    When will it make all these things transparent ?

    Nor do I see anyone stating clearly how this will not be necessary in the future when everything is on block chain, except the singularitarians who promise us waves of mass unemployment as automation becomes more prevalent.

    Doesn’t the fractal maths of complex systems theory show that this is just another iteration of a basic underlying structure ?

    1. Nozomi Hayase

      Bitcoin’s core invention of distributed trust enables a platform for a decentralized consensus at a large scale. It is easy to focus too much on the currency aspect. As I said before, democracy is not equivalent to world peace. It is not equivalent to social justice or economic equality. It is simply a platform that allows us to work together to try and build consensus. If we want world peace, we need to choose that and strive for it within a true cooperation rather than the current form of co-optation by third parties. If one wants justice, one needs to work to build a system that is inclusive and not exploitative.

      Whether we like it or not, the world is moving into digital money. The question is whether it will be decentralized or centralized.

      Libertarians are excited about the disruptive force of this technology as it tends to take power away from centralized authorities. I wrote this article with a hope that it would help socialists to also recognize how this is a technology belonging to all humanity, bringing potential for a new commons and transcending political ideology.

      Why don’t we move into this ecosystem and participate in a consensus making process and stand up for values of commons, economic equality and sustainability? Bitcoin’s consensus can serve all of us and it should not just left it to libertarians and coders.

      Blockchain is a ledger and it can be used to register land and assets and all forms of contracts. Why don’t we use this technology to expand the public domain and register land and public assets that should be reserved for the commons?

      As an invention of the digital era, Bitcoin moves us further away from the industrial era. BTC mining operates through economic incentive structures, where those who achieve the most efficient use of energy will reduce the cost and can stay in competition. Inefficient computers and power sources will be forced out of the market.

      This is a good example of real competition (note this is not human competition, but computers are doing the work and competition). It has a potential to shift energy sources into more sustainable methods (Btw, Bitcoin is the most eco-friendly currency per transaction that exists in the world relative to the overall power uses of the current 1950’s technology of banks and VISA like ledger systems).

      The cost of electricity gets cheapest with renewable energy like solar power. So this will likely in the end lead to the adoption of a compete renewable energy. We can expand our imagination to work with entrepreneurs like Elon Musk to build a solar BTC mining rigs with electric power for vehicles and can completely transform a society. Musk’s new extremely cheap and compact battery systems makes all this possible. He is one billionaire that shows Innovation can change the world! (Rare bird, I’d say as most of the rest are basically extractive financial terrorists)

      I addressed this element in this article, if you are interested:

      https://falkvinge.net/2015/01/06/understanding-bitcoin-and-its-disruption-through-its-roots/

      “The invention of Bitcoin coincides with peak oil and the beginning of the end of industrial civilization. Blockchain distributed consensus can challenge the elite corporate and crony consensus that is backed by lobbyists and war financiers of oil and nuclear industries, who are currently dictating energy and monetary policy around the world. Bitcoin as a technology of the information age can help decentralize energy by harnessing the power of globally spread supercomputers that are the heart of Bitcoin network with the abundant sun through naturally decentralized solar power. Bits of sunshine rays can redeem abstract digital numbers, restoring our intrinsic connection to nature”.

      Here is another article that addresses the concern of unequal wealth distribution. Read comments also.

      https://falkvinge.net/2014/11/10/bitcoin-the-beginning-of-open-source-governance/

    2. Nozomi Hayase

      As for the enforcement you mentioned, entry into Bitcoin network is voluntary, unlike debt-based monetary systems like the U.S. dollar, which as economist Paul Krugman described is “backed by men with guns”. Bitcoin adoption occurs when users out of themselves recognize its utility and choose to participate in the network.

  16. That One

    Sooo, in a world where every action is transparent on a ledger, doesn’t this mean absolute conformity to the rule of whoever has power ?

    What about when the democratic majority are just plain wrong, yet want to enforce their way, and they have the blockchain as an enforcement tool ?

    This sounds like the death of political dissent.

    I don’t see how it is a radical departure from oligarchy, as the open and accountable block chain ledgers show very unequal wealth distribution.
    All the equipment for bitcoin is based on old fashioned industrial power relationships and corporate structures.
    I don’t see anyone addressing that.
    I don’t see anyone saying that their efforts to free people depend on someone signing up to work for a corporation in which they have no vote, or how power works all along the supply chain from raw materials to finished product.
    How will block chain affect worker rights, and exploitation of raw materials acquisition for it’s own equipment ?
    Can block chain technology ensure a fair trade mining rig ?
    Can it ensure that people don’t have to ignore their children because they work 12 hour shifts, or that 10 year old kids are sent to school rather than work in a mine.
    When will it make all these things transparent ?

    Nor do I see anyone stating clearly how this will not be necessary in the future when everything is on block chain, except the singularitarians who promise us waves of mass unemployment as automation becomes more prevalent.

    Doesn’t the fractal maths of complex systems theory show that this is just another iteration of a basic underlying structure ?

    In other words, can it fix this –

    http://sitemaker.umich.edu/section002group3/introduction__two_paradigms

    – rather than depend on it or make it worse ?

  17. That One

    If bitcoin replaces fiat money then there won’t be any choice to not use it – unless you are a self sufficient farmer, or run your entire life on theft or barter.

    Krugman really put his finger on it something.

    Buuuut, a Honduran style block-chain land rights system may cut down the cheating – but the system is still backed by men with guns and is government enforced.

    Still, an unforgeable ledger for land may be an improvement for Honduras and such cases, maybe.
    Though, of course, if you run a mega coin mine you can buy up a chunk of Honduran land, set yourself up as a land owning elite, and nobody will be able to take it off you.

  18. F_F
  19. Kumbaya

    It can’t be bitcoin that is destined to bring about world peace because that job is already taken by Jesus, meditation, LSD, Allah, aliens, communism, the Mayan Prophesies, the UN, environmentalism, alternative news, DNA frequency raising, etc etc etc…

    Bitcoin and banking reform need to get in line and wait their turn.

  20. sdfasdf

    OK, so when you build up your GPU mining rig, or your ASIC mine, you’ll notice that some of the components have gold on them. The more you buy, the more gold you take off the market, the more has to be mined.

    However some people may replace their gold holdings with bitcoin.

    Does bitcoin increase or decrease the pressure to mine gold and other resources ?

    “The high price of gold in recent years has also attracted thousands of small-scale miners into fragile ecosystems. Yanomami Indians in northern Brazil and Venezuela whose populations were devastated in the 1980s by illegal goldmining face new invasions of gold miners, says tribal leader Davi Yanomami. “History is repeating itself,” he said on a visit to London last year. “Twenty years ago many thousands of gold miners flooded into Yanomami land and one in five of us died from the diseases and violence they brought. We were in danger of being exterminated then, but people in Europe persuaded the Brazilian government to act and they were removed.

    “But now 3,000 more miners and ranchers have come back. More are coming. They are bringing in guns, rafts, machines, and destroying and polluting rivers. People are being killed. They are opening up and expanding old airstrips. They are flooding into Yanomami land.” More than 100,000 small-scale gold miners using rudimentary methods to extract gold from hillsides and rivers are thought to be active in Peru. In many cases they are competing with mega-mines which employ far fewer people.”

    http://www.theguardian.com/global-development/2015/aug/15/developing-countries-high-price-global-mineral-boom

  21. Reader33

    I can see Bitcoin being freeing as you describe, Yet I can also see it being used nefariously. For example, computer security being what it is (very poor), you can be denied access to the system or robbed. The agencies most able to conduct this theft/manipulation are the old centralized ones. So by moving to a virtual currency that is based on a weakly built technological system, your ‘real life’ becomes as vulnerable as that system. What happens when you try to buy food and the computer says denied? Specific undesirables can be excluded from the system due to its technological weaknesses, just as happens with centralized money, yet perhaps to a more total degree.

    Also, I think the artificial scarcity of Bitcoin is not as valuable at creating peace as you imagine. There is already a natural scarcity based on physical resources. This planet can give just so much, and that is what monetary scarcity should be tied to.

    If you accurately assess various dimensions of resources – what is available globally as well as what should be conserved and not used/destroyed – then you know how much material wealth humanity has. Accurate accessment is important here – base it on reality. Then share it – create a functional, open, participatory resource distribution control system.

    From that you know about how much ‘money’ you have, who is spending most of it, where it’s flowing on the planet, then you just need a currency system that allows those resources to be distributed in a more balanced way. Currently, corporations are squandering huge amounts of real resources, based on their holding unlimited pretend money.

    Physical resources and basics like food, shelter/land, basic health care, should use one currency only relating to that physical resource-based reality (and in my opinion it should be given freely as a liveable basic income). Then we can see clearly where this planet’s resources are being squandered and by whom, and we can aim to share fairly (thus ending most conflict).

    As for all the rest that humans imagine life is about, such as intellectual property, information, censorship, art, geography, religion… if people want to assign a virtual currency for trading such ‘things’, they can do that. But it need not involve governments or laws, as none of it is real.

    It comes down to a game of control, primarily of the mind (culture, society, beliefs). To get this control, the flow of information is being inhibited and slowed, largely through money, ownership, and legal concepts that should never have been applied to information at all.

    Information is free. That’s why Bitcoin is freer by nature: it’s based on information only. There is nothing of substance to attack (except the underlying mechanism, such as servers, PCs, networks).

    Even so, Bitcoin is basically based on hiding a treasure to create scarcity (crypto hides an answer using math, so nobody can spend it unless they know where the answer is). But if somebody can find that (eg crack it), they find what was hidden. So long scarcity. So while it may be harder to find/steal than gold, there are other ways it can be stolen and manipulated.

    Overall though, I think the visibility model that Bitcoin promotes is what is needed. Transparency has always been very good for creating fairness and good social growth. That’s really what’s needed, regardless of how it’s accomplished. Shine some light into that corruption, assess where resources are actually flowing. Follow the money.

    But in the end, a lot of it comes down to simple physical force – people using violence to seize physical resources (war, police, etc). Such people will always seem to have all the money (because they print it as a way of legitimizing their physical theft, and as a way of commanding a workforce to do their further bidding – “work for me or starve”).

    Yet bringing this use of physical force to light and telling the truth about it, which is especially happening more now, is valuable at changing who is able to command such force. It all comes down to who supports what. Again, inhibiting the flow of information – which is much of what intellectual ownership and censorship does – only slows this positive change. It creates artificial information scarcity (ignorance).

    If you would be free, set all information free (ALL speech, writing, data – this is all just information), and share money freely (especially physical resources), without condition or requirement, but with limitation based on real scarcity/availability.

  22. Gold rings

    I enjoy what you guys are up too. This sort of clever work and exposure!

    Keep up the awesome works guys I’ve added you guys to blogroll.

  23. Marcus Cake

    I thought I’d introduce Wisdom Networks as a complementary technology and then provide some impetus for the call for an evolution with a specific Network Society vision, purpose and plan to build the ‘Global Village’ in 2 years

    ZERO MARGINAL COST NETWORKS
    Blockchain and Wisdom Networks are very different, but do the same thing. They manage things in society. The blockchain is a means to manage distributed, non-repudiable transactions and crowd creates the resulting register of ‘things’. Blockchain manages flows and stocks. The wisdom network focuses organises ‘things’ (data, information, community, collaboration, knowledge, wisdom) to reveal wisdom and focus the wisdom of crowds on outcomes.

    Block Chain and Wisdom Networks are complemetary. Wisdom Networks add value to things in blockchain by organising wisdom around every ‘thing’. The Blockchain provides a source of ‘things’ to link to and organise.

    Zero Marginal Cost Networks (internet, blockchain, wisdom networks etc) displace millions of ‘Industrial Economy’ fragmented technologies and hierarchies that manage ‘things’ by organisation, sector or country across the world at zero cost and with global reach. For example, one ‘Equity Market’ block chain could crowd create transactions and registers for securities transactions worldwide. One Equity Market Wisdom network could manage the global equity market. One Blockchain could manage land titles globally. Blockchain is another type of global, horizontal Zero Marginal Cost network that manages ‘things’ globally.

    Each sector may consist of 50 things. Each country may consist of a few hundred things. Some of these things will be managed by Blockchain technology at either a global country level. The use of Blockchain depends on each ‘thing’. Land and securities need Blockchain. Holes in the road ‘things’ that need to be fixed do not.

    Blockchain and Wisdom Networks are part of the inevitable evolutionary ‘More with less’ evolution that means less adminstrative and people are required within the services sector. Like previous Industrial Revolutions, the Third Industrial Revolution will result in a jump in productivity and significant decline in employment to achieve the same outcomes.

    For an overview of a society crowd created with Zero Marginal Cost Networks, please see Greek Wisdom at http://www.wisdomnetworks.im/greece (1 of 20 countries)

    CALL TO ACTION – LET’S BUILD A GLOBAL VILLAGE IN 2 YEARS – 1 PAGE PLAN
    Let’s build a ‘Global Village’ with less than 50 networks (each network managed by less than 30 people). The mesh of networks empowers 7.3bn to organise, participate and contribute across countries, sectors and institutions around the world. Our ’One page plan restores transition, evolution, wisdom, prosperity and peace’! We all have a role to play in a country, sector or institution to drive ‘Punctuated Reform‘ and the transition to a Global Village in 2 years!

    http://www.wisdomnetworks.im/achieving-prosperity/reform

  24. Rick Falkvinge

    testing a random comment

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