Bitcoin

I've been sitting on this one for some time; maybe it is time to hatch it.

The Bitcoin phenomenon brings two particularly interesting subjects into relief with its curious attributes: the nature of money itself, and the nature of revolutions.

On Money

First, it brings the nature of money into relief because of how strange Bitcoin as a phenomenon is. Bitcoin is basically an artificial scarcity generator: it is a sophisticated algorithm that creates a virtual scenario that mimics gold-mining. This also comes coupled with a peer to peer distribution system, and cryptographic security, so as to satisfy the twin needs of distribution and preservation of private property. 

Its currency follows the law of diminishing returns as natural resources do. The easiest coins are found first, and then it takes greater and greater computing power to uncover the remaining coins, creating interest and increasing their value.

Its power comes from ideology: it is so widely believed to be valuable because it represents the idea that problems of distribution - and by implication, many other serious problems - can be solved by computing power and the associated technologies.

And so why would money even work? Bitcoin could be better conceived as a social activity, an emergent phenomenon generated through relation, just as something as functionally useless as gold or printed paper could become such a powerful force through social relation and mutual desire, so long as the flow itself is carefully controlled and regulated.

A currency presupposes and represents a faith in the continuity of a given order, an order which is created either through mutual trust and functionality, or great acts of violence, or all of the above.

A currency tends to obscure the fact that our society is built on war, genocide, and slavery. The currency has to emanate from somewhere.

There was no Marshall plan for the post-colonial countries. Better to keep them weak and underdeveloped, so as to exploit and extract raw materials from them, and this now includes their labor and environmentally reckless manufacturing.

Central markets tend to create uneven patterns of development in which the overriding need to extend and retain market structures and the state mechanisms required to stabilize them is self-reinforcing.

These last couple of points aren't entirely self-evident, and will require additional elaborations that I won't be able to get to right now. Still, worth bringing up to chew on.

On Revolution

Bitcoin is also curious in that it represents a minor revolution - if underdeveloped - which transfers power to the tech sector of capital. I have spoken with people who have worked on Bitcoin, and they have been very conscious of the fact that they are attempting to tear currency creation power from global finance, but that they realize there are still old problems tied with the mechanics of a currency, such as with speculation, manipulation, and hoarding. Still, it is enough to attempt to wrest power from global finance.

Capitalism is very interesting in that given its pure ideological dictates, all power structures should be constantly dissolving under the extreme competitive pressures implied by competing self-interested individuals, which of course assumes each actor possesses relatively equal amounts of power, or at least equal opportunity to pursue their relative self-interest.

We know though that this is horseshit, and that the powerful are in the business of accumulating and sustaining power, and that yes, this free market ideology is conducive to their habits of accumulation, but as soon as they reach a certain critical mass in power, they turn to freeze the mechanisms of competition and accumulation to favor their own dynasties, oftentimes taking advantage of market concentration and compromised state mechanisms to further their schemes.

They willingly create contradictory states of affairs to preserve their own power, which of course is the nature of power and the antagonistic forces it unleashes.

These contradictions are the manifestations of fundamental tensions between growing bodies of power, and the originally creative and egalitarian visions they are built on.

However, there are periods in history when even the powerful can no longer keep frozen their own built up structures, when the contradictions they generate drop their own floors from underneath them, and a minor revolution is allowed within the system, which allows it to transform relatively bloodlessly to relieve the various built up pressures it has generated over time.

You'd think that the powerful would bite, kick, and scratch to keep their power, whatever the case, considering their usual behavior, but then there are times in history when the powerful know enough to let the changing shape of the system settle, establishing a partial new regime.

This can happen if the minor revolution in question is of a nature that is not in too great of tension with the established system. I'm thinking here of the New Deal revolution in the 30s, and also of the counterrevolution that took place from the 60s to the 80s and continues in increments today.

The cultural and economic counterrevolution is often conceived as being heralded in through the Reagan administration in the 80s, but the same thing was happening under the Thatcher administration before that, and even more interesting, this counterrevolution was not a mere restoration of an old guard, but a shift in power from the industrial sector to the finance sector, a shift which gave the Right a material and ideological basis for its resurgence, and which took its shape as early as the 60s in Britain.

It remains to be seen whether Bitcoin and the cryptocurrency revolution will have a lasting impact, though the mere existence of these things definitely raises some interesting questions.

Bitcoin is tolerated because it does not threaten establishment systems enough. Its volatility as a currency makes it gimmicky, and because of this, it tends to be exchanged for dollars. So it is more like a collectible.

When its mechanisms became more autonomous in exchange, such as with black market activity, then those activities were attacked, as seen in the Silk Road incident, but its establishment activity is allowed because it is useful in that it generates interest and desire. It is still a type of commodity, and so it can be owned and controlled, and integrated into the existing system.

Nevertheless Bitcoin represents a minor revolution, but which has become absorbed by capital. Minor revolutions then can delay destruction of a standing system, but not halt it. Why can some revolutions be absorbed and others cause great destruction? Is it the presence or absence of sameness? Of a familiar logic of accumulation versus the feared logic of hierarchical rearrangement? But even disruptive patterns of accumulation can cause hierarchical shifts. Better question: does it threaten one sector of capital, or all of it, in which it can bond together and banish the enemy?

But all revolutions are absorbed by the overarching social system within which they take place, unless they burst apart the social system in the process, and a new one forms with similar problems.

Human history is a series of revolutions, all driven by the need to escape the dying shells of older revolutions.

And so what are we driving at? Why this constant growth and preservation? In this case, the constant growth and preservation of life is death.

What is a revolution to accomplish? What should be the direction of change? The re-animation of modern industrial society? Or its gradual dismantling and localization?