Cryptocurrency as Critique
§2.0 — What is Bitcoin? In advance of any extraneous appraisal by philosophy, Bitcoin speaks for itself (in numerous ways). The title of Satoshi Nakamoto’s 2008 paper* is an obvious starting point, since it is explicitly structured as a definition. Bitcoin, it tells us, is a peer-to-peer electronic cash system.
§2.01 — Even as the question is held open whether the Bitcoin Event can be confidently identified with the first complete formulation of its virtual mechanism, the importance of this initiatory document can be assumed, beyond all serious reservation. Whatever else it may be, Bitcoin – the text – is a critical episode in the history of philosophical writing. This judgment is in no way diminished by the focused practicality and understatement of its prose. Rather, the contrary.
§2.02 — Each word in this primary definition of Bitcoin, therefore, merits careful attention – as a default – starting with the indefinite article,** a semiotic particle which, despite its multiple dimensions of modesty, nevertheless opens forwards onto a deepening current of substantial controversy, and backwards onto a legacy of digital money systems whose profound historical importance is only very partially vitiated by comparative neglect. Bitcoin is introduced as one instance of a generic set, with an explicit grammatical repudiation of any claim to uniqueness. It is one among many – singled out only by its historical primacy – and partakes fully in the extreme ontological vulnerability of the digital sign, scarcely differentiated from a copy of itself. The secure individuation of the system is something it will have, itself, to build.***
§2.03 — Not only are the four constituents of this definition theoretically absorbing in themselves, they also constitute an intricate, and variously nested, combinatorial or permutational cluster, involving superficially heterogeneous – social, technological, economic, and abstract system-theoretical – terms. It thus opens a door, or doors, into the domain of true syntheses, or irreducible, emergent powers.
§2.04 — The term ‘peer-to-peer’ (henceforth ‘P2P’) is a conceptual lynchpin of exceptional significance. The leverage the term offers to socio-political understanding is, perhaps ironically, peerless. It can be considered, without serious risk of exaggeration, as the key to modernity’s most fundamental tendency, and the supreme expression of its ideological ambiguity, because it asserts absolute formal flatness and equality (of ‘nodes’), while opening to an unlimited substantial diversity of fortune.**** All the complexities of immanent, or critically processed, social arrangements are delegated to it, with a comprehensiveness that tests the very meaning of ‘society’ at the outer edge of its abstraction, where it designates a functional multiplicity of non-specific agents. ‘P2P’ simultaneously captures agency as a node, identity as a connective address, the elimination of concentrated – or ‘transcendent’ – oversight, network sovereignty, and the technicization of political-economic relations.
§2.05 — In the case of Bitcoin, the system of P2P connections is overtly electronic, thus submitted to a technological dependency, with subsequent historical concreteness. In this respect, it is a thing of the mature (or internetworked) phase of electrified modernity, nested neatly within a set of well-ordered techno-historical determinations that locate it in our time. Yet the real abstraction that characterizes the modern historical process complicates this tidy series of embeddings. Electricity is historically concrete, but techno-industrially abstract, as general-purpose power supply.***** Electronics, analogously, while determinate in historical time, corresponds to an indetermination – or abstraction – of heterogeneous signs into non-specific information, exemplified – at the limit – by the commensuration of programs to data in the digital computer.****** In an engagement with Modernity, empirical history is not enough.
§2.06 — Modernity is what happens to history when it ceases to be ‘one damn thing after another’ and succumbs instead to a self-reinforcing trend. ‘Paradoxically’ – with the scare quotes here marking the immensity of the philosophical provocation – the concrete current of modern history is a process of abstraction, exemplified by subsumption into control engineering, with programming as its spontaneous formulation. Electrification and then electronics are decisive thresholds in its course. New units of abstract power, and of information, are indices of irreversible submission, folding the concrete apparatus of production and transmission into an activated system from which there can be no retreat. The system – in each case – is in a very real sense nothing but its parts, but it was not before, and now is, and there is no going back.
§2.07 — Cash is not a synonym for money in general, unless employed with extreme casualness, but its specific difference – already subtle – is dynamically complicated by the Bitcoin innovation. Pre-Bitcoin, cash is economically defined by its independence from all contractual inscription. Since nothing legibly binds cash to its owner, the possessive relation is purely physical, instantiating property as direct material control. To have it is to hold it, or to deposit it within a secure property, where it is physically protected, or at least hidden. Cash changes ownership by changing hands. In the crudity – or primality – of this propertarian structure, based on sheer holding, the virtues of cash are manifested. Its social circulation is essentially anonymous and unrecorded, even if a secondary order of economic registration is imposed upon it. It is thus, in itself, an exemption from the political, which is to say from any and every variety of macro-social answerability. Cash-money is depoliticized and depoliticizing, which means immediately – from the perspective of its critics – that it is inherently anti-social, and affined to criminality. Among the most paradoxical features of Bitcoin is its rigorous adherence to the functional characteristics of cash-money, even though the currency is subsumed without remainder into a system of contractual legibility. If Bitcoin is cash, we have to re-learn what cash is.*******
§2.08 — Finally, Bitcoin is a system. This concluding component of the definition is the most easily overlooked – and dismissed as without content – precisely because it carries the greatest transcendental implication. What a system is, isn’t anything in particular, at all. Rather, a system is that which remains – by necessity excluded – even after a comprehensive enumeration of parts. Any real system is an irreducible individual, a true ‘thing’.******** Critically, individuality is a scale-free concept, assigning reality to an object. It summarizes a meta-stable knot of connectivity, or synthesis. When formulated as a critical proposition: the systematicity of the system is irreducible to any part or parts of the system.
* Satoshi Nakamoto — ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ (2008).
Since 2014, the Bitcoin paper has been tacked on to the Bitcoin blockchain as metadata (where it coexists with a highly-heterogeneous assortment of grafted information). As Morgen E. Peck explains: “Last year, after much debate in the community, the developers who steward the Bitcoin protocol (which is open source) added a new feature that allows users to tack 40 bytes of metadata onto every transaction. […] The Bitcoin blockchain is now littered with all kinds of nonfinancial messages. Valentine’s Day greetings, prayers and eulogies, excerpts from the WikiLeaks Cablegate files, a hash of the complete text of a recently published book about Bitcoin, and of course, the original white paper that describes Bitcoin. All of these live in the blockchain, embedded into transactions. […] Once metadata gets incorporated into a Nakamoto blockchain, it enjoys all the benefits of the peer-to-peer network that curates it. The entries are accessible to anyone on earth who has a computer and an Internet connection. In order to destroy them, you would have to access every computer on the network (and someday, perhaps, even a constellation of satellites). They are impossible to change, and thus impossible to censor. And they carry with them both a time stamp and cryptographic proof of who created them.”
** Deleuze & Guattari condescend to the definite article, identifying it as the grammatical index of a pre-critical unity. They select the indefinite article to formalize reference to blocks of becoming, in a “semiotic … composed above all of proper names, verbs in the infinitive, and indefinite articles or pronouns” (MP 263). (As an aside, we are compelled by – necessarily informal – a-schizoid conceptual etiquette to dismiss the terminological convergence upon blocks as coincidental). Within the discourse on Bitcoin, however, the definite article tends to return – crypto-inertially – as the switch-point into synthetic singularity. A preliminary hint of this function is found in the difference between two questions: “What is time?” and /or “What is the time?” From this example, it is demonstrated that the definite article, on its own, although in a usage that cannot be presumed typical, is able to support the entire tension of ontological difference, and thus of transcendental critique. Perhaps the most prominent contemporary work of this definite assertion sidelines blockchains in the name of the (Bitcoin) blockchain. There is no evocation of commercial pressure that compares to that of the market. Which is still not to have mentioned ‘The Thing’ (a name – Deleuze & Guattari explictly accept – of capital-as-terrestrial-singularity, in distinction to capital as a generic ‘mode of production’). Accelerate the process.
*** This taxonomic modesty will be re-visited, in the context of questions about network effects and their affinity with natural monopoly.
**** No principle has a greater claim to epitomize the modern spirit than formal equality. Any profound revolt against modernity is articulated over against it. It is criticized from the anti-market left for the social indifference betrayed by its (merely) formal equality and, from the anti-capitalist right, for the socially-corrosive (substantive) consequences of its formal equality. Violated moral substance (‘community’) and order (‘hierarchy’) are equally brought to testify against it. This ambivalence is further complicated by encrustation, recorded with especial fidelity by the term peer, as it has undergone progressive generalization from an archaic aristocratic assumption (preserved in the English association of the social nobility with ‘peerage’), through the formality – and thus indeterminacy – of the right, in common law, to be ‘tried by ones peers’ (echoed faithfully in the academic principle of ‘peer review’), to its present, predominantly technical sense, in which the indeterminacy of peer-to-peer ‘nodes’ is associatively tinted by the concretization of formal equality as democratic universality. Since a group of ‘peers’ could be anyone, they tend – by inexorable egalitarian conversion – to eventually be everyone. In this way, an influential co-optation of the language of democracy by flat-network advocacy takes place, for the most part quite innocently, and unreflectively. Formal equality is identified as a democratic principle, which thereby acquires a strictly negative meaning. Definite meaning has by this stage almost entirely disappeared, as attested by the perfection of ideological ambiguity – with ‘democratization’ standing no less for anything than its opposite. It does not seem to have been in the interests of any politically-significant constituency to resists the tendency – even under the implausible assumption that some such resistance to ideo-linguistic entropy was abstractly imaginable.
***** Fernand Braudel’s great study of Civilization & Capitalism includes an illuminating survey of the energy resources commanded by human civilizations in the period immediately antecedent to modernity. The linchpin of energy abstraction – or plasticity – was man, conceived as a source of mechanical power. On the basis of his unmatched versatility, human laboring effort would remain the critical energy transformer until far into the 19th century. Secondary only to man himself in flexibility was the supplementary work of animals, typically bred for specific functions, but available for limited redeployment. Alongside men, a range of other laboring animals – mules, oxen, camels, and horses – converted nutritional calories into work. In Europe, especially, horses occupied an especially privileged place, as reflected by the persistence of ‘horse-power’ as a measure of quantitative industrial effort – i.e. power, or work rate. The metric was introduced by James Watt in the late 18th century, and – by neat historical symmetry – it was the ‘watt’ as an electrical measure of power that would much later displace horsepower from its technical centrality. The only sources of energy available from non-agricultural sources were wind and water, predominantly in the sails of nautical vessels, but also very significantly in the large numbers of mills that composed the earliest mechanical energy infrastructure. Crucially, these power resources were not convertible into a general (or abstract) form. Retrospectively, it is tempting to assign some such role to wood and charcoal, but this is unconvincing due to the very limited range of industrial applications for combustion prior to the switch to coking coal (and the first steam-powered mills). It is only with the ‘industrial revolution’ brought by steam power that a fungible stock of fuel – and thus standardized energy reserves – became available as a comparatively general-purpose power source, of very broad mechanical application. The introduction of the electric turbine represents a technical subsumption of this first industrial energy infrastructure into one of far superior abstraction. All sources of energy supply, when applied to the generator as an intermediate machine, are pooled into a single power reservoir of at least tendential homogeneity. Lenin’s widely-cited definition of communism as “Soviet power plus the electrification of the whole country” appears in context as an empirical-pragmatic – and even nakedly opportunistic – slogan, lending itself to an apprehension of electricity as a socio-political resource, essentially incapable of rising to the level of serious philosophical consideration (thus eliciting a certain condescending humor within the subsequent development of Western Marxism). Yet even in this account, the order of emphasis is sufficient to mark out electricity as a practical abstraction, or fungible resource, whose facilitation of energy quantification at an unprecedented level advances its ‘commoditization’ (in the mainstream economic, rather than specifically Marxian sense). See V. I. Lenin ‘Our Foreign and Domestic Position and Party Tasks’ (November 21, 1920).
****** Processing programs as data enables open-ended recursion, by eliminating the walls of principle that would prevent programs being objects for themselves. ‘Turing-completeness’ or universal computational competence is dependent upon such unbounded reflexivity. A critical point of philosophical entanglement arises at this point. Is it not that, in the terminology of transcendental philosophy, the conditions of possibility for objects (algorithms) are here being objectified (as data), systematically? So is this not, then, the epitome of metaphysical error –– installed in the very germ of the computational machine? In the circuit, objects and objectification reach a plane of consistency. It is in this apparent breach of transcendental demarcation that we encounter the diagonal problem.
******* While the immediate semiotic index of Bitcoin’s success is its tendency to acquire the characteristics of a general concept, over time – it has been speculated – its advance might be marked by nominal eclipse, due to the redundancy of its specific identification. At a certain threshold, Bitcoin becomes simply ‘Internet money’, or even ‘machine money’ (although the latter demands a semantic upgrade of the word ‘machine’ from its colloquial usage as a technological instrument – one that has been already philosophically prepared). Pierre Rochard – in a series of remarks on Twitter – goes further, to suggest that the world will eventually settle simply for ‘cash’. Bitcoin, according to this expectation, inaugurates a new era of coinage.
******** The terminology of individuation, drawn primarily from the work of Gilbert Simondon, is considered here to be systematically substitutable for that of substantive multiplicity (as employed in the joint work of Deleuze & Guattari), and more generally for that of complex adaptive systems as theoretically determined by the Santa Fe Institute and parallel research projects. The ontological significance of these terms lies in their exact coincidence with the designation of real things, otherwise named ‘machines’.