Coindesk published an interesting essay by Nozomi Hayase, which is a revealing recitation of a “Bitcoin Narrative”.
The central theme in this story is “cryptocurrencies for economic self-determination.” He cites different cases, who share only an enthusiasm for Bitcoin as a means to advance their own underdog case.
He then tells a story about “trust”, which actually seems synonymous with “authority”.
“Bitcoin’s decentralized trust eliminates the need for any centralized authority and brings the source of legitimacy in the realm of finance back to individuals.”
”By choosing to abide with algorithmic consensus, we participate in creating a society based on our trust in ourselves and our fellows.”
This is actually a brilliantly clear statement of this central theme in this story: some how computers and “our fellows” are more trustworthy than conventional authorities.
I have made clear before that this is a naïve and fundamentally flawed conception of “trust”. But cultural narratives are more about who we want to be than logic.
Hayase continues to laud the ease with which Bitcoin flows across all borders and limits. To the degree that this is true, it is the most dangerous feature for many reasons. He extols the alleged value of Bitcoin for remittances, and blasts the current system which is allegedly run by profiteering “monopolies”. No mention of money laundering or the problems created by “hot money”.
He then bangs the drum for Bitcoin as “the bank-less and government-less currency of the oppressed.” Notably, this is seen as a populist response to “in places where governments tightly control the currency and hyper-inflate hard earned work and value through harsh austerity and money printing.” He’s thinking of Argentina, Iceland, Spain. Places where unfettered financial movements crashed the economy.
Hayase winds up with a rousing, if logically confused, call for the marginalized to escape “systems of Western financial hegemony”, and to empower the “unbanked” and those “underbanked” “due to radical currency debasement as well as a lack of small business investment capital and high transfer fees”.
“The time has come for us to reclaim the power of self-determination and build our common future through this flow of networked trust.”
Wow!
Full marks for stating the arguments clearly.
I’m not going to debate these points in detail, though they are riddled with errors and flawed assumptions. (For example: Bitcoin is usually described as “trustless”. Hayase more correctly describes it as “networked trust”. This is a huge difference.)
Most of these concepts are not new, but apparently Bitcoin has been a catalyst to state and act out particular combinations. It is particularly interesting to find complaints about “Western hegemony” tied to solutions involving unfettered capitalism. Phew!
There are several points I will make.
First, he completely equates “blockchain”, “cryptocurrency”, and “Bitcoin”. As I have pointed out many times, there can be, and are, many cryptocurrencies. Many of the populist cases he cites (Lakota, Argentina) have seen the rise of their own “national” cryptocurrencies. He does not consider this, and implicitly accepts a global “gold standard” Bitcoin as the correct solution. If the goal is self-determination, then your own cryptocurrency seems arguably better than Bitcoin.
Second, this “power to the people” narrative is only one of at least three different “stories” about Bitcoin.
There is, and always has been, enthusiastic adoption by extralegal enterprises including drugs and arms trafficing, stolen property markets, and increasingly cyber extortion. This offshore “pirate” theme is in no way interested in or good for the poor and powerless. If Bitcoin ended up replacing the “tyranny” of Western Union or the central bank of Argentina with systems run by international mafias it would not really be a step forward.
The other major theme is revolutionizing conventional finance, for example through micropayments, point of sale consumer commerce, and blockchain-based financial instruments. This “disruption” theme attracts venture capitalists and joint ventures by banks and other institutions. These folks need to stay right with the law, and indeed benefit from solid regulation. Ordinary consumers will not be satisfied with a dark net, and legitimate banks care about both stability and reputation.
I note that the original Bitcoin community was “miners”, who have their own universe of concerns about exchange rates and technical arms races. These topics are fading for most Bitcoinistas as “mining” has become capital intensive professional operations (and, ironically, increasingly opaque and centralized).
These alternative “narratives” all call upon Bitcoin and/or blockchains as the technical foundation, but have rather different goals and requirements. Tension is quite apparent at Bitcoin and other meetings, especially around the emerging application of conventional financial regulations.
In a sense, this is a sign of the growth and maturation of Bitcoin: communities fragment as they grow larger, and cryptocurrency is useful for many purposes.
I also think it is time to stop thinking of “the Bitcoin community” or “Bitcoin users” as if they are a single, coherent group. Clearly, there are multiple “stories” being told and acted out by Bitcoin, and increasingly by variations of blockchain technology.