Bitcoin and the Tip of the Iceberg
Most articles on cryptocurrencies refer to mysterious miners, crooks and criminals, and their building of fortunes. I’d like to skip these technical and folkloristic details — however intriguing they might be for those who can’t help sticking their noses into morbid curiosities — and try to propose a wider perspective to contextualize the cryptocurrency phenomenon.
Information Technology radically changed our society in the last twenty years. So the Bitcoin phenomenon can be properly understood only within the wider context of digitization.
It is the tip of the iceberg in a new scenario where very few corporations control key services such as: telecommunications, logistics, retail distribution, citizen identification and profiling (once known as classified filing), cartography and geolocation of every activity in the state.
A new form of deterritorialized citizenship has quickly established itself on a global scale in parallel with old analog state bureaucracies. The old bureaucracies are slow, inefficient and clearly inadequate to the task of managing an increasingly accelerated society.
People are easily frightened by change, and our fear is fuelled by the notion that too much power may be granted to these private enterprises. Governments claim to defend our privacy with byzantine regulations in an almost ludicrous way — as when they introduced annoying cookie consent notices.
We tend to forget, however, that governments are the first to violate our privacy. They have access to our bank accounts, monitor and keep files on us. They want their citizens to be subdued taxpayers, while companies simply want potential clients to buy products and services.
Nevertheless many fear that nation states — giants with clay feet who should protect us from oppression and abuse — may crumble as a result of this technological upheaval. It is primarily in rich countries where people are scared; where economic certainties of the past cannot be taken for granted any longer.
We tend to forget that our prosperity was achieved by a partition of wealth generated by capitalism and colonialism. Thanks to unique historical circumstances produced by the Cold War between Russia and America, wealth was redistributed more equitably than usual. Similar to what happened during the French Revolution, the same privileges are now being invoked by the world’s poorest who threaten the borders of this new version of the old Versailles, called Europe.
Europe also is where old bureaucracies are trying to create a transnational political power that hopefully can represent a model for a globalised world — a planetary government against potential future wars caused by global warming, or food and demographic crises. Europe currently is witnessing the loss of power and monetary sovereignty by old nation states.
We can understand the role played by Bitcoin, a private digital currency that is not controlled by any government, only by taking into account these developments. Instead of reducing our discussion to digital gossip and curiosity for a new technology, why don’t we start treating Bitcoin as a crucial piece of the puzzle whose solution could provide a guide for political and social opportunities of globalised humanity?
The first block of the Blockchain (the transaction database of the Bitcoin protocol) contained the following message:
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”
On 3 September, 2009 the London Times ran a cover story on the instability of the fractional reserve banking system. Whoever may be hiding behind the pseudonym Satoshi Nakamoto, by quoting the title of that specific cover story, probably had a twofold purpose: to demonstrate that the Blockchain was not created prior to the article’s release date, and to express worry over a self-proclaimed capitalist system that was caving in to a bank bailout.
This in itself is a precious detail in the interpretation of something that cannot be deduced in simple technological terms. To highlight the inventors’ intention we should emphasize two further elements underpinning its functioning: distributed consensus and social scalability, both leading to a real change of paradigm (a topic that deserves a separate article).
It goes without saying that the myth of a Nation State is fading away. A new world government is waiting (without much hope) for its founding fathers. Some enormously large corporations are colonizing the new digital space basically unfettered. Will they soon invent a new mythology to justify and legitimize their power? Can we define technological progress as a myth in itself? Do we trust its invulnerability?
Meanwhile, a few intrepid libertarian heroes opposed to centralized power have discovered something in the digital sphere that is scarce and is not duplicable — the exact equivalent of gold, which in the physical domain gave rise to all historical monetary systems. In the face of a malfunctioning political system and an all-too-slow bureaucracy that is clumsily steering its Titanic against the iceberg of digitization, a group of libertarians specializing in cryptography are providing hope. Will Bitcoin preserve some of our individual freedom against old and new centralized powers that are vying for global supremacy?
