Crypto-Current (036)

§3.6 — The duplicity of the sign has numerous variations, and double spending (narrowly conceived) is by no means the only one with direct relevance to Bitcoin. A digital monetary system is intrinsically open to fraudulence (manipulative duplicity) at every scale, since not only its currency units, but also its associated websites, exchanges, and institutions – up to the level of an entire implemented protocol or commercium – are vulnerable, as a matter of first-order principle, to cloning. In this (widened) sense, the DSP is the indicator of a fully scale-free vulnerability.

§3.61 — Bitcoin, as a whole, is replicable open source software. It has no secure uniqueness, beside that – by no means inconsiderable – of coming first. The fact that the distinctive identity of Bitcoin inheres solely in its originality – which is to say its historical privilege – is already an invitation to clone invasion, at multiple levels. Since the avenue of monetary counterfeiting is blocked by the Bitcoin DSP solution, digital duplicity is displaced, and in fact up-scaled. From the corruption of currency units, it is redirected into the corruption of currency institutions and systems. Fraudulent entities proliferate at the edge of the Bitcoin system, from fly-by-night scam sites to entire exchange businesses (whose structural corruption is as likely due to the unconscious consequences of defective design, as to malicious criminal intention).  

§3.62 — Among these dubious displacements of the DSP, the propagation of more-or-less Bitcoin-like currencies has a special place. The topic of altcoins is particularly engaging, and easily merits a dedicated work on its own account. As a deposit for creative techonomic endeavor, these variant cryptocurrencies are perhaps unsurpassed. Yet, when approached on the grimmest and most narrowly-critical track, they appear as deviant paths off the Bitcoin blockchain,[1] and – worse still – as a recrudescence of the DSP, amplified to the level of entire currency systems.

§3.63 — It is unnecessary to make too much of the fact that no less than three different altcoins have been brazenly named ‘Scamcoin’.[2] ‘Hammer of the altcoins’ Daniel Krawisz argues that they are all scams,[3] comparing them to cargo cults, for which there is an expectation of “similar results through blind imitation”. According to this argument, the proliferation of altcoins is a pathological phenomenon, to be denounced as an impediment to the emergence of Bitcoin’s natural monopoly (since, due to network effects, “one would always expect a single currency to overcome all its competitors”[4]). Because they sap network-effects, however feebly, altcoins are a parasitic drain, interfering with the ability of Bitcoin to rapidly reap the full consequences from its first-mover advantage. Krawisz writes: “…once Bitcoin exists, then there is no additional value, from a monetary standpoint, of creating knock-offs. … What makes Bitcoin great cannot easily be duplicated. … Altcoins can only be explained if we believe the purpose of cryptocurrencies is to make money rather than to become money.” 

§3.64 — Between Bitcoin and a close-clone altcoin, the difference that matters is invisible to even the most painstaking inspection of code. To avoid distraction, it is advisable to suspend all such comparison, and to assume – instead – perfect duplication. Bitcoin – as an event or real singularity – has no exclusive essence that can be separated from its history. It is merely an instantiation of its own code, even if the first one. Its currency potential is a matter of momentum, exhausted by its path dependency (or “history and community” as Krawisz puts it). Only the workings of nonlinear network effects, based upon its ‘first-mover’ or ‘incumbency’ advantage – rather than any determinable differences in kind – distance Bitcoin, in principle, from its proximate competitors.

§3.65 — Bitcoin does not defeat forgery by being difficult to forge, but rather – absolutely – the opposite. It abandons such terrain in advance, on the implicit assumption that all original identity is indefensible in the digital epoch. Synthetic being, alone, can secure itself. Once again, and not for the last time in this exploration, we are returned to the rift – the abyss. Bitcoin’s integrity is groundless. Every imaginable redoubt of essential uniqueness is denied to it in principle (or a priori). It can be based upon nothing other than the circuitry of auto-production, whose only ‘foundation’ lies within itself.


[1] There are three basic ways an altcoin can relate (‘cladistically’) to the Bitcoin blockchain. Competitor currencies, in particular, typically represent a separate lineage, initiated by cloning and minor modification of the Bitcoin protocol. Only slightly more speculatively – which is to say experimentally – they can be produced by ‘hard fork’ (speciation) events within the blockchain. Within the emerging digital ecology, hard forks can be expected to make an important contribution to basic political-economic conceptuality. Perhaps the most interesting possibility, with regards to evolutionary complexity, is provided by the option of attachment as side-chains. In this situation, a comparatively high degree of intricate, symbiotic co-evolution is built into the pattern of rising diversity from the beginning. See: http://altcoins.com/

Bitcoin’s first hard fork occurred in August 2017, with the split of Bitcoin Cash. The break divided the crypto-currency between a major lineage prioritizing the security of a store of value, and a minor lineage prioritizing convenience as a means of payment. Monetary theory had become a process of experimental dissociation. Fitz Tepper at TechCruch commented helpfully: “Essentially, like everything else in crypto, no one knows what’s about to happen next.” https://techcrunch.com/2017/08/02/wtf-is-bitcoin-cash-and-is-it-worth-anything/

In discussing the relation between the archaic RNA world and its obscure predecessor – perhaps Cairns-Smith-type information-preserving clays – as a highly-abstract analogy to the potential transition to a post-DNA hegemonic information medium, Hans Moravec coined the term replicator usurpation. In this regard, the comparison of blockchains to genomes is of evident relevance. Both are characterized by the massive redundancy that comes from ubiquitous copying. Every cell or node contains a full version of the record. Additionally, speciation functions comparably in both cases. Variants stemming from any given speciation event (or hard fork) share a lineage. Diversity has a cladistic structure, or fragmentation record, registered in the conservation of common code.

Fred Ehrsam notes that: “Forking is a … critical evolutionary mechanism for blockchains. Just like mutations to DNA in biological organisms allow for evolution through natural selection, forking lets us run multiple experiments in parallel where the strongest versions survive.”

See: https://medium.com/@FEhrsam/accelerating-evolution-through-forking-6b0bba85a2ba

The topic of forking, amid other types of crypto-currency proliferation and diversification, will return in relation to the concept of inflation in a post-macroeconomic world. The emerging monetary schematics suggest spontaneous (decentralized) market regulation of the price of money via the propagation of difference rather than the amplification of the same. Speciation replaces printing as a deflation-control.

[2] The original ‘ScamCoin’ was released in January 2014. It was succeeded by two further altcoins bearing the same name.

http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/scamcoin-launching-tomorrow-will-be-the-3rd-cryptocurrency-named-scamcoin/

[3] See: http://nakamotoinstitute.org/mempool/the-problem-with-altcoins/

[4] The argument for natural cryptocurrency monopoly, in its most abstract features, is a strict analog of the proposal advanced among certain influential voices engaged with the prospect of AI-Singularity, that such an event would be expected to install an effectively-unchallenged ‘Singleton’. In both cases, the argument identifies a point of criticality (or singularity) at which first-mover advantage is amplified explosively, by powerful positive feedback, leading rapidly – or at least with exponential cybernetic inevitability – to total domination. An articulate defense of this idea has been presented by Nick Bostrom: http://www.nickbostrom.com/fut/singleton.html

One thought on “Crypto-Current (036)

Leave a Reply