Derrida, Bitcoin, & the Play of Value (or Cryptocurrency as the Deconstruction of Money)
The reigning economic system relies on the assumption of its own naturalness to deflect any possible critique. “This is just the way things are,” we’re led to believe, so there’s nothing to bed done. But the fact is our economy—its money and financial protocols—is a material, human-designed system. The advent of Bitcoin and cryptocurrency deconstructs this presumed naturalness by introducing new monies with different protocols, showing that all money is designed. Because, alas, there is no such thing as “real” money: value, like meaning, is infinitely deferred.
REGIMES OF TRUTH (OR NON-JURIDICAL COERCION)
It’s hard to critique something that is deemed natural. After all, if it’s natural then there’s nothing to be done about it. It just is—pure, true, unassailable.
And yet, as Nietzsche argues, to claim something is natural or true is an act, hegemonic at that, within a culture— namely, it’s a strategy to protect certain interests and, for Nietzsche, usually to prevent facing the actual truths of the merciless indifference and flux of nature. Things that are deemed natural remain outside the realm of discussion — and hence beyond critique—and so maintain their position of power.
Through his analyses of madness, medical institutions, prisons, and sexuality, the French historian and theorist, Michel Foucault, explores how truth claims have functioned as a way for societal institutions to organize and control thinking, language, and our very bodies.
“Truth ,” Foucault writes, “is to be understood as a system of ordered procedures for the production, regulation, distribution, circulation and operation of statements. ‘Truth’ is linked in a circular relation with systems of power which produce and sustain it, and to effects of power which it induces and which extend it. A ‘regime’ of truth.”
A regime of truth, which delineates what Foucault calls a “discourse,” defines the valence of what can be said in a given society—permitting certain things, prohibiting other, deeming some utterances as insane, absurd, criminal. This is not a juridical restriction on “freedom of speech”; there are no explicit decrees. “[O]ur society,” Foucault writes, “possesses yet another principle of exclusion; not another prohibition, but a division and a rejection. I have in mind the opposition: reason and folly.”
For example, I say: “the affect or mood of things is constitutive of things, not a ‘subjective’ effect.” From the perspective of “science” —one of the more dominant and coercive institutions—I’m either “insane” or a “poet.” In any case, in this science dominated discourse, I cannot be making a claim to knowledge. My claims and my place in this society may find expression—but as poetry, not as science. (Of course, 2000 years ago this distinction between poetry and science did not exist. But after the Enlightenment, the roles of poets, artist, and affect were recast as ornament—nice, perhaps, but not essential and certainly not having any claims to knowledge per se.)
This discursive form of control is much more insidious than state issued law. Discourse and its regime of truth are an invisible yet pervasive coercion of what can be said—and even thought. Just think about if the things you believe were considered “insane” by your society. As the world around you dismissed or even jailed or hospitalized you, you’d be screaming your head off: “I’m not insane! Listen to me!” Terry Gilliam’s 12 Monkeys did a fantastic job of showing the power of discourse, how one person speaking a truth can be considered insane, his claims dismissed, his body jailed.
Money, which always implies a system of institutions and mechanisms that assign and distribute value while delineating the very terms of transaction, is often cloaked in the garb of the natural. The moment someone starts talking about the Fed, about taxation as theft, about inflation as taxation, that person is considered fringe—a “conspiracy theorist,” which is today’s most common weapon used by mainstream politics to discredit critiques of the underlying political and economic structures (admittedly, many theories dubbed “conspiracy” theories are absurd—but so is the unquestioned faith in taxation, the Federal Reserve, and voting).
Just look at the state of the world and its political discourse: over nine million people die of starvation every year; wealth disparity has become downright obscene; nearly two billion people around the world are unbanked, locked out of basic finance because they lack the “proper” form of identification — two billion people! — and yet no one really questions this because, well, that’s just the way money is. They decry it, no doubt. Bemoan it. Tweet about it. Send money to this or that non-profit. But take aim at the very institutions and mechanisms that promote these outcomes? Nope, doesn’t even seem like an option because money be money, after all. All we can do, the story goes, is try to hedge its worst tendencies.
Now, I’m being a bit reductive. Of course people question our economy. But the very terms of their questioning tend to remain embroiled within the logic of the system they seek to reform. For instance, we can tax the rich and give it to the poor. That might help some people, for sure. But taxation relies on a foundational logic and mechanism of the very system we hope to reform: zero-sum extraction, in which the state extracts from one party to give to another. (And, yes, in case you’re wondering, there are alternative economic models premised on abundance rather than scarcity; that are are regenerative rather than extractive.)
ECONOMIES ARE NOT NATURAL. THEY’RE DESIGNED.
The fact is our economy and its money are a specific —and, more importantly, material—set of institutions, laws, regulations, and mechanisms all working in conjunction to produce precisely the outcomes we see all around us. From the Federal Reserve, central banks, and reserve requirements, to the SEC’s “consumer protections,” KYC/AML, and credit cards, our economy is an engine sustained by institutions, legislation, and technologies.
Sure, there are certain human behaviors at play—greed, desire, the will to power (as well as the will to peace, compassion, and love which are often overlooked). But the job of an economic (and political) system is to incentivize the best behaviors and disincentivize the worst. Just because most people may be greedy doesn’t mean we need to create an economy that encourages, promotes, and rewards said greed.
For example, corporations aren’t “natural.”
For example, despite their ubiquity and power, corporations are not in fact natural. They’re an invention originally created by states which issued charters to private parties, usually to facilitate large scale civic projects such as building a national railroad. Only later did corporations become something you could simply register for and pay the corresponding taxes to the state (it’s worth noting that corporations are not part of a “free market” but are issued by the government).
Corporations, of course, allow a group of people to act as single legal entity, making capital accumulation more efficient while diverting liability—the corporation is responsible, not individuals. Which may not, alas, be in the best interests of a society. There are better ways of letting people act together such as a DAO–a decentralized autonomous organization—which is a kind of digital co-op in which employees and users are owners.
Neither is having to show state-issued ID to send your own money
Or take the now ubiquitous KYC/AML protocols—Know Your Customer/Anti-Money Laundering—which require state-issued proof of identity in order to bank. Which means only people with certain ID have access to basic finance. This means billions—yes, billions—of people are locked out of the global economy, what are called the unbanked. When you’re prohibited from using a bank, you’re forced to rely on “alternative” financial services just to cash a check, send money, or get a loan—all of which extract a sizable fee from you.
KYC, you have to admit, is a bit odd. Isn’t it your money? I understand a bank wanting to vet you before giving you a loan. But why do they need your ID to open an account and give them your money so they can, in turn, make money on it? Shouldn’t they be bending over backwards to get your money? Why do you need to prove who you are with certain state issued ID just to send what is supposedly your money to someone else?
Sure, trust between parties is an essential aspect of financial transactions. But KYC is not the only way to establish trust. Bitcoin was in fact invented to remove the need for extractive and inefficient third parties while maintaining trust through a trustless cryptographic protocol:
“What is needed,” Satoshi writes in the Bitcoin white paper, “is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.”
KYC is a relatively new protocol, introduced post-9/11 as part of the Patriot Act. Today, most people may consider it normal that, to use Venmo or PayPal, they have to upload ID. But that’s a recent phenomenon that’s had disastrous effects, fomenting extreme poverty worldwide while interfering with the our freedom to transact. It’s poor design — if you want your economy to be inclusive of everyone. But it’s great design if your intention is to exclude a major portion of the world from basic finance and keep them trapped in extreme poverty —while spying on and controlling hundreds of millions, if not billions, of people.
KYC functions as exhaustive surveillance in which the government reserves the right to stop transactions it doesn’t approve of (see the Canadian government’s response to the trucker protest). The freedom to transact underscores and makes possible all the other freedoms we claim to love so much—freedom of speech, of assembly, of religion. Know what all those freedoms rely on? Money. If the state can decide what kinds of transactions are ok, they control all our other “freedoms.” This is all to say that KYC is not natural: it’s a designed feature meant to produce certain outcomes—in this case, exclusion, surveillance, and control.
The Ideological Control Implicit in Economic Markers
Our reliance on criteria of economic “health,” such as the GDP, promotes the outcomes we see all around us—which is weird as there are other ways to assess economic health. Think of Bhutan’s “happiness index.”
Meanwhile, our economy relies on markers of “health” that work to promote and confirm the outcomes of this system. One clear example is our reliance on the GDP (gross domestic product). GDP is the sum of all the money generated in a given time period and geography. For instance, if Amazon generates 10 trillion dollars but it all goes to Jeff Bezos, then our GDP would be higher and we’d say our economy is “healthy.” Which, frankly, is insane.
Why don’t the Fed and our national economists use, say, the Gini coefficient to assess the health of our economy? That is, rather than just look at the gross sum, why don’t we look at how that wealth has been distributed among its participants? The answer seems obvious: because that would undermine a system that seeks to perpetuate wealth accumulation by the few, not work to distribute that wealth more equitably.
I could go on and on listing features of our economy that are designed to create precisely the outcomes we see around us —obscene debt, massive wealth discrepancy, homelessness, war, a prioritization of fossil fuels to maintain the petrodollar. Or the US dollar’s inflation model—which is at the whim of a few unelected officials who decide when to “print” more money or not—and can, as they’ve done recently, print so much new money that inflation skyrockets, a form of taxation as it renders the money we have less valuable. Or the distribution of this inflation: the Fed could “print” more dollars and distribute them to every resident rather than giving them to the central banks. And on and on and on the list goes: our system is designed to create certain effects. Which means, if we don’t like the effects, we can design new economic systems with new money.
ENTER BITCOIN, JACQUES DERRIDA, & THE INFINITE PLAY OF VALUE
Throughout his early writing, Jacques Derrida —the French philosopher who popularized the term deconstruction—would closely read texts which relied on some notion of the pure, natural, or true (such as Rousseau’s “state of nature” or Claude Levi-Strauss’ distinction between the raw—pure and natural— and the cooked). For Derrida, any concept of the natural inevitably bleeds into the “unnatural” (for example, is sushi raw or cooked?). His point? There is no pure nature, pure meaning, pure anything. As he famously wrote, “there is no outside-text” (il n’y a pas de hors-texte): there is nothing outside the play of life, nothing untouched by other things, nothing that is not always already enmeshed in a play of factors.
Bitcoin functions as a deconstruction of money’s claims to being natural and just the way things are. By creating a new money with its own protocols—its own inflation and distribution model; its own way of eliminating the double-spend problem; its own mode of accounting; its own way of storing, sending, and receiving money—Satoshi indirectly revealed the unnaturalness of the legacy financial system. Suddenly, here was new money—which meant that the old money will never have been natural.
But Satoshi didn’t just create a new money. They created a protocol whereby anyone anywhere could create a new money with its own rule set, its own incentives, its own inflation and distribution model. For instance, every cryptocurrency has different inflation rates, that is, how many new units are introduced at what rate. Unlike the US dollar, we always know how many bitcoin are in the world as well as how many there will ever be (21 million) while we only have a vague idea of how many dollars are in circulation and certainly have no idea how many there will be. Rather than that lack of certainty being natural, Satoshi shows that it’s a design feature of most fiat (state-issued) currencies.
Why is this important? Because it reveals that economic factors such as inflation and distribution are not inevitable. The US inflation and distribution models were designed and implemented by people and remain buttressed by institutions, laws, and regulations. What Satoshi and the technology of distributed systems introduce is the fundamental plasticity of economic systems and their units of currency. Money and its institutions are not outside-text; they are things we write—and can rewrite to infinity.
Value Is Not Absolute. It Emerges.
One common critique of cryptocurrency is that it isn’t real —whatever that means—as it isn’t “based on anything.” Well, first of all, money isn’t grounded, absolute, fixed — not even when backed by gold. After all, gold has no intrinsic value. It’s just metal we’ve decided has value. Gold, like the money it supposedly grounds, is traded in markets, meaning its price can go up or down or even bottom out. So even with a gold standard — or any standard— the value of money is not guaranteed.
Such is the way of all things, says Derrida, who argues that everything is intertextual, fundamentally wound up with other things in an endless act of referral. For example, you look up a word in the dictionary. To understand that word you have to understand the other words used in the definition. So you look them up. But in order to understand those words, you need to look up those definitions…and on and on it goes to infinity, a functioning of what Derrida calls différance — the infinite deferral and differentiation of meaning.
For Derrida, then, there’s no such thing as absolute meaning. The meaning of a word only exists in as much as it’s used. Every time a word is written or uttered, the meaning is inflected. Most of the time, this inflection is minor. But as anyone with teenage children knows, sometimes this inflection is considerable. My 18 year old son, for example, uses literal, awkward, and hard in ways different from me—and from legacy dictionaries (though dictionaries have been trying to update more frequently).
So it is with the value of money. Value is driven by markets, that is, by the play between people, events (weather, war, elections), and forces (the scarcity of gold, the cost of oil extraction, desire). Value is not something we pass back and forth to each other as if it were a discrete, fixed thing unto itself.
Value only lives in between—in between what I’m willing to pay and you’re willing to sell and all the forces that help determine these wills. This play of value never comes to an end. Rather, it is precisely in, through, and as this play that value has any, well, value.
It’s important to understand, however, that just because words are intertextual doesn’t mean there’s no meaning or that all words mean the same thing. Meaning may not be fixed but it is particular, a constant differentiation emerging from the distinctive network of that word—the intertextual trajectory of pixel is different from that of acrobat. There is a particularity of meaning but that particularity is not inherent, absolute, or discrete.
And so it is with money. Value is never absolute, fixed, or guaranteed but is always already in play, in circulation, a product of various forces from human desire to legislation to the way of the earth itself such as the limited supply of certain minerals key to industry. If you try to put your finger on value, it’s like trying to put your finger on meaning in a dictionary: you’ll be flipping pages ad infinitum. And yet we still transact; value still exists. It’s just not an absolute. It is shaped by the institutions, protocols, and discourses of a given society.
If anything, Bitcoin is more “real” than the US dollar.
Bitcoin is in fact more tethered to the real, whatever that is, than the US dollar. Unlike dollars which only have value by the power of state fiat—that is, because the state says so—bitcoin has value due to an intersection of forces: a limited supply that is fixed (no single person can decide to change that), a locking up of energy expenditure that secures the network from bad actors, and the efficiency of peer-to-peer payments that removes slow, greedy intermediaries. Which is just to say that all money has value that is fundamentally plastic—and if you really wanted money that was more “based on something,” bitcoin’s immutable, trustless, and transparent protocol is the obvious choice over fiat’s shadowy capriciousness.
THE PLASTICITY OF MONEY IS LIBERATING
Rather than seeing this plasticity of money as a problem that needs to be fixed, I want to suggest it’s something to embrace. This lack of fixity opens up the possibility of new economic—and political—systems. Which means we’re no longer stuck with a financial system that doesn’t serve our interests. We can assign value to things we actually value. We can, in fact, rewrite the very protocol layer of civilization.
Money, alas, is an invention that can be reinvented, a design that can be designed anew, an engine that can be reengineered. Thanks to the technology of cryptocurrency and distributed systems, money is in fact being rewritten every day by ever growing throngs of people creating new, more equitable, and more efficient money (and, no doubt, some less flattering versions of money).
Don’t like any of the options you see? No problem. Design your own damn money. I’ll help.
