22 Pages Posted: 7 Apr 2015

Date Written: April 4, 2015

Abstract

Bitcoin is promoted as an alternative to currency, and even at times as an alternative to money, but neither Bitcoin’s development nor its promulgation emerge from thoughtful analyses of money or currency as they currently exist, let alone the thought and history that have figured in their development. The grounding problems that Bitcoin advocates consider central are not the ones that major thinkers about money or currency, from the Right or the Left, have deemed important. On the contrary, those grounding problems are largely ideological: the desire to bypass the (apparently lawful) credit card and PayPal “blockade” of WikiLeaks, on the one hand (usually mentioned as the instigating event in the widespread use of Bitcoin), and the desire to bypass central and/or commercial banks for either the creation of money (as many of the more rabid advocates insist) or the provision of financial services (the main interest of Satoshi Nakamoto’s original Bitcoin paper), on the other. The former ideas emerge from a libertarian, anti-state politics familiar from much of the WikiLeaks story. The latter ideas emerge from the profoundly ideological and overtly conspiratorial anti-Central Bank rhetoric propagated by the extremist Right in the US, and which despite its overt “anti-bank” rhetoric, on most thoughtful analysis, serves rather than resists the interests of banks and big finance (much as despite its anti-bank rhetoric, Bitcoin itself is now promoted by banks, investors, and venture capitalists). Scholars of money like Mary Mellor and Ann Pettifor have suggested meaningful alternatives to the current money system, but Bitcoin has very little in common with their proposals, which would require societal assent as well as technical innovation. The lack of any thorough, non-conspiratorial analysis of existing financial systems means that Bitcoin fails to embody any true alternative to them. The reasons for this have little to do with technology and everything to do with the existing systems in which Bitcoin and all other cryptocurrencies are embedded, systems that instantiate the forms of social power that cannot be eliminated through either wishful thinking or technical or even political evasion: the rich and powerful will not become poor and powerless simply because other people decide to operate alternate economies of exchange. Lacking a robust account of transforming these systems of power, even without Bitcoin’s flaws, a “perfect” cryptocurrency would exacerbate, rather than address, the existing serious problems with our monetary and financial systems. Because it operates without such an account, Bitcoin’s real utility and purpose (and that of the cryptocurrency movement in general) can be better understood as a “program” for recruiting uninformed citizens into a neoliberal anti-government politics, understanding the nature and effects of which requires just the attention to political theory and history that Bitcoin enthusiasts rail against.