<div dir="ltr">fyi<br><br><div class="gmail_quote">---------- Forwarded message ----------<br>From: <b class="gmail_sendername">Michel Bauwens</b> <span dir="ltr"><<a href="mailto:michel@p2pfoundation.net">michel@p2pfoundation.net</a>></span><br>
Date: Fri, Aug 8, 2014 at 12:04 AM<br>Subject: saw your tweet, here is a update on bitcoin<br>To: Hilary Wainwright <<a href="mailto:wainwright.hilary@gmail.com">wainwright.hilary@gmail.com</a>><br><br><br><div dir="ltr">
<h1>Moving beyond Bitcoin</h1>
<p><br>
</p>
<p>Bitcoin is a complex phenomenom, and it is a landmark development,
even a technological singularity, for good or ill. At the P2P
Foundation, we also have complicated feelings about it.</p>
<p><br>
</p>
<h2>The Positive Aspects of Bitcoin</h2>
<p><br>
</p>
<p>Let us first summarize why Bitcoin is indeed such a singularity.</p>
<p><br>
</p>
<ol>
<li><p><b>Bitcoin is the first globally scaleable, social-sovereign,
post-Westphalian currency</b></p>
</li></ol>
<p><br>
</p>
<p>This is not trivial. Before the Treaty of Westphalia, local
currencies where the norm, many with negative interest rates, and
they bolstered local independence, but the scaling effects of the
printing press, which led to a Europe-wide religious civil war, made
necessary a re-organization of the political space around the
emerging nation-states. These nation-states outlawed local
currencies, destroyed local autonomy, and also relied on sovereign
currency to establish their power. While local currencies have a
periodic resurgence in times of crisis, none of the complementary
currencies scaled. Local currencies can therefore never be the
expression of global commons power, i.e. the power of global virtual
communities. Bitcoin has no intrinsic value, it is a hyper-fiat
currency, i.e. it only exists because of the trust and political will
of the international libertarian hacker segments of the population,
in the particular algorithm.</p>
<p><br>
</p>
<p><br>
</p>
<p><br>
</p>
<ol start="2">
<li><p><b>Bitcoin is a weapon of last resort for activist
communities</b></p>
</li></ol>
<p><br>
</p>
<p>The mainstream monetary and payment system is at the service of a
particular world order, and can be mobilized against opposition to
it, as became very clear around the Wikileaks affair, where banks,
VISA and Paypal collaborated with various authorities to block the
fundraising for Wikileaks. In such times, access to alternatives like
Bitcoin is vital for activist groups, it becomes their lifeline to
funding outside of the control of the central authorities.</p>
<p><br>
</p>
<p><br>
</p>
<ol start="3">
<li><p><b>The potential of the Bitcoin ledger as a tool for human
self-organization</b></p>
</li></ol>
<p><br>
</p>
<p>Apart from being a currency, the underlying universal ledger
technology of Bitcoin has potential to usher in a new era of more
easy self-organisation, by enabling the possibility of smart
contracts and software-driven 'distributed autonomous organisation,
as expressed by initiatives like Ethereum, Common Accord, and the
crypto-equity experiment of Swarm. Though these developments and
possibilities are not without danger, and though most of the current
enthusiasm is utopian and mostly based on hopes and just a few
budding experiments, this technology is potentially a game changer by
bringing down the transaction cost for self-organization.</p>
<p><br>
</p>
<p><br>
</p>
<p><br>
</p>
<p><br>
</p>
<p><br>
</p>
<h2>The Negative Aspects of Bitcoin</h2>
<p><br>
</p>
<p>Notwithstanding the above, Bitcoin's development comes with a
potentially very high and anti-social price tag.</p>
<p><br>
</p>
<p><br>
</p>
<ol>
<li><p><b>Bitcoin is not a true peer to peer currency but leads to
more extreme inequality</b></p>
</li></ol>
<p><br>
</p>
<p>It is sometimes asserted that Bitcoin is a peer to peer currency
because any computer with mining software can create the currency,
but not everyone has access to the same number of computers and not
everyone has computers, hence, the design of Bitcoin, which favours
early entrants and those with investing power, is an engine of
inequality. Bitcoin's Gini coefficient, a metric of inequality, is a
whopping <font color="#000000"><font face="Ubuntu, Lucida Grande, Verdana, Arial, sans-serif"><font style="font-size:9pt">0.87709 </font></font></font>
and according to Bitcoinica, 1% of the players own 50% of the
coins.<a name="147b16dc948e447d_sdfootnote1anc" href="#147b16dc948e447d_sdfootnote1sym"><sup>1</sup></a>
That inequality is not diminishing, but rising: according to Bitcoin
Trader, for a given period, “<font color="#000000"><font face="Ubuntu, Lucida Grande, Verdana, Arial, sans-serif"><font style="font-size:9pt">the
top 100 have gone from holding 1,776,434 coins to holding 2,254,634
Bitcoins, a whopping 27% increase!”<a name="147b16dc948e447d_sdfootnote2anc" href="#147b16dc948e447d_sdfootnote2sym"><sup>2</sup></a>
The mining capacity is also already concentrated.</font></font></font></p>
<p><br>
</p>
<p><br>
</p>
<p><br>
</p>
<ol start="2">
<li><p><b>Bitcoin can't lead on its own to a disintermediated
society</b></p>
</li></ol>
<p><br>
</p>
<p>We live in an epoch of techno-utopianism with a strong drive for
techno-cracy. The former means that many believe that technology
alone determines certain outcomes, while the latter believes it is a
good thing that flawed human processes are replaced by 'clean'
technological processes. Both attitudes are very dangerous. First,
distributed technologies do not necessarily lead to distributed
outcomes. We have seen this historically with the effect of the
invention of printing, which led to a democratisation of knowledge
and literacy, but also in time replaced the local autonomy of free
medieval cities with much stronger and controlling nation-states,
i.e. more political centralization, not less. Networks which have no
counter-measures to maintain equality inevitably lead in time to a
new concentration of resources. Hence, in Amazon and iTunes, the
so-called long tail of culture consumption predicted by Chris
Anderson is no longer operative, and in p2p social lending, 80% of
loans are provided by big bangs and institutions, the very forces the
technology was supposed to disintermediate. Again and again, we see
that the potential disintermediation of power, which may affect
established powers, creates new intermediaries, such as the platform
monopolies. Technologies are indeed, used by social forces, who
inflect technologies for their own needs. The inequality of bitcoin
ownership will inevitably further affect the structures that make
bitcoin operational, leading to new kinds of monopolies. Technologies
are always infused with human values, no programming or
infrastructure is truly neutral in that respect.</p>
<p><br>
</p>
<p><br>
</p>
<ol start="3">
<li><p><b>Bitcoin funds a dangerous ideology</b></p>
</li></ol>
<p><br>
</p>
<p>The big danger to the social movements of the industrial era were
fascism and stalinism, both forms in which the power of the state
became extreme. But what fascism is to the state, propertarian
libertarians are to the markets: they aim for the realization of a
total market, where every aspect of human life is commodified. The
design of Bitcoin is anarcho-capitalist, i.e. it is designed to
favour the freedom of property owners, and the more you own, the
freeer you are. Because such propertarians do not want to see the
existing inequalities in society, decreeing them to be the result of
free choice, they inevitably ally themselves with oligarchic forces
and support their political programs of the dismantling of social
solidarity mechanism, and any regulation which limits the freedom of
powerful corporate forces. The valuation of Bitcoin means an
important transfer of social wealth to this political tendency, which
allied with venture capital and the oligarchies that invest in
Bitcoin, alters the balance of power away from emancipatory and
progressive political forces. Early libertarian investors in Bitcoin,
can sell their bitcoins at a premium to new entrants, thereby
capturing substantial speculative value. So while the claim that
Bitcoin is a pyramid scheme is obviously false, it does institute a
rent from new entrants to existing owners. In this sense, Bitcoin,
far from being a tool of distribued equality, which is already a
false empirical claim at present, is an ideal tool for the
development of hyper-capitalist economic models. In this sense,
Bitcoin is an ideal tool for netarchical capitalism, the hierarchies
that enable, but also control the networks, and capture value from
it.</p>
<p><br>
</p>
<p><br>
</p>
<h2>In Conclusion</h2>
<p><br>
</p>
<p>Despite all the drawbacks mentioned, Bitcoin remains a landmark
and pivotal development, showing that globally scaleable currencies
are technically feasible. It sets the stage for potential
commons-based p2p-driven currency systems and the Bitcoin ledger can
become a tool for self-organizing communities.</p>
<div>
<p><a name="147b16dc948e447d_sdfootnote1sym" href="#147b16dc948e447d_sdfootnote1anc">1</a><a href="http://ow.ly/trKoy" target="_blank">http://ow.ly/trKoy</a></p>
</div>
<div>
<p><a name="147b16dc948e447d_sdfootnote2sym" href="#147b16dc948e447d_sdfootnote2anc">2</a><a href="http://www.thebitcointrader.com/2011/10/is-it-time-to-occupy-bitcoin-street.html" target="_blank">http://www.thebitcointrader.com/2011/10/is-it-time-to-occupy-bitcoin-street.html</a></p>
<span class="HOEnZb"><font color="#888888">
</font></span></div><span class="HOEnZb"><font color="#888888"><div><br></div>-- <br><div dir="ltr"><div><b>Please note an intrusion wiped out my inbox on February 8; I have no record of previous communication, proposals, etc ..</b></div>
<div><br></div>P2P Foundation: <a href="http://p2pfoundation.net" target="_blank">http://p2pfoundation.net</a> - <a href="http://blog.p2pfoundation.net" target="_blank">http://blog.p2pfoundation.net</a> <br>
<br><a href="http://lists.ourproject.org/cgi-bin/mailman/listinfo/p2p-foundation" target="_blank"></a>Updates: <a href="http://twitter.com/mbauwens" target="_blank">http://twitter.com/mbauwens</a>; <a href="http://www.facebook.com/mbauwens" target="_blank">http://www.facebook.com/mbauwens</a><br>
<br>#82 on the (En)Rich list: <a href="http://enrichlist.org/the-complete-list/" target="_blank">http://enrichlist.org/the-complete-list/</a> <br></div>
</font></span></div>
</div><br><br clear="all"><div><br></div>-- <br><div dir="ltr"><div>Check out the Commons Transition Plan here at: <a href="http://en.wiki.floksociety.org/w/Research_Plan" target="_blank">http://en.wiki.floksociety.org/w/Research_Plan</a> </div>
<div><br></div>P2P Foundation: <a href="http://p2pfoundation.net" target="_blank">http://p2pfoundation.net</a> - <a href="http://blog.p2pfoundation.net" target="_blank">http://blog.p2pfoundation.net</a> <br><br><a href="http://lists.ourproject.org/cgi-bin/mailman/listinfo/p2p-foundation" target="_blank"></a>Updates: <a href="http://twitter.com/mbauwens" target="_blank">http://twitter.com/mbauwens</a>; <a href="http://www.facebook.com/mbauwens" target="_blank">http://www.facebook.com/mbauwens</a><br>
<br>#82 on the (En)Rich list: <a href="http://enrichlist.org/the-complete-list/" target="_blank">http://enrichlist.org/the-complete-list/</a> <br></div>
</div>