The above image was made with stable diffusion using the prompt 'Bitcoin in a forest.'
Under the current regime, politically unpopular people and groups may be financially attacked by governments working in concert with financial services companies. While these attacks are usually directed at individuals or individual companies, they sometimes happen on a larger scale, as happened when Canada froze hundreds of accounts connected to a national protest of vaccine mandates. This episode proved that our money is unsafe as long as modern governments are able to weaponize our financial infrastructure against those with unpopular views.
Here in the US, the government established a financial blockade of Wikileaks after the organization published documentation of US military war crimes, including the murder of two Reuters journalists. As a result of this blockade, Wikileaks' bank stopped providing services. Paypal and MasterCard and Visa refused to process transactions. This financial attack could have abruptly ended the publishers' operation. But instead of folding, Wikileaks embraced bitcoin in 2011 and survived for several additional years. This episode proved that crypto can be unstoppable, even against a world superpower.
Many view bitcoin and similar crypto tokens as commodities, like digital gold. From this perspective, it's the scarcity of the token that guarantees its value. While this view has merit, it doesn't really support the idea of a future that's both more free and more fair. Rather, it promises only more of the same, but in digital form.
Here's a quote from Zero is the Future of Money by Brett Scott:
The commodity orientation to money requires you to believe that people need to be induced into trade by dangling something of value in front of them. Credit thinking, by contrast, recognises that people are tied into non-optional interdependent networks, within which they'll often have to 'go negative' to get access to the goods they need to survive before they can produce anything. Picture your lungs telling your heart that before it can oxygenate the blood required by the heart's tissues, it needs energy delivered to its tissues via a pump of the heart. At a systemic level, there鈥檚 no fundamental separation between these interdependent parts in your body, and there鈥檚 no need for one part to 'convince' the other to help through some kind of incentive system. You can choose to imagine that your lungs and heart are 'trading' with each other, but it鈥檚 actually an inescapable form of cooperation.
In the real world, money is both artificially scarce and required for us to meet our basic needs. Because of this, most of us can't behave as rational actors in the economy. Instead, we are perpetually under duress, coerced into entering into contracts that benefit wealthier counterparties at our expense.
Cryptocurrencies as they presently exist could theoretically relieve some of this pressure by creating new money where it's needed in the economy. But that's not how they're being used. While some are used for utilitarian purposes in online systems or to skirt the control regime's stranglehold on finance, many are treated purely as vehicles for speculative investment. Crypto promises freedom, but it's delivering something less than that.
At its core, crypto is money without banks or governments. Making sense of that requires a shift in perspective. Yet a much larger shift in perspective is called for if we want crypto to truly live up to its promise of freedom. Brett Scott's credit thinking seems like a step in the right direction. But I think that our broader situation calls for an even more fundamental shift in how we understand money.
Money is essentially a way of keeping track of the relative social power of financial entities in the legacy economic system. National currency isn't the only way to keep track of relative social power, nor is it necessarily the most efficient. And the control regime sometimes weaponizes national currency against freedom. This situation calls for better currency alternatives. New technology has made developing these alternatives technically possible. But even the best tech is going to fall flat in the absence of an alternative social system in which to put the new currencies to use.
Right now, the control regime is exploring the modernization of money with Central Bank Digital Currencies (CBDCs). The sole purpose of these CBDCs seems to be the further automation of economic repression. Crypto offers another way forward. A better way, if we can figure out how to build a new economy around people and their relationships instead of around the relentless accumulation of a scarce commodity.
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