Crypto-Current (014)

§0.86 — From a certain perspective, that is not altogether reducible to dialectical illusion, the history of Bitcoin is structured by a limited number of dominating controversies, at a variety of levels. The spectrum extends from ideological disputes in the grand style of classical political economy to the detailed practicalities of investment decision-making. Three principal modes of hostile response can be isolated,* and sequenced roughly as phases, corresponding to guiding attitudes of dismissal, antagonism, and condescension. Each of these objections can be expected to rise in public prominence in the years ahead, as Bitcoin attracts increasing attention. Since publicity has some (strong) correlation with positive network effects, even opposition can be perversely supportive. The old saw that ‘all publicity is good publicity’ is highly-attuned to network dynamics.**

§0.861 — Dismissal, at its most emphatic, coincides with the prediction that Bitcoin will not – and cannot – succeed. When sincerely maintained, it is no more an argument against Bitcoin than atheism is an argument with God. The stakes are low, the occasion for fervor limited. The most facile dismissal of Bitcoin derides it as a scam – perhaps a pyramid scheme. It appears to be based on nothing beside the production of confidence in itself. Such criticism reveals more than it seeks to about money in general, and its attendant superstitions. Ironically, it revives the crudest metallist metaphysics in defense of a threatened post-metallic monetary status quo.

§0.8611 — Given the rapid emergence of crypto-currency as an asset class, it would be peculiar if questions had not been raised about the adequacy of Bitcoin as money. Among the most vociferously noted of these has been directed toward the extreme volatility of the bitcoin price. Further grounds for dismissal include socio-political and technical scaling problems. The in-built deflationary bias of the currency has also been a source of persistent concern, although this tilts quickly into more radical zones of ideological criticism. Bitcoin is only actually deflationary when it works. It cannot, therefore, be the impracticality of the currency that is really targeted here, but rather its potential malignancy. When deflation is identified as the enemy with which Bitcoin – potentially – collaborates, a new pitch of criticism has been reached. The plausibility of all these arguments is in direct, inverse relation to the development of Bitcoin, as indicated by the rough proxy of its total market capitalization. They rule out a future in which Bitcoin features prominently. It is judged to be mere hype,*** or a ‘craze’.

§0.862 — Antagonism takes Bitcoin seriously. It is not a matter of derision, any longer, but of hostility. Additionally, in crossing this threshold, the hostility previously masked as derision ‘comes out’. The inadequacy of contemptuous laughter is recognized. More is required to make Bitcoin stop. It is at this level that the greatest philosophical hunting grounds are opened. With the elevation of ideological intensity comes the lucidity of overt denunciation – an imperative to know one’s enemy, and to share what is known. Bitcoin, according to these critics, is a bad thing. Criticism now becomes interesting. Perhaps the predominant future of technically-competent left-wing Marxism belongs to this track.

§0.863 — Condescension corresponds to a project of assimilation. It is a concession, even a defeat, subject to a strategy of misdirection. If Bitcoin cannot be ignored, or stopped, perhaps it can be adjusted to convenience. According to this conceptual and rhetorical orientation, Bitcoin is neither a hoax, nor a malignancy. It is merely limited, or immature. It is then to be re-conceived as a stepping-stone to greater things. Condescension does not originate on the left, but from what might be called – with no small measure of reciprocal condescension – the establishment right. It is essentially conservative and pragmatic, perhaps even opportunistic. Defeat is refashioned into a take-over bid.**** Condescension is the attitude towards Bitcoin characterizing the Mainstreamer camp, as described in the fourth chapter of this book.

§0.87 — Among the controversies intrinsic to Bitcoin, or proper to it, and thus exceeding the schema sketched above, none comes close to matching the importance of the ‘block size debate’. In broaching this subject, it is crucial to note, from the beginning, that the nature of Bitcoin necessitates that any debate is essentially peripheralized. Bitcoin has its own proper dispute resolution procedure – it might be more accurately said that the protocol is a dispute resolution procedure – which works through decentralized consensus production and forks, not through dialectic and political reconciliation. Its relation to argument is one of techonomic substitution, rather than politico-philosophical subordination. In this regard, it epitomizes the work-around.*****

§0.88 — In actuality, Bitcoin falls short of itself, inevitably. Its potential remains only very partially expressed. This is a criticism that only makes sense with reference to a teleological construction. What – in the end – is the purpose of Bitcoin? In selling itself, Bitcoin answers this question in a piecemeal way. It promises and – to some lesser but already non-negligible extent – actually delivers various services, primarily associated with monetary modernization on the cryptic mainstream of the deep industrial process. It defends capital from inflation-oriented political discretion, protects transactional anonymity, ensures contractual execution without reference to financial authorities, and refines currency to facilitate micropayment capabilities. It is, however, far more than any – or all – of this, because decentralization has never been done this well, at least within a social context. Bitcoin is thus nothing less than an escalation of multiplicity. Its potential necessarily escapes any conveniently-traced horizon.

* Only three, why not five? Our list does not describe a full process of grieving for the fiat currency order, but restricts itself to partial articulation of the Bitcoin controversy. It nevertheless unmistakably truncates the celebrated (and much-parodied) ‘five stages of grief’ outlined by Elisabeth Kübler Ross. Denial, Anger, and Bargaining take us from derisive laughter, through heated ideological opposition, into mainstreaming schemes, even if it would be over-hasty to assume these responses were tidily organized as sequential phases. Depression and – finally – Acceptance begin on the far-side of all argument, with the updated presumption that Bitcoin has unambiguously won. Crypto-Current returns from Acceptance, but (in accordance with its nature) it hides the details.

** This is exemplified by the ‘Streisand Effect’.

*** Hype-cycles are serious things. Every emerging technology of profound consequence is, during the early-phase of its introduction, over-sold. Such promotional extravagance is thus an indicator of considerable ambivalence. It predicts – simultaneously – a short-term correction, medium-term resilience, and long-term take-off. If this is the sense in which Bitcoin is being hyped, it will eventually be huge, beyond even anything the hype-phase anticipates.

**** By analogy to a successful business competitor greeted by the words: “Okay, you’ve proved that you’re good enough to work for me.”

***** The greatest anti-capitalist joke known to history runs: Capital interprets morality as damage and routes around it. The rightly-celebrated maxim which this witticism plays off is discussed directly in Chapter 4.

Leave a Reply