No subject
Wed Jan 21 14:27:03 CET 2015
solidarity and the redistribution of wealth, the hoarding principle is
simply a no-goer. The =E2=80=98mining=E2=80=99 procedure with it =E2=80=98f=
irst movers=E2=80=99 logic
would have to replaced by an independent body that issues the coins and
sets its exchange value in comparison to neighboring currencies. This
doesn=E2=80=99t necessarily have to be done by a nation state or even an
established international governing body. Our critique should not
culminate into some =E2=80=98reformist=E2=80=99 policy that stamps out the =
anarchist
roots of the project. But we have to make clear to our brothers and
sisters: there is simply no way to legitimize the gross start-up logic
that solely benefits founders and early investors while leaving ordinary
users, and all those who build up the venture, empty handed, just
because they came in a little later. Bitcoin and its offspring need to
go back to the drawing board and come up with an alternative to the
mining principle - never mind one that is less electricity consuming.
On the other hand, true Bitcoiners are remarkably reticent, not to say
loath, to talk in terms of more than one (or a very few) person(s)
businesses, and surely so of enterprises at the corporation level. Quite
aside from the infatuation with hoarding discussed before, Bitcoin
functions mostly in the sphere of small/micro payments and is in that
sense adversary to speculative finance tools, developed by the very same
'quant class'. In a 'demography' consisting of just a minority of the
world's population (in our guess: the largely white, largely male, North
American 'anarcho-geek' sphere and a few outliers on the rest of the
planet). This appears to be also implied by both the limited number of
bitcoins that may be put in circulation [4].
In Bitcoin circles the grudge is stark against taxes ('imposition is
thievery'), but also against fees and commissions banks levy on all
possible transactions, and which, due to ultra-low interest rates,
appear to have become their main source of income, in the payment system
at least. A result of this sentiment is the invisibility of
intermediates, a general weakness of cyberculture that tends to black
out its own infrastructure costs and takes its existance for granted as
=E2=80=98a second nature=E2=80=99. Bitcoiners believe their currency is the=
unique
answer to this mess, especially at the level of micro-payments. This is
true in a technical sense =E2=80=94 all virtual currencies have the potenti=
al to
enable friction-free and fees-less transactions =E2=80=94 but the volatilit=
y of
Bitcoin makes this assumption extremely problematic for, well,
micro-payments.
Simple maths shows that Bitcoin, in its current form, does not scale to
the extent of making even a relatively modest economic/ financial system
possible. It is therefore condemned to remain a niche, something Bitcoin
believers are fairly disingenuous in denying, given the essentially
elitist disposition of their anarcho-geek community (though
'meritocratic=E2=80=99 would be their description). With other words, Bitco=
in
pretends to be an universal alternative currency, but fails to make the
grade. But as a niche, Bitcoin shows also all the characteristics of an
ongoing experiment, and that=E2=80=99s its major redeeming feature.
Apart from their technological development, innovation, and creativity
aspect, virtual/digital crypto-currencies are at this stage essentially
a social experiment, just like LETs were before =E2=80=94 and still are. Th=
ey
reflect a desire for autonomy and 'sovereignty in one's own circle' (a
Dutch religious-cultural classic, btw), and escaping the oppressive
complexity of the larger world =E2=80=94 and foremost its larger institutio=
ns.
Complementary currencies (i.e. existing alongside the existing monetary
system) largely focus on the local sphere, which, depending on the
prevailing circumstances can substantially vary in size: the WIR bank in
Switzerland, for instance, functions at the national scale [5]; in other
countries, specific local currencies have not transcended the level of a
middle-sized town or province. Yet, complementary currencies, by virtue
of being local, are inclusive. Alternative crypto- and virtual
currencies (which intend to replace the existing monetary order), on the
other hand, attempt to function at a much larger, possibly global,
geographical scale. But since the number of participants in the system
is just as severely constrained with them also, they are, ipso facto,
exclusive.
Simply put, for us, Bitcoin is a temporary, future, and de facto
complimentary currency, not an alternative one. The difference between
alternative and complimentary currencies, though blurred by operating
both of them outside the regulated, mainstream economic and financial
sphere, is essential. They vary greatly in concept, aims, and modus
operandi =E2=80=93 and outcomes. Both forms of 'voluntary' currencies also
display radically different politics. Bitcoin as an alternative currency
wants to displace, and replace, the current monetary arrangements.
Therefore it is also does not want to be limited in scope and reach,
whether geographically or economically. But that makes also it main
weakness, in the absence of an 'authority' that both (somehow)
guarantees it while at the same time compels its use by legal means.
Bitcoiners, however, will argue that this constitutes precisely its main
strength - a valid argument within its - small - world, a totally
preposterous one at the - real - world scale. Meanwhile, others in the
Bitcoin 'community' aspire, and work, for recognition and certification
by the =E2=80=98system=E2=80=99 =E2=80=94 yet another example of the =E2=80=
=98open contradiction=E2=80=99.
Complementary currencies, as their name indicate, have more modest yet
long-term ambitions. They are local (as opposed to national, or even
global, as Bitcoin, and some other virtual currencies, assert to be),
and unless entirely used within a 'closed' community, something that
limits their scope even further, complementary currencies are pegged to
the 'real existing' money of account in their (national) sphere of
circulation, which they do not intend to replace entirely (for one, many
complementary currency schemes provide for 'hybrid' payments, part
'local', part 'real' money).
Whereas complementary currencies have at the very least the political
aim to foster the local economy, and usually, given their adopting
constituencies, more than that (think fair trade, eco-friendly,
small-scale, not-for-profit, etc.), Bitcoin has no such aim at all, or
rather, for all practical purposes, serves the anarcho-capitalist agenda
of individual achievement and wealth accumulation in a 'rugged
individualist', meritocratic and competitive environment.
Bitcoin believers remain obsessed with inflation. Fear of inflation is
typically a middle class syndrome. Price rises and monetary devaluation
have a different impact for different societal/economic classes. The
poor suffer at 'ground level' as price increases affect their
consumption, and they must see how to make up day-to-day with their
(low) earnings. But they do not hold wealth. The rich, and especially
the super-rich, do hold (a lot of) wealth, but that is usually in the
form of tangible assets or ownership deeds (shares, stakes in
enterprises etc.), monetary balances being secondary. It are the middle
classes whose holdings (often in the form of savings, e.g. towards their
pension) are the most at risk. This has been seen in past inflationary
and hyper-inflationary bouts, when the nest eggs of the middle classes
were wiped out, resulting in trans-generational trauma. The middle class
character of Bitcoin is well demonstrated by this obsessive fear of
inflation - and their embrace of hoarding of a currency that supposedly
'only can accrue in value'.
The do-it-yourself aspect of Bitcoin is part of the free labour
movement. This time it is free as in =E2=80=98free of fees=E2=80=99. In kee=
ping with its
supposedly 'friction-less' character, Bitcoin is hailed as a uniquely
community-managed adventure, based on the DYI activity of its members.
Only, given the increasingly complex aspect of Bitcoin's principal
occupation, mining, now restricted to a limited number of
(terabyte-)powerful entities, it is unclear in what this activity of the
many is precisely made of (unless one considers hoarding as work). And
in consonance with the nature of anarcho-capitalism, very little is
clear either of what the community exactly consists of - or whether it
is a real community at all.
In so far DYI is equivalent to free labour, it is hard to fathom how
exactly this works in a set up that is geared towards and based on
(economic) transactions on one side, while on the other is so greatly
concerned with value and possession on the other. Given Bitcoiners'
absolute detestation of fees and other transaction costs charged by 'the
system', it is interesting to note that Bitcoin, which is supposed to do
away with these institutional charges and banking fees, actually does
provides for them on (very) small transactions (but not on large ones,
itself a none too egalitarian feature), and also that its theoreticians
asserts that when mining will terminate (in 2040, with 21 million
bitcoins in circulation) the system will maintain itself ... through
fees.
Lately Bitcoin has reached some sort of cruising speed (however bumpy) =E2=
=80=94
and this not only in the minds of its believers - new problems are
popping up in its relationship with 'the real world'. The powers that
be, and more specifically their financial/monetary arms, want to
regulate the new kid on the block. A part of the Bitcoin 'community' has
decided it wants that too, spurred both by a desire for wider
recognition and acceptance, but also because Bitcoin's reputation,
already shaky at the best of times, has now been further tarnished by a
number of massive, high-exposure scams. Regulation under a central,
external authority is, of course, totally at variance with Bitcoin's
central tenets, and besides being yet another blatant example of 'open
contradiction', such moves have now split the community and the Bitcoin
Foundation. And it obviously needs little argument to declare that a
regulated Bitcoin degrades into nothing more than yet another new,
ueber-hip and flashy financial vehicle =E2=80=93 which is anyway how it is
looked at by the 'financial sector'.
Rather sooner than later money will be split in two: the morally
bankrupted official ones and the informal (local) ones. The need for P2P
payments will only increase. By now, the banking system as we know it
has become largely dysfunctional for ordinary monetary transactions
between small and medium size economic actors. Low interest rates and
other factors 'force' banks to levy hefty fees and commissions, while on
the other hand, ubiquitous electronic networks hold the promise of next
to transaction costs-free transfers of money (and more).
It is unavoidable therefore, that ordinary payments will drop out of the
cumbersome and expensive banking system and that various other platforms
will come in its place. This evolution has already started, e.g. on the
mobile phone front (think Mpesa for instance). P2P transactions, whereby
the exchange is entirely in the hands of participants, with no middle
instance in between, are the endpoint of this trend.
Bitcoin pretends to be the ultimate solution within this fast-paced
transformation of the monetary sphere. We have argued that this
contention is very questionable on many practical and social grounds. In
the tradition of software forking (creating similar but different
clones) there is an inevitability of forking: Bitcoin after Bitcoin
(which will pursue in part II). The other direction would be to go
=E2=80=98meta=E2=80=99 and create an exchange for all the different crypto-=
currencies
(see Ethereum [6]). Regardless, our thesis is that one or the other
might entail a return to the nature of trust, contract vs. distributed
trust, on a 'working scale'.
And let=E2=80=99s not fool ourselves (and others): Bitcoin is, in the end, =
an
accounting system. It has a ledger, even though it is a distributed one.
If you cut off mining and the blockchain from Bitcoin (as we propose),
the problem that remains is called trust. The blockchain =E2=80=94 the
distributed verification algorithm that vouches for the validity of
bitcoins transfers, guaranteeing that no bitcoin is spend twice=E2=80=94is =
the
nearest approximation of the Divine in the Bitcoin religion (and, we
found out to our dismay, in next to all other future, planned
crypto-currencies we have come across) [7]. It is also the most
important of the general weaknesses in the Bitcoin model, since it
assumes the permanency of powerful, always online computers/server
farms/cloud services that supposedly no one pays for, and of the whole,
complex and fragile infrastructure that sustains them.
It is also the mainstay of Bitcoin's inflexible faith in algorithms and
machines above the =E2=80=94 always fallible, and crookedly inclined =E2=80=
=94 human
being, another reminder of its solidly 'Anglo' origins. Other systems
may well want to do away with the blockchain as implementer of 'designed
trust'[8], but is that realistic? The problem then is where to position
that trust - which is the imperative constituent of any monetary system.
This brings us back to the scalability issue, which basically says that
as the number of participants in a system grows, the need for an
impartial, 'enforced authority' (which however needs to be voluntarily
accepted) rapidly increases, soon becoming mandatory.
Needless to add that Bitcoiners forcefully reject this argument, in
their absolute belief of the ('rugged') individual and the distributed.
Since the argument itself is grounded on values/beliefs, no conclusive
elucidation can be arrived in the matter - beyond pointing out to the
irrefutable smallness of the factual Bitcoin constituency, both actual
and ideal.
Farewell, Winkelvoss Bros. The future of Bitcoin is bright but will come
after Bitcoin. The advance of small scale digital (crypto)currencies
that operate within a specific social setting (be it local or
translocal), either labeled alternative or complementary, is definitely
unstoppable. However, as we have seen before, the trickiest part, in
terms of adoption and economic effectiveness, is their relation with the
'real existing' money (termed as =E2=82=AC, =C2=A3, $, whatever...), and in=
this,
complementary currencies are much more flexible than alternative ones.
Bitcoin wants to belong to the latter category, and is moreover prone to
rather robust speculative stints - up and down - in its relationship
with 'real' money.
However, technological advances to which the current banking system is
ill-prepared, especially at the 'retail' level (never mind the not
improbable collapse of the financial/monetary system as we know it),
makes that non-banking, and possibly non-centrally regulated, electronic
payment systems will win the day, especially in the realm of
transactions by or between individuals. Banks want to get rid of
individual, private, 'little guy' customers anyway, they are a nuisance
with their puppet house payments. Profit margins remain too low in the
consumer sector, despite the rise in fees. When and how this will all
=E2=80=98flip=E2=80=99 remains a matter of speculation and depends on a lot=
of factors,
including political ones.
What is less speculative, however, is that the currency/ies that will
emerge will not be denominated Bitcoin, at least not in its current
representation. Bitcoin, however, and that might be its greatest and
undeniable merit, has very much accelerated the thinking about this
evolution, has spawned a multitudes of parallel solutions, and has, both
on the social as well as on the technical plane, by trial and error,
cleared a lot of ground for others in this process.
Why can we communicate on a global level, but not pay? We can
communicate on a global level, though it is less frictionless than is
often thought (try Central Congo, for one). The higher the degree of
'development', the smoother communications are. The same applies to
money transfers, which, in Northern Europe at last, are almost
friction-free and largely costless. In this context the problem resides
much more with the banking system, wavering on the verge of collapse due
to its extreme (and excessive) financialisation, than with the existing
payment infrastructure itself, which, if run like an utility, and its
costs born out of public funds, could be largely seamless and free of
charge.
Since this is not the case, and most probably will not be in any
conceivable future, all kinds of new, mostly (Inter)net-born formats
will continue to arise, Bitcoin being just one of the first and most
emblematic. Or as one of its promoters says: "Bitcoin only represents
the first wave of game-changing technological innovations to come",
adding for good measure that "the technology behind (B)itcoin cannot be
legislated away". Nor that of many more formats.
Large-scale use of mobile money in parts of Africa provide an
interesting =E2=80=98Lehrst=C3=BCck=E2=80=99, one that is not easily transf=
erable to other
parts of the world where the banking system has a tight grip on the
economy. What mobile money does have in common with Bitcoin is the
larger techno-historical movement from communication to payment. Because
Bitcoin is 100% internet-based it does not see itself as an extension of
the world od commercial telecom providers. Mobile money does. Such
anthropological comparisons can be productive and reveal implicit
cultural values hidden in the shiny interfaces and self-evident
processual knowledge.
Bitcoin, as an anarcho-capitalist experiment, does not scale and was
perhaps never meant to. Perhaps this was not even desirable in the first
place and claims need to be downsized accordingly. If Bitcoin was
=E2=80=98merely=E2=80=99 going to be a (built-in) payment protocol, for ins=
tance inside
HTML, it would be a bold undertaken. A first step would be to strip off
its libertarian mining ritual and blockchain religion =E2=80=94 and then se=
e
what=E2=80=99s left. Right now, crypto currencies are the avant-garde of ou=
r
age. In line with the Zeitgeist the avant-garde this time is neither
progressive nor artistic but technical and entrepreneurial, willingly or
not fueling the growing social inequality. No esthetics please, we=E2=80=99=
re
strictly conceptual. And if everything fails, Bitcoin can always
retrospectively go into history as an artwork, a true social sculpture
(courtesy to Duchamps, Beuys and Jaromil).
(to be continued in part II)
=E2=80=94
[1] Ippolita, In the Facebook Aquarium, Institute of Network Cultures,
Amsterdam, 2015.
[2] Geek suprematism, run by an =E2=80=98algocracy=E2=80=99,
http://philosophicaldisquisitions.blogspot.nl/2014/01/rule-by-algorithm-big=
-data-and-threat.html
.
[3] =E2=80=9CIf it looks like a duck, swims like a duck, and quacks like a =
duck,
then
it probably is a duck.=E2=80=9D More on
http://en.wikipedia.org/wiki/Duck_test"
http://en.wikipedia.org/wiki/Duck_test.
[4] 21 m at the most, which, when fractioned by 9 positions
behind the zero, gives a maximum of 220 bn units of micropayment (say, the
equivalent of 1=C2=A2 US) at a conservative valuation of Bitcoin at US$ 100
per unit. Going by the 1 Dollar - 100 cents division of currency, this
results
in a total maximum amount of 2.2bn 'Bitcoin Dollars', or a somewhat
diminutive
economy by all means (please do the math yourself - and correct us if
wrong).
[5] Official site: http://www.wir.ch/ (in German, French or Italian
only) Wikipedia entry in English (but disputed):
https://en.wikipedia.org/wiki/WIR_Bank
[6] See: https://en.wikipedia.org/wiki/Ethereum.
[7] See especially Eduard de Jong's presentation at the MoneyLab
conference:
http://networkcultures.org/moneylab/2014/03/23/edward-de-jong-towards-an-op=
en-e-currency-system/
and article "One Chain to Rule Them all":
http://networkcultures.org/moneylab/2014/12/16/one-chain-to-rule-them-all/
[8] Caroline Nevejan, Presence and the Design of Trust, PhD dissertation
University of Amsterdam, 2007. URL: http://nevejan.org/presence/.
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<div dir=3D"ltr">excellent critical essay<div><br><div class=3D"gmail_quote=
">---------- Forwarded message ----------<br>From: <b class=3D"gmail_sender=
name">Orsan</b> <span dir=3D"ltr"><<a href=3D"mailto:orsan1234 at gmail.com=
">orsan1234 at gmail.com</a>></span><br>Date: Fri, Jan 30, 2015 at 5:39 PM<=
br>Subject: [NetworkedLabour] Fwd: <nettime> Geert Lovink & Patri=
ce Riemens: The Bitcoin Experience, Part One<br>To: "<<a href=3D"ma=
ilto:networkedlabour at lists.contrast.org">networkedlabour at lists.contrast.org=
</a>>" <<a href=3D"mailto:networkedlabour at lists.contrast.org">ne=
tworkedlabour at lists.contrast.org</a>><br><br><br><div dir=3D"auto"><div>=
<br></div><blockquote type=3D"cite"><div><b>Resent-From:</b> <a href=3D"mai=
lto:nettime at kein.org" target=3D"_blank">nettime at kein.org</a><br><b>From:</b=
> "Patrice Riemens" <<a href=3D"mailto:patrice at xs4all.nl" targ=
et=3D"_blank">patrice at xs4all.nl</a>><br><b>Date:</b> 30 januari 2015 08:=
34:05 CET<br><b>Resent-To:</b> Nettime <<a href=3D"mailto:nettime-l at kein=
.org" target=3D"_blank">nettime-l at kein.org</a>><br><b>To:</b> <a href=3D=
"mailto:nettime-l at kein.org" target=3D"_blank">nettime-l at kein.org</a><br><b>=
Subject:</b> <b><nettime> Geert Lovink & Patrice Riemens: The Bit=
coin Experience, Part One</b><br><br></div></blockquote><blockquote type=3D=
"cite"><div><span></span><br><span>Geert Lovink & Patrice Riemens</span=
><br><span></span><br><span>The Bitcoin Experience - Part One</span><br><sp=
an></span><br><span></span><br><span>We admit: we are fazed and befuddled b=
y the Bitcoin phenomenon. And we</span><br><span>are getting more so as we =
progress - or think to progress - in getting</span><br><span>to grips with =
it. It has meanwhile become clear that Bitcoin, probably</span><br><span>to=
the chagrin of its believers, has become much more than, well,</span><br><=
span>Bitcoin. That is why we have decided, both to split our essay (essay i=
s</span><br><span>the right word indeed, an attempt) in two parts - and to =
take it, to use</span><br><span>the charitable word, as a 'work in prog=
ress', even though the gestation</span><br><span>period of even this fi=
rst part has been inordinately long. We have also</span><br><span>taken the=
open Source injunction to 'release early' to heart - was it</span>=
<br><span>only because writing appears to stay stuck in the incubation stag=
e. This</span><br><span>first part, which was our original plan, is about B=
itcoin we know as</span><br><span>Bitcoin. What the Dutch so nicely call &#=
39;progressive understanding' has</span><br><span>compelled us to look =
at the inevitable: Bitcoin after Bitcoin. So the</span><br><span>Part Two w=
ill look at the probable inescapability of digital</span><br><span>crypto-c=
urrencies 'liberated' from the fiat and the sovereign - and its</sp=
an><br><span>consequences. If we ever manage amidst our befuddlement.=C2=A0=
Hopefully you</span><br><span>will bear with us - after all you are not ob=
liged to read, less so to</span><br><span>believe, as the 'Bitcoiners&#=
39; do. But if you plod on, let us pray first:</span><br><span></span><br><=
span>OUR BANKER WHO ART IN CYBERSPACE</span><br><span>SATOSHI BE THY NAME</=
span><br><span>THY BITCOIN COME</span><br><span>DOLLAR BILLS BE GONE</span>=
<br><span>IN OUR POCKETS, AS IT IS ONLINE</span><br><span>GIVE US THIS DAY =
OUR CONFIRMED TRANSACTIONS</span><br><span>AND FORGIVE US OUR DOUBLE SPENDI=
NG</span><br><span>AS WE ALSO HAVE FORGIVEN TRENDON SHAVERS</span><br><span=
>AND LEAD US NOT FROM THE BLOCKCHAIN</span><br><span>BUT DELIVER US THE MIN=
ED BLOCKS</span><br><span>FOR EVER AND EVER</span><br><span>AMEN</span><br>=
<span></span><br><span>(from the Bitcoin Magazine, November 2013 issue)</sp=
an><br><span></span><br><span></span><br><span>Bitcoin is not the response =
to an effective demand, but to an emotional</span><br><span>desire. The int=
ernet crypto currency expresses a longing for liberation</span><br><span>th=
rough the mediation of technology. It grows out of a post-apocalyptic</span=
><br><span>will to start all over again, in between financial crises of epi=
c</span><br><span>proportions, to put an end to the never-ending recession.=
This time, so</span><br><span>do believers in Bitcoin maintain, the econom=
y will be lead by our tribe</span><br><span>of techno-libertarians, and not=
by the vile, corrupted banksters and</span><br><span>politicians in their =
employ. Amidst the rubble of the collapsing global</span><br><span>capitali=
sm, there is nothing left to demand =E2=80=94 who would listen anyway?</spa=
n><br><span>What is your blueprint for the next monetary system? After all,=
Bitcoin</span><br><span>architecture is not a given. Let=E2=80=99s be fran=
k: everything is up for grabs,</span><br><span>including the premises of th=
e Bitcoin project itself, which is what we</span><br><span>intend to do her=
e.</span><br><span></span><br><span>The historical concurrence between Bitc=
oin and Occupy is no coincidence.</span><br><span>The enthusiasm for Bitcoi=
n amongst geeks and IT entrepreneurs stems from</span><br><span>the popular=
disillusionment with the financial system, matched with an</span><br><span=
>equally strong belief in the Internet ideology of nodism and anonymity.</s=
pan><br><span>In line with the 'anarcho-geek' character of Bitcoin,=
[1] its 'rugged</span><br><span>individualists' community exudes a =
deep distrust, even hatred of all</span><br><span>'big' institution=
s, foremost governments (as exemplified by the US</span><br><span>governmen=
t), but also of big business and large financial institutions.</span><br><s=
pan>All stand accused, and to a large extent for good reasons, to squeeze</=
span><br><span>the 'little guy' out of a living by all possible mea=
ns.</span><br><span></span><br><span>Geeks and assorted believers in inform=
ation technology assume that the</span><br><span>only solution to overturn =
this unfair system is to truly implement the</span><br><span>distributed, d=
ecentralized, 'original' values of the Internet. They</span><br><sp=
an>reject the Internet of monopolies such as Google, Amazon and Facebook to=
</span><br><span>embrace a romanticized version of it. They call, not for t=
he Internet of</span><br><span>the military, the telecommunication giants a=
nd their centralized</span><br><span>logistics, but for a peer-to-peer asse=
mblage of users who arrange their</span><br><span>own monetary rewards. E-c=
ommerce was in their eyes was its failed,</span><br><span>compromised fore-=
runner since it did not question the nature of the</span><br><span>currenci=
es being used.</span><br><span></span><br><span>Bitcoin is driven by the ea=
gerness of a specific, 'tech' elite to</span><br><span>achieve soci=
al escape velocity so as to bail out from the murky</span><br><span>complex=
ity of the world. It should be seen as the umpteenth avatar of</span><br><s=
pan>the privileged classes wanting to pull out of the grudge of everyday</s=
pan><br><span>reality and its messy social sphere. Bitcoin is part and parc=
el of the</span><br><span>'Masters of the Universe' narrative, this=
time in its 'Geek'</span><br><span>declination, but given its appe=
al, it cannot be considered as some</span><br><span>subaltern, folkloric mo=
vement. The Bitcoin ideology reflects a profound,</span><br><span>and widel=
y shared, distrust in existing organizational formats and</span><br><span>p=
ractices.</span><br><span></span><br><span>Bitcoin is based on =E2=80=98dis=
tributed trust=E2=80=99 instead of =E2=80=98contract trust=E2=80=99.</span>=
<br><span>Governments and banks, among other 'real world' instituti=
on, function on</span><br><span>basis of contract trust, enshrined and enfo=
rced by way of charters,</span><br><span>constitutions, laws and regulation=
s etc.=C2=A0 Instead Bitcoin believers want</span><br><span>a technology-im=
plemented, disseminated form of trust, shared and borne</span><br><span>by =
all the individuals involved, not unlike the broadcast - one-to-many</span>=
<br><span>- vs. narrowcast - one-to-one, many-to-many - polarity that prope=
lled</span><br><span>the Internet revolution of the 1990s. This approach fo=
rms the core of</span><br><span>Bitcoin=E2=80=99s utopian impulse.</span><b=
r><span></span><br><span>As Evgeny Morozov puts it: Bitcoin proposes an =
9;algo' solution for a</span><br><span>political problem. It is based o=
n the conviction that =E2=80=9Call politics</span><br><span>sucks=E2=80=9D =
and always will, and that technical solutions are always</span><br><span>&#=
39;cleaner' and 'better' than social ones: =E2=80=9Creplace the=
messy social with</span><br><span>beauty of pure mathematics=E2=80=9D, as =
the parole goes.[2] Bitcoin believers</span><br><span>hold for evident that=
what really matters is mastering the technology,</span><br><span>and that =
those who master the technology will rule - by right. Hence</span><br><span=
>their approach, and consequently, they themselves, should be in command</s=
pan><br><span>- instead of, e.g. politicians. However, Morozov=E2=80=99s su=
perior Realtheorie</span><br><span>might very well turn out into a dead-end=
street. In terms of strategy it</span><br><span>unfortunately boils down t=
o a collection of truisms amounting to a 'been</span><br><span>there, d=
one that' brand of indifference and cynicism. Morozov=E2=80=99s argumen=
t</span><br><span>is a perfect way to close down the conversation. Stated w=
ithout much of</span><br><span>an understanding of alternative practices, h=
is calls to =E2=80=98return to</span><br><span>politics=E2=80=99 proves pro=
blematic because it glosses over the moral</span><br><span>bankruptcy of We=
stern democratic procedures. Robust technology critique</span><br><span>may=
please =E2=80=98old media=E2=80=99 like liberal newspapers and established=
</span><br><span>publishing houses whose business models are crumbling unde=
r the</span><br><span>onslaught of the digital, the rise of social media an=
d the emergence of</span><br><span>intermediate powerhouses such as Google =
and Amazon.</span><br><span></span><br><span>But Bitcoin holds the promise =
to do better than that. Does it?</span><br><span></span><br><span>The sheer=
size of the speculative finance complex constitutes the</span><br><span>ma=
cro-economic background against which Bitcoin has emerged. For quite</span>=
<br><span>some time now, monetary and fiscal balances have grown completely=
out of</span><br><span>control, both in terms of quantity, as in terms of =
the velocity with</span><br><span>which they circulate - the former being a=
lso a consequence of the</span><br><span>latter. In many eyes, the relation=
ship between the financial sphere and</span><br><span>the 'real economy=
' has been lost, to be replaced by a situation where</span><br><span>th=
e sheer size of speculative finance dwarfs the actual needs of the</span><b=
r><span>everyday, 'brick-and-mortar', products and services-based e=
conomy.</span><br><span></span><br><span>However, one of the major difficul=
ties with Bitcoin is that it does not</span><br><span>scale either, but the=
n in the reverse direction. By any count the</span><br><span>maximum size o=
f the potential circulation of bitcoins is dwarfed,</span><br><span>several=
times over, not only by the size of the current financial</span><br><span>=
speculative, balances, which form a recognized problem, but also by the</sp=
an><br><span>amounts needed to run the 'real economy' itself. The s=
elf-imposed,</span><br><span>constitutive limitation on the total number of=
bitcoins in existence</span><br><span>(just short of 21 million when all h=
ave been mined', i.e. created), and</span><br><span>the fact that the u=
nit of account can only be shifted nine decimal</span><br><span>places, red=
uces the usability of Bitcoin to that of a very local</span><br><span>curre=
ncy, not a planetary one. This is but one, yet a very practical</span><br><=
span>issue with Bitcoin as an alternative to our present global monetary</s=
pan><br><span>dispensation.</span><br><span></span><br><span>The scarcity o=
f Bitcoin is designed - 'it is not a bug but a feature'.</span><br>=
<span>It is not due to a technical limitation, to be resolved in due time b=
y</span><br><span>more powerful computers. This is probably predicated by t=
he</span><br><span>retro-futurist desire amongst geeks to return to the dep=
endable quality</span><br><span>of gold. The idea being to retain the timel=
ess neutrality of gold</span><br><span>without its material disadvantages, =
abolished by the magic of the</span><br><span>digital. Bitcoin presents its=
elf as destined to become the virtual gold.</span><br><span></span><br><spa=
n>But on the other hand, Bitcoin believers want to re-create a</span><br><s=
pan>friction-less, costs-free payment system between individuals. Thus,</sp=
an><br><span>Bitcoin can be seen as the revenge of the so-called small guy =
against</span><br><span>the molochs of finance who have crushed daily monet=
ary</span><br><span>wheeling-and-dealing under monopolistic intermediation =
fees and</span><br><span>regulations that favour large players. However, th=
is peer-to-peer model</span><br><span>is difficult to reconcile with the gl=
orification of gold, which</span><br><span>basically denotes a hoarding att=
itude, besides Bitcoin believers=E2=80=99</span><br><span>ingrained fear of=
inflation.</span><br><span></span><br><span>Bitcoin has also emerged at th=
e peak of the continuing US dollar</span><br><span>dominance despite the on=
going economic crisis. One of the many issues on</span><br><span>which the =
Bitcoin community of believers is strangely silent about is</span><br><span=
>the dual role of the US Dollar, the currency they, implicitly or</span><br=
><span>explicitly, take as their by-default reference. The US dollar, howev=
er,</span><br><span>being on one side an ordinary fiat currency, partakes i=
n all the sins</span><br><span>lambasted by Bitcoiners, among others its in=
flationary tendency so much</span><br><span>feared by them. On the other si=
de it is the 'imperial' currency of the</span><br><span>United Stat=
es of America, welcomed and used by the entire world, and yet</span><br><sp=
an>subject to the sole decisions of the US Federal Reserve, usually taken</=
span><br><span>solely with the political-economic interests of the USA in m=
ind. The US</span><br><span>Dollar is the all-powerful economic agent of th=
e United States=E2=80=99</span><br><span>structural hegemony. It remains fo=
r the time being the only currency in</span><br><span>the world with such a=
n 'exorbitant privilege'. The standing and position</span><br><span=
>of Bitcoin in such a dispensation are, to say the least, unclear.</span><b=
r><span>Suffice to say that a true sovereign currency would never refer its=
elf</span><br><span>to the US dollar (or Euro, Yen or Pound for that matter=
).</span><br><span></span><br><span>So far we have discussed the financial =
and economic weaknesses. There is</span><br><span>worse to come.</span><br>=
<span></span><br><span>Ponzi Schemes and Messianic Religions</span><br><spa=
n></span><br><span>One of the main critiques addressed at Bitcoin is that i=
t is shares its</span><br><span>design with a Ponzi scheme. Just as in the =
Ponzi scheme, the pyramid</span><br><span>set-up of Bitcoin turns early pla=
yers into winners, at the expense of</span><br><span>gullible latecomers. T=
his is not accidental but deliberate: Bitcoin is a</span><br><span>typicall=
y geek-meritocratic project. Bitcoin's believers' usual retort</spa=
n><br><span>is that people calling Bitcoin a pyramid neither understand wha=
t Bitcoin</span><br><span>really is, nor, for that matter, know what a Ponz=
i scheme looks like.</span><br><span>Yet Bitcoin exhibits so many resemblan=
ces to a classic Ponzi scheme that</span><br><span>the 'duck test' =
allegory easily comes to mind.[3]</span><br><span></span><br><span>At the s=
ame time Bitcoin also manifests all the signs of being a</span><br><span>re=
ligion. A religion with a core of true believers, absolutely convinced</spa=
n><br><span>both of the superiority of Bitcoin as a payment system, but als=
o of its</span><br><span>unavoidable and speedy adoption worldwide, regardl=
ess of cultural and</span><br><span>political differences. Despite the limi=
ted options Bitcoin offers as a</span><br><span>financial instrument (basic=
ally only peer-to-peer transactions), Bitcoin</span><br><span>believers are=
convinced that it will actually take over the</span><br><span>monetary/fin=
ancial system as a whole. Their argument, however, mostly</span><br><span>h=
inges on near-otherwordly certitude, the hallmark of a messianic</span><br>=
<span>religion. Ominous is also the fact that Bitcoin believers hold their<=
/span><br><span>currency to be so much more than a financial vehicle: a who=
le new,</span><br><span>brilliant 'way of life' (including t-shirts=
, ATMs, apps, gambling sites</span><br><span>and glossy magazines).</span><=
br><span></span><br><span></span><br><span>Open Contradictions</span><br><s=
pan></span><br><span>A possible way to reach for a better understanding of =
Bitcoin is to</span><br><span>apply a theory of open contradictions. What, =
for instance, represents a</span><br><span>payment system that turns out no=
t to be primarily meant for payments?</span><br><span></span><br><span>&quo=
t;Bitcoin makes payments frictionless and free", and "hoarders gi=
ve</span><br><span>Bitcoin value." The Bitcoin literature is replete w=
ith such conflicting</span><br><span>statements and associated theories =E2=
=80=94 all brought forward with equal</span><br><span>enthusiasm. When bitc=
oins increase in value, the incentive to spend them</span><br><span>is simp=
ly absent, and only losers will spend or sell. Such</span><br><span>inconsi=
stencies are ostensibly not a problem for the Bitcoin community:</span><br>=
<span>with bitcoins everything should, and therefore is, possible. Yes, you=
</span><br><span>can have the cake and eat it (and own the bakery in the pr=
ocess). This</span><br><span>is especially glaring in Bitcoin's 'th=
eory of value'. Whereas Bitcoin is</span><br><span>predicated to functi=
on optimally as a peer-to-peer medium of exchange,</span><br><span>and this=
preferably within a closed Bitcoin economic circuit, Bitcoiners</span><br>=
<span>are encouraged to hoard their funds. After all, the scarcity of</span=
><br><span>bitcoins, whose supply is ultimately limited to 21 million units=
</span><br><span>(20.999.999,9769 to be precise), will automatically push u=
p their value</span><br><span>over time.</span><br><span></span><br><span>T=
his deflationary Bitcoin model not only gives the creeps to any</span><br><=
span>mainstream economist or politician, but it is also essentially adverse=
</span><br><span>to transactions =E2=80=94 Bitcoin's advertised princip=
al raison d'etre =E2=80=94 since</span><br><span>every spending amounts=
to a distress sale. Bitcoin is here probably</span><br><span>victim of its=
origins, the culture of rugged individualism, coupled with</span><br><span=
>the anarcho-capitalist axioma that "greed is good". This, howeve=
r, does</span><br><span>not make for sound economics, based on social excha=
nge. The mining</span><br><span>principle, Bitcoin=E2=80=99s foundation myt=
h and principal motor, points to a</span><br><span>dark past, not a common =
future =E2=80=94 the necessary condition for a currency</span><br><span>mea=
nt to be used by billions of human being. You do not design a</span><br><sp=
an>currency for yourself. This forms a basic premise of economic exchange.<=
/span><br><span>Slaves do not need Bitcoin. Life is subordinated to the eco=
nomy. Code is</span><br><span>not only law but code is life.</span><br><spa=
n></span><br><span>If the original sin of fiat money is inflation, then the=
original sin of</span><br><span>Bitcoin is the hoarders vs. spenders contr=
adiction. Out of this comes</span><br><span>our social and political critiq=
ue of Bitcoin.</span><br><span></span><br><span>The modalities of Bitcoin =
=E2=80=94 as put fervently forward by Bitcoin</span><br><span>believers the=
mselves =E2=80=94 could make it uniquely convenient as a</span><br><span>pe=
er-to-peer payment system - but for all practical purposes,</span><br><span=
>exclusively so. Hence the emphasis on transactions between individual</spa=
n><br><span>persons, unhampered by despicable middle entities, such as bank=
s, and</span><br><span>unhindered by even more despicable actors such as go=
vernments with their</span><br><span>bevy of regulations and ... taxes.</sp=
an><br><span></span><br><span>As conceptualized by its true believers, Bitc=
oin is the money of the</span><br><span>Multitudes. Yet, the problem is tha=
t Bitcoiners are not part of the</span><br><span>Multitudes =E2=80=94 and m=
ost probably do not want to be associated with them.</span><br><blockquote =
type=3D"cite"><span>From the perspective of social movements that fight for=
global justice,</span><br></blockquote><span>solidarity and the redistribu=
tion of wealth, the hoarding principle is</span><br><span>simply a no-goer.=
The =E2=80=98mining=E2=80=99 procedure with it =E2=80=98first movers=E2=80=
=99 logic</span><br><span>would have to replaced by an independent body tha=
t issues the coins and</span><br><span>sets its exchange value in compariso=
n to neighboring currencies. This</span><br><span>doesn=E2=80=99t necessari=
ly have to be done by a nation state or even an</span><br><span>established=
international governing body. Our critique should not</span><br><span>culm=
inate into some =E2=80=98reformist=E2=80=99 policy that stamps out the anar=
chist</span><br><span>roots of the project. But we have to make clear to ou=
r brothers and</span><br><span>sisters: there is simply no way to legitimiz=
e the gross start-up logic</span><br><span>that solely benefits founders an=
d early investors while leaving ordinary</span><br><span>users, and all tho=
se who build up the venture, empty handed, just</span><br><span>because the=
y came in a little later. Bitcoin and its offspring need to</span><br><span=
>go back to the drawing board and come up with an alternative to the</span>=
<br><span>mining principle - never mind one that is less electricity consum=
ing.</span><br><span></span><br><span>On the other hand, true Bitcoiners ar=
e remarkably reticent, not to say</span><br><span>loath, to talk in terms o=
f more than one (or a very few) person(s)</span><br><span>businesses, and s=
urely so of enterprises at the corporation level. Quite</span><br><span>asi=
de from the infatuation with hoarding discussed before, Bitcoin</span><br><=
span>functions mostly in the sphere of small/micro payments and is in that<=
/span><br><span>sense adversary to speculative finance tools, developed by =
the very same</span><br><span>'quant class'. In a 'demography&#=
39; consisting of just a minority of the</span><br><span>world's popula=
tion (in our guess: the largely white, largely male, North</span><br><span>=
American 'anarcho-geek' sphere and a few outliers on the rest of th=
e</span><br><span>planet). This appears to be also implied by both the limi=
ted number of</span><br><span>bitcoins that may be put in circulation [4].<=
/span><br><span></span><br><span>In Bitcoin circles the grudge is stark aga=
inst taxes ('imposition is</span><br><span>thievery'), but also aga=
inst fees and commissions banks levy on all</span><br><span>possible transa=
ctions, and which, due to ultra-low interest rates,</span><br><span>appear =
to have become their main source of income, in the payment system</span><br=
><span>at least. A result of this sentiment is the invisibility of</span><b=
r><span>intermediates, a general weakness of cyberculture that tends to bla=
ck</span><br><span>out its own infrastructure costs and takes its existance=
for granted as</span><br><span>=E2=80=98a second nature=E2=80=99. Bitcoine=
rs believe their currency is the unique</span><br><span>answer to this mess=
, especially at the level of micro-payments. This is</span><br><span>true i=
n a technical sense =E2=80=94 all virtual currencies have the potential to<=
/span><br><span>enable friction-free and fees-less transactions =E2=80=94 b=
ut the volatility of</span><br><span>Bitcoin makes this assumption extremel=
y problematic for, well,</span><br><span>micro-payments.</span><br><span></=
span><br><span>Simple maths shows that Bitcoin, in its current form, does n=
ot scale to</span><br><span>the extent of making even a relatively modest e=
conomic/ financial system</span><br><span>possible. It is therefore condemn=
ed to remain a niche, something Bitcoin</span><br><span>believers are fairl=
y disingenuous in denying, given the essentially</span><br><span>elitist di=
sposition of their anarcho-geek community (though</span><br><span>'meri=
tocratic=E2=80=99 would be their description). With other words, Bitcoin</s=
pan><br><span>pretends to be an universal alternative currency, but fails t=
o make the</span><br><span>grade. But as a niche, Bitcoin shows also all th=
e characteristics of an</span><br><span>ongoing experiment, and that=E2=80=
=99s its major redeeming feature.</span><br><span></span><br><span>Apart fr=
om their technological development, innovation, and creativity</span><br><s=
pan>aspect, virtual/digital crypto-currencies are at this stage essentially=
</span><br><span>a social experiment, just like LETs were before =E2=80=94 =
and still are. They</span><br><span>reflect a desire for autonomy and '=
sovereignty in one's own circle' (a</span><br><span>Dutch religious=
-cultural classic, btw), and escaping the oppressive</span><br><span>comple=
xity of the larger world =E2=80=94 and foremost its larger institutions.</s=
pan><br><span></span><br><span>Complementary currencies (i.e. existing alon=
gside the existing monetary</span><br><span>system) largely focus on the lo=
cal sphere, which, depending on the</span><br><span>prevailing circumstance=
s can substantially vary in size: the WIR bank in</span><br><span>Switzerla=
nd, for instance, functions at the national scale [5]; in other</span><br><=
span>countries, specific local currencies have not transcended the level of=
a</span><br><span>middle-sized town or province. Yet, complementary curren=
cies, by virtue</span><br><span>of being local, are inclusive. Alternative =
crypto- and virtual</span><br><span>currencies (which intend to replace the=
existing monetary order), on the</span><br><span>other hand, attempt to fu=
nction at a much larger, possibly global,</span><br><span>geographical scal=
e. But since the number of participants in the system</span><br><span>is ju=
st as severely constrained with them also, they are, ipso facto,</span><br>=
<span>exclusive.</span><br><span></span><br><span>Simply put, for us, Bitco=
in is a temporary, future, and de facto</span><br><span>complimentary curre=
ncy, not an alternative one. The difference between</span><br><span>alterna=
tive and complimentary currencies, though blurred by operating</span><br><s=
pan>both of them outside the regulated, mainstream economic and financial</=
span><br><span>sphere, is essential. They vary greatly in concept, aims, an=
d modus</span><br><span>operandi =E2=80=93 and outcomes. Both forms of '=
;voluntary' currencies also</span><br><span>display radically different=
politics. Bitcoin as an alternative currency</span><br><span>wants to disp=
lace, and replace, the current monetary arrangements.</span><br><span>There=
fore it is also does not want to be limited in scope and reach,</span><br><=
span>whether geographically or economically. But that makes also it main</s=
pan><br><span>weakness, in the absence of an 'authority' that both =
(somehow)</span><br><span>guarantees it while at the same time compels its =
use by legal means.</span><br><span>Bitcoiners, however, will argue that th=
is constitutes precisely its main</span><br><span>strength - a valid argume=
nt within its - small - world, a totally</span><br><span>preposterous one a=
t the - real - world scale. Meanwhile, others in the</span><br><span>Bitcoi=
n 'community' aspire, and work, for recognition and certification</=
span><br><span>by the =E2=80=98system=E2=80=99 =E2=80=94 yet another exampl=
e of the =E2=80=98open contradiction=E2=80=99.</span><br><span></span><br><=
span>Complementary currencies, as their name indicate, have more modest yet=
</span><br><span>long-term ambitions. They are local (as opposed to nationa=
l, or even</span><br><span>global, as Bitcoin, and some other virtual curre=
ncies, assert to be),</span><br><span>and unless entirely used within a =
9;closed' community, something that</span><br><span>limits their scope =
even further, complementary currencies are pegged to</span><br><span>the &#=
39;real existing' money of account in their (national) sphere of</span>=
<br><span>circulation, which they do not intend to replace entirely (for on=
e, many</span><br><span>complementary currency schemes provide for 'hyb=
rid' payments, part</span><br><span>'local', part 'real'=
; money).</span><br><span></span><br><span>Whereas complementary currencies=
have at the very least the political</span><br><span>aim to foster the loc=
al economy, and usually, given their adopting</span><br><span>constituencie=
s, more than that (think fair trade, eco-friendly,</span><br><span>small-sc=
ale, not-for-profit, etc.), Bitcoin has no such aim at all, or</span><br><s=
pan>rather, for all practical purposes, serves the anarcho-capitalist agend=
a</span><br><span>of individual achievement and wealth accumulation in a &#=
39;rugged</span><br><span>individualist', meritocratic and competitive =
environment.</span><br><span></span><br><span>Bitcoin believers remain obse=
ssed with inflation. Fear of inflation is</span><br><span>typically a middl=
e class syndrome. Price rises and monetary devaluation</span><br><span>have=
a different impact for different societal/economic classes. The</span><br>=
<span>poor suffer at 'ground level' as price increases affect their=
</span><br><span>consumption, and they must see how to make up day-to-day w=
ith their</span><br><span>(low) earnings. But they do not hold wealth. The =
rich, and especially</span><br><span>the super-rich, do hold (a lot of) wea=
lth, but that is usually in the</span><br><span>form of tangible assets or =
ownership deeds (shares, stakes in</span><br><span>enterprises etc.), monet=
ary balances being secondary. It are the middle</span><br><span>classes who=
se holdings (often in the form of savings, e.g. towards their</span><br><sp=
an>pension) are the most at risk. This has been seen in past inflationary</=
span><br><span>and hyper-inflationary bouts, when the nest eggs of the midd=
le classes</span><br><span>were wiped out, resulting in trans-generational =
trauma. The middle class</span><br><span>character of Bitcoin is well demon=
strated by this obsessive fear of</span><br><span>inflation - and their emb=
race of hoarding of a currency that supposedly</span><br><span>'only ca=
n accrue in value'.</span><br><span></span><br><span>The do-it-yourself=
aspect of Bitcoin is part of the free labour</span><br><span>movement. Thi=
s time it is free as in =E2=80=98free of fees=E2=80=99. In keeping with its=
</span><br><span>supposedly 'friction-less' character, Bitcoin is h=
ailed as a uniquely</span><br><span>community-managed adventure, based on t=
he DYI activity of its members.</span><br><span>Only, given the increasingl=
y complex aspect of Bitcoin's principal</span><br><span>occupation, min=
ing, now restricted to a limited number of</span><br><span>(terabyte-)power=
ful entities, it is unclear in what this activity of the</span><br><span>ma=
ny is precisely made of (unless one considers hoarding as work). And</span>=
<br><span>in consonance with the nature of anarcho-capitalism, very little =
is</span><br><span>clear either of what the community exactly consists of -=
or whether it</span><br><span>is a real community at all.</span><br><span>=
</span><br><span>In so far DYI is equivalent to free labour, it is hard to =
fathom how</span><br><span>exactly this works in a set up that is geared to=
wards and based on</span><br><span>(economic) transactions on one side, whi=
le on the other is so greatly</span><br><span>concerned with value and poss=
ession on the other. Given Bitcoiners'</span><br><span>absolute detesta=
tion of fees and other transaction costs charged by 'the</span><br><spa=
n>system', it is interesting to note that Bitcoin, which is supposed to=
do</span><br><span>away with these institutional charges and banking fees,=
actually does</span><br><span>provides for them on (very) small transactio=
ns (but not on large ones,</span><br><span>itself a none too egalitarian fe=
ature), and also that its theoreticians</span><br><span>asserts that when m=
ining will terminate (in 2040, with 21 million</span><br><span>bitcoins in =
circulation) the system will maintain itself ... through</span><br><span>fe=
es.</span><br><span></span><br><span></span><br><span>Lately Bitcoin has re=
ached some sort of cruising speed (however bumpy) =E2=80=94</span><br><span=
>and this not only in the minds of its believers - new problems are</span><=
br><span>popping up in its relationship with 'the real world'. The =
powers that</span><br><span>be, and more specifically their financial/monet=
ary arms, want to</span><br><span>regulate the new kid on the block. A part=
of the Bitcoin 'community' has</span><br><span>decided it wants th=
at too, spurred both by a desire for wider</span><br><span>recognition and =
acceptance, but also because Bitcoin's reputation,</span><br><span>alre=
ady shaky at the best of times, has now been further tarnished by a</span><=
br><span>number of massive, high-exposure scams. Regulation under a central=
,</span><br><span>external authority is, of course, totally at variance wit=
h Bitcoin's</span><br><span>central tenets, and besides being yet anoth=
er blatant example of 'open</span><br><span>contradiction', such mo=
ves have now split the community and the Bitcoin</span><br><span>Foundation=
. And it obviously needs little argument to declare that a</span><br><span>=
regulated Bitcoin degrades into nothing more than yet another new,</span><b=
r><span>ueber-hip and flashy financial vehicle =E2=80=93 which is anyway ho=
w it is</span><br><span>looked at by the 'financial sector'.</span>=
<br><span></span><br><span></span><br><span>Rather sooner than later money =
will be split in two: the morally</span><br><span>bankrupted official ones =
and the informal (local) ones. The need for P2P</span><br><span>payments wi=
ll only increase. By now, the banking system as we know it</span><br><span>=
has become largely dysfunctional for ordinary monetary transactions</span><=
br><span>between small and medium size economic actors. Low interest rates =
and</span><br><span>other factors 'force' banks to levy hefty fees =
and commissions, while on</span><br><span>the other hand, ubiquitous electr=
onic networks hold the promise of next</span><br><span>to transaction costs=
-free transfers of money (and more).</span><br><span></span><br><span>It is=
unavoidable therefore, that ordinary payments will drop out of the</span><=
br><span>cumbersome and expensive banking system and that various other pla=
tforms</span><br><span>will come in its place. This evolution has already s=
tarted, e.g. on the</span><br><span>mobile phone front (think Mpesa for ins=
tance). P2P transactions, whereby</span><br><span>the exchange is entirely =
in the hands of participants, with no middle</span><br><span>instance in be=
tween, are the endpoint of this trend.</span><br><span></span><br><span>Bit=
coin pretends to be the ultimate solution within this fast-paced</span><br>=
<span>transformation of the monetary sphere. We have argued that this</span=
><br><span>contention is very questionable on many practical and social gro=
unds. In</span><br><span>the tradition of software forking (creating simila=
r but different</span><br><span>clones) there is an inevitability of forkin=
g: Bitcoin after Bitcoin</span><br><span>(which will pursue in part II). Th=
e other direction would be to go</span><br><span>=E2=80=98meta=E2=80=99 and=
create an exchange for all the different crypto-currencies</span><br><span=
>(see Ethereum [6]). Regardless, our thesis is that one or the other</span>=
<br><span>might entail a return to the nature of trust, contract vs. distri=
buted</span><br><span>trust, on a 'working scale'.</span><br><span>=
</span><br><span></span><br><span>And let=E2=80=99s not fool ourselves (and=
others): Bitcoin is, in the end, an</span><br><span>accounting system. It =
has a ledger, even though it is a distributed one.</span><br><span>If you c=
ut off mining and the blockchain from Bitcoin (as we propose),</span><br><s=
pan>the problem that remains is called trust. The blockchain =E2=80=94 the<=
/span><br><span>distributed verification algorithm that vouches for the val=
idity of</span><br><span>bitcoins transfers, guaranteeing that no bitcoin i=
s spend twice=E2=80=94is the</span><br><span>nearest approximation of the D=
ivine in the Bitcoin religion (and, we</span><br><span>found out to our dis=
may, in next to all other future, planned</span><br><span>crypto-currencies=
we have come across) [7]. It is also the most</span><br><span>important of=
the general weaknesses in the Bitcoin model, since it</span><br><span>assu=
mes the permanency of powerful, always online computers/server</span><br><s=
pan>farms/cloud services that supposedly no one pays for, and of the whole,=
</span><br><span>complex and fragile infrastructure that sustains them.</sp=
an><br><span></span><br><span>It is also the mainstay of Bitcoin's infl=
exible faith in algorithms and</span><br><span>machines above the =E2=80=94=
always fallible, and crookedly inclined =E2=80=94 human</span><br><span>be=
ing, another reminder of its solidly 'Anglo' origins. Other systems=
</span><br><span>may well want to do away with the blockchain as implemente=
r of 'designed</span><br><span>trust'[8], but is that realistic? Th=
e problem then is where to position</span><br><span>that trust - which is t=
he imperative constituent of any monetary system.</span><br><span>This brin=
gs us back to the scalability issue, which basically says that</span><br><s=
pan>as the number of participants in a system grows, the need for an</span>=
<br><span>impartial, 'enforced authority' (which however needs to b=
e voluntarily</span><br><span>accepted) rapidly increases, soon becoming ma=
ndatory.</span><br><span></span><br><span>Needless to add that Bitcoiners f=
orcefully reject this argument, in</span><br><span>their absolute belief of=
the ('rugged') individual and the distributed.</span><br><span>Sin=
ce the argument itself is grounded on values/beliefs, no conclusive</span><=
br><span>elucidation can be arrived in the matter - beyond pointing out to =
the</span><br><span>irrefutable smallness of the factual Bitcoin constituen=
cy, both actual</span><br><span>and ideal.</span><br><span></span><br><span=
></span><br><span>Farewell, Winkelvoss Bros. The future of Bitcoin is brigh=
t but will come</span><br><span>after Bitcoin. The advance of small scale d=
igital (crypto)currencies</span><br><span>that operate within a specific so=
cial setting (be it local or</span><br><span>translocal), either labeled al=
ternative or complementary, is definitely</span><br><span>unstoppable. Howe=
ver, as we have seen before, the trickiest part, in</span><br><span>terms o=
f adoption and economic effectiveness, is their relation with the</span><br=
><span>'real existing' money (termed as =E2=82=AC, =C2=A3, $, whate=
ver...), and in this,</span><br><span>complementary currencies are much mor=
e flexible than alternative ones.</span><br><span>Bitcoin wants to belong t=
o the latter category, and is moreover prone to</span><br><span>rather robu=
st speculative stints - up and down - in its relationship</span><br><span>w=
ith 'real' money.</span><br><span></span><br><span>However, technol=
ogical advances to which the current banking system is</span><br><span>ill-=
prepared, especially at the 'retail' level (never mind the not</spa=
n><br><span>improbable collapse of the financial/monetary system as we know=
it),</span><br><span>makes that non-banking, and possibly non-centrally re=
gulated, electronic</span><br><span>payment systems will win the day, espec=
ially in the realm of</span><br><span>transactions by or between individual=
s. Banks want to get rid of</span><br><span>individual, private, 'littl=
e guy' customers anyway, they are a nuisance</span><br><span>with their=
puppet house payments. Profit margins remain too low in the</span><br><spa=
n>consumer sector, despite the rise in fees. When and how this will all</sp=
an><br><span>=E2=80=98flip=E2=80=99 remains a matter of speculation and dep=
ends on a lot of factors,</span><br><span>including political ones.</span><=
br><span></span><br><span>What is less speculative, however, is that the cu=
rrency/ies that will</span><br><span>emerge will not be denominated Bitcoin=
, at least not in its current</span><br><span>representation. Bitcoin, howe=
ver, and that might be its greatest and</span><br><span>undeniable merit, h=
as very much accelerated the thinking about this</span><br><span>evolution,=
has spawned a multitudes of parallel solutions, and has, both</span><br><s=
pan>on the social as well as on the technical plane, by trial and error,</s=
pan><br><span>cleared a lot of ground for others in this process.</span><br=
><span></span><br><span>Why can we communicate on a global level, but not p=
ay? We can</span><br><span>communicate on a global level, though it is less=
frictionless than is</span><br><span>often thought (try Central Congo, for=
one). The higher the degree of</span><br><span>'development', the =
smoother communications are. The same applies to</span><br><span>money tran=
sfers, which, in Northern Europe at last, are almost</span><br><span>fricti=
on-free and largely costless. In this context the problem resides</span><br=
><span>much more with the banking system, wavering on the verge of collapse=
due</span><br><span>to its extreme (and excessive) financialisation, than =
with the existing</span><br><span>payment infrastructure itself, which, if =
run like an utility, and its</span><br><span>costs born out of public funds=
, could be largely seamless and free of</span><br><span>charge.</span><br><=
span></span><br><span>Since this is not the case, and most probably will no=
t be in any</span><br><span>conceivable future, all kinds of new, mostly (I=
nter)net-born formats</span><br><span>will continue to arise, Bitcoin being=
just one of the first and most</span><br><span>emblematic. Or as one of it=
s promoters says: "Bitcoin only represents</span><br><span>the first w=
ave of game-changing technological innovations to come",</span><br><sp=
an>adding for good measure that "the technology behind (B)itcoin canno=
t be</span><br><span>legislated away". Nor that of many more formats.<=
/span><br><span></span><br><span>Large-scale use of mobile money in parts o=
f Africa provide an</span><br><span>interesting =E2=80=98Lehrst=C3=BCck=E2=
=80=99, one that is not easily transferable to other</span><br><span>parts =
of the world where the banking system has a tight grip on the</span><br><sp=
an>economy. What mobile money does have in common with Bitcoin is the</span=
><br><span>larger techno-historical movement from communication to payment.=
Because</span><br><span>Bitcoin is 100% internet-based it does not see its=
elf as an extension of</span><br><span>the world od commercial telecom prov=
iders. Mobile money does. Such</span><br><span>anthropological comparisons =
can be productive and reveal implicit</span><br><span>cultural values hidde=
n in the shiny interfaces and self-evident</span><br><span>processual knowl=
edge.</span><br><span></span><br><span>Bitcoin, as an anarcho-capitalist ex=
periment, does not scale and was</span><br><span>perhaps never meant to. Pe=
rhaps this was not even desirable in the first</span><br><span>place and cl=
aims need to be downsized accordingly. If Bitcoin was</span><br><span>=E2=
=80=98merely=E2=80=99 going to be a (built-in) payment protocol, for instan=
ce inside</span><br><span>HTML, it would be a bold undertaken. A first step=
would be to strip off</span><br><span>its libertarian mining ritual and bl=
ockchain religion =E2=80=94 and then see</span><br><span>what=E2=80=99s lef=
t. Right now, crypto currencies are the avant-garde of our</span><br><span>=
age. In line with the Zeitgeist the avant-garde this time is neither</span>=
<br><span>progressive nor artistic but technical and entrepreneurial, willi=
ngly or</span><br><span>not fueling the growing social inequality. No esthe=
tics please, we=E2=80=99re</span><br><span>strictly conceptual. And if ever=
ything fails, Bitcoin can always</span><br><span>retrospectively go into hi=
story as an artwork, a true social sculpture</span><br><span>(courtesy to D=
uchamps, Beuys and Jaromil).</span><br><span></span><br><span>(to be contin=
ued in part II)</span><br><span></span><br><span>=E2=80=94</span><br><span>=
</span><br><span>[1] Ippolita, In the Facebook Aquarium, Institute of Netwo=
rk Cultures,</span><br><span>Amsterdam, 2015.</span><br><span></span><br><s=
pan>[2] Geek suprematism, run by an =E2=80=98algocracy=E2=80=99,</span><br>=
<span><a href=3D"http://philosophicaldisquisitions.blogspot.nl/2014/01/rule=
-by-algorithm-big-data-and-threat.html" target=3D"_blank">http://philosophi=
caldisquisitions.blogspot.nl/2014/01/rule-by-algorithm-big-data-and-threat.=
html</a>.</span><br><span></span><br><span>[3] =E2=80=9CIf it looks like a =
duck, swims like a duck, and quacks like a duck, then</span><br><span>it pr=
obably is a duck.=E2=80=9D More on</span><br><span><a href=3D"http://en.wik=
ipedia.org/wiki/Duck_test" target=3D"_blank">http://en.wikipedia.org/wiki/D=
uck_test</a>"<a href=3D"http://en.wikipedia.org/wiki/Duck_test" target=
=3D"_blank">http://en.wikipedia.org/wiki/Duck_test</a>.</span><br><span></s=
pan><br><span>[4] 21 m at the most, which, when fractioned by 9 positions</=
span><br><span>behind the zero, gives a maximum of 220 bn units of micropay=
ment (say, the</span><br><span>equivalent of 1=C2=A2 US) at a conservative =
valuation of Bitcoin at US$ 100</span><br><span>per unit. Going by the 1 Do=
llar - 100 cents division of currency, this</span><br><span>results</span><=
br><span>in a total maximum amount of 2.2bn 'Bitcoin Dollars', or a=
somewhat</span><br><span>diminutive</span><br><span>economy by all means (=
please do the math yourself - and correct us if wrong).</span><br><span></s=
pan><br><span>[5] Official site: <a href=3D"http://www.wir.ch/" target=3D"_=
blank">http://www.wir.ch/</a> (in German, French or Italian</span><br><span=
>only) Wikipedia entry in English (but disputed):</span><br><span><a href=
=3D"https://en.wikipedia.org/wiki/WIR_Bank" target=3D"_blank">https://en.wi=
kipedia.org/wiki/WIR_Bank</a></span><br><span></span><br><span>[6] See: <a =
href=3D"https://en.wikipedia.org/wiki/Ethereum" target=3D"_blank">https://e=
n.wikipedia.org/wiki/Ethereum</a>.</span><br><span></span><br><span>[7] See=
especially Eduard de Jong's presentation at the MoneyLab</span><br><sp=
an>conference:</span><br><span><a href=3D"http://networkcultures.org/moneyl=
ab/2014/03/23/edward-de-jong-towards-an-open-e-currency-system/" target=3D"=
_blank">http://networkcultures.org/moneylab/2014/03/23/edward-de-jong-towar=
ds-an-open-e-currency-system/</a></span><br><span></span><br><span>and arti=
cle "One Chain to Rule Them all":</span><br><span><a href=3D"http=
://networkcultures.org/moneylab/2014/12/16/one-chain-to-rule-them-all/" tar=
get=3D"_blank">http://networkcultures.org/moneylab/2014/12/16/one-chain-to-=
rule-them-all/</a></span><br><span></span><br><span>[8] Caroline Nevejan, P=
resence and the Design of Trust, PhD dissertation</span><br><span>Universit=
y of Amsterdam, 2007. URL: <a href=3D"http://nevejan.org/presence/" target=
=3D"_blank">http://nevejan.org/presence/</a>.</span><br><span></span><br><s=
pan></span><br><span></span><br><span></span><br><span># =C2=A0distributed =
via <nettime>: no commercial use without permission</span><br><span>#=
=C2=A0<nettime> =C2=A0is a moderated mailing list for net criticism,=
</span><br><span># =C2=A0collaborative text filtering and cultural politics=
of the nets</span><br><span># =C2=A0more info: <a href=3D"http://mx.kein.o=
rg/mailman/listinfo/nettime-l" target=3D"_blank">http://mx.kein.org/mailman=
/listinfo/nettime-l</a></span><br><span># =C2=A0archive: <a href=3D"http://=
www.nettime.org" target=3D"_blank">http://www.nettime.org</a> contact: <a h=
ref=3D"mailto:nettime at kein.org" target=3D"_blank">nettime at kein.org</a></spa=
n><br></div></blockquote></div><br>________________________________________=
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NetworkedLabour mailing list<br>
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et=3D"_blank">http://lists.contrast.org/mailman/listinfo/networkedlabour</a=
><br>
<br></div><br><br clear=3D"all"><div><br></div>-- <br><div class=3D"gmail_s=
ignature"><div dir=3D"ltr"><div>Check out the Commons Transition Plan here =
at:=C2=A0<a href=3D"http://en.wiki.floksociety.org/w/Research_Plan" target=
=3D"_blank">http://en.wiki.floksociety.org/w/Research_Plan</a>=C2=A0</div><=
div><br></div>P2P Foundation: <a href=3D"http://p2pfoundation.net" target=
=3D"_blank">http://p2pfoundation.net</a>=C2=A0 - <a href=3D"http://blog.p2p=
foundation.net" target=3D"_blank">http://blog.p2pfoundation.net</a> <br><br=
><a href=3D"http://lists.ourproject.org/cgi-bin/mailman/listinfo/p2p-founda=
tion" target=3D"_blank"></a>Updates: <a href=3D"http://twitter.com/mbauwens=
" target=3D"_blank">http://twitter.com/mbauwens</a>; <a href=3D"http://www.=
facebook.com/mbauwens" target=3D"_blank">http://www.facebook.com/mbauwens</=
a><br><br>#82 on the (En)Rich list: <a href=3D"http://enrichlist.org/the-co=
mplete-list/" target=3D"_blank">http://enrichlist.org/the-complete-list/</a=
> <br></div></div>
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