Bitcoin revisited – Personally I am not a betting man

*Warning: I have decided to swear in this post, so don’t read if you don’t like the accoutrements of foul language 🙂

There has been a lot of hype recently about something called Bitcoin, if you haven’t heard or don’t know what it is then go use a search engine and find out. I am putting together this post for the simple reason that I have come across three sources that I find any value in with regards to Bitcoin, but I think there is a bit missing that I came across in my own short foray into Bitcoin.

The nitty gritty personal bitchin (unpolished human parts are also important!)

Last year I was on the speaker list for the Bitcoin Conference 2012 which gave me a small peek into some key players and some key ‘human’ aspects of Bitcoin I wouldn’t have otherwise gotten. This had been my main aim after some awkwardness trying to tackle Bitcoin the technology, I wanted a whiff of Bitcoin the community.

My talk was not delivered well at all, and wasn’t really matched to its audience (this was before I had been illuminated by ‘teacher training’ into better ways of participating with a group of people). It was a essentially a summary of a number of key texts that had two simple aims 1) To get answers to my questions, and 2) to present to bitcoiners the idea that understanding their own place in historical political economy would be beneficial.

Unfortunately I was only just getting to grips with some of the relevant parts myself, and my talk came across as polemical. Added to this I was cut short by the organiser at hand, who said my 20mins was up when clearly I had barely used 15mins, the only temporary answer I have surmised is that my talk didn’t masturbate Bitcoin in some way and it was getting some of the audience to actually assess the necessity of critical analysis, even if not delivered well. I could be wrong but no other reason was given.

I witnessed the same reaction when I was asked by a very amiable chap who worked for bitcoin magazine to submit a summary form of my talk as an article. Unfortunately one of the ‘bigger’ editors clamped down and said that although he appreciated the ‘anthropological gaze’ (whatever the fuck that is) my article was ‘obnoxious’. I politely said that that had not been my aim but no further conversation ensued. Yes I was little bitter after working hard to put something legible together when I am not a natural writer (I also pointed out AFTER this part of the conversation that perhaps they could apply some ‘anthropological gaze’ to some previous articles they had published such as a summary of Milton Friedman’s bullshit on big white stones).


The key sources

  1. How important are the agency exerting qualities of an item being exchanged?
  2. How important is it for an exchange form to be decentralised from both sides of the market-state coin?
  3. How important is it for an exchange form to generate its own value (perhaps in the sense of a human economy) aside from the value of proprietary currency?
  4. Does the savings aspect of bitcoin correlate with strengthening a human economy?
  5. How important is the decryption of Bitcoin relations? In the sense of understanding the weave of relationships that make it happen.

My issues in brief with the above, and what I want to add

If you have read those key sources then a key statement in Jaromil’s paper is the following:

“Bitcoin promises to be the neutral medium for an economy based on participation, not the edict of a king, a central bank, or their authorized intermediaries – nevertheless, it must be said, Bitcoin did create new riches, those who believed earlier than others in the promise of this algorithm. The rupture offered by this new perspective on money is not dealing with equality or welfare, it might not benefit society or help us get out of the crisis: it is a protest for network neutrality.”

Precisely. Bitcoin is not the answer to the problems that people mistakenly invest in ‘money’, because that is a double fetishisation of technologies; firstly ‘money’ and secondly ‘bitcoin technology’. However it is an interesting experiment that is part of humans continued innovative character and should not be outright ‘put-down’. It is not just a Ponzi scheme to be rubbished (even though that aspect of it has recently bust and I think will inflate a few more times again. I am not a betting man though so I try not to participate in ‘money’ gambling).

As Jaromil points out the aspect of ‘forking’ bitcoin is what is interesting, where the potential for the technology behind bitcoin to mould and adapt to different communities necessities will bear fruit. Essentially the ‘Coin’ in Bitcoin is becoming a big bag of inflationary hot air that has been subsumed into the investment cartel or unfortunates of our world.

However though not unique, the part that is interesting is the leverage that can be achieved by technologically making the following possible:

“All of the Generals start working on a mathematical problem that statistically should take 10 minutes to solve if all of them worked on it. Once one of them finds the solution, she broadcasts that solution to all the other Generals. Everyone then proceeds to extending that solution – which again should take another ten minutes. Every General always starts working on extending the longest solution he’s seen. After a solution has been extended 12 times, every General can be certain that no attacker controlling less than half the computational resources could have created another chain of similar length. The existence of the 12-block chain is proof that a majority of them has participated in its creation. We call this a proof-of-work scheme.” (source)

That is essentially what is cool about Bitcoin and if it can be applied with the critical analysis that my above questions bring then it may help a community. It is not a means and definitely not an end. Its an experiment in trying something out.

On a slightly different note, what struck me about bitcoin was the absolutely hilarity of revolutionary claims when it is becoming evermore a symbiotic mechanism to create value out of thin air through the number of ‘exchanges’ where you could swap your bitcoins for dollar back and forth, and so become rich in ‘dollar’ terms but essentially degenerate the ‘human’ value a community might bring. I was also struck when I met a young gentleman who had invested a large amount in bitcoins which had then disappeared in the Bitcoinica scandal. The common story is that some hackers went stole a load of bitcoins from the Bitcoinica exchange. More interesting perhaps is to look at the polity of the situation where you have a few adolescent programmers fronting a scheme that took peoples money and lost it, gave no compensation, ignored requests for some explanation, reopened under a different name and continued to make some absurd claims to some new found revolutionary awesomeness. This is just one anecdote I noted of the varied bitcoin community that Jaromil fails to cover in his commentary on community in his article, as his narrative unfortunately does not draw on rigourous holistic analysis.

Buy ey, when you get a non-homogenous community that shares one commonality ‘Fuck Politics’ or ‘Fuck Politics (in the process of  getting what I want)’ – trust me there is variety, at least the unhelpful Left-Right labelling doesn’t work – well what you get is what we have today, those that take advantage and those with bigger dreams. Its not Anarchy.

The anthropological bit

We create new ‘technologies’ by bridging (i) ‘the junction between the power to make (or unmake) [an environment]’ and (ii) ‘the social and ritual capacities for regulation, through which making is governed’ (Paul Richards 2009:495). The challenge is to overcome the assumption that (i) human meaning and values are totally socially-constructed amongst people, unhinged from bodily technologies and the tangible environment, or (ii) that what is creative and new are the tangible ‘technologies’ in and of themselves (ibid.:507). Otherwise the first assumption submits technologies and the tangible environment to a relationship of brute submission to human agency e.g. ‘a means to an end’ (Bruno Latour 2002); or in the second assumption, the power of technology is fetishized in the tangible so as to assume the mantle of human agency. Neither of these promote a relationship in which technologies and the tangible environment are accurately understood and meaningfully harnessed.

In summary

I maintain that Bitcoiners invest a little less time in decrypting and mining bitcoins and little more in mining and decrypting the glocal, historical, political economic, socio-cultural, sociotechnical etc relationships they are in, SO that when its ‘forkers’ apply themselves they do so from a state of being that isn’t full of BS naratives, but rather conducive to the potential creation of emergent technologies that can be harnessed by communities rather than be yoked, mystified, or distracted by them.

Credit for a great photo to John Leuba