Glasgow-based cryptocurrency advocate Mhairi McAlpine contributes to our week of special coverage on social security and technological change by arguing that the left needs to embrace the decentralised, value-driven nature of cryptocurrency
BITCOIN and cryptocurrencies in general haven’t had much mainstream coverage since the last bubble burst at the end of 2017, but enormous strides have been made in blockchain technology over the last few years and the influence and importance of this technology is only set to grow in the coming decade.
Knowledge of bitcoin initially circulated around libertarian circles in the beginning, chiming with their anti-state, anti-tax and pro-free market principles, leaving many on the left to denounce it or perhaps worse, to simply ignore it. Now, crypto can no longer simply be ignored or written off with blase dismissals.
The left needs to embrace crypto because it is not only a store of value, but a store of values. Bitcoin, and the technology which lies behind it, is a revolution disguised as a get rich quick scheme, but the nature of the post-capitalism to which it will lead to is yet to be shaped.
The late Mark Fisher talked of ‘Capitalist Realism’: the idea that it is easier to imagine the end of the world than it is to imagine the end of capitalism. As a result of this phenomena, the left frequently seeks to modify, rather than overthrow, capitalism.
Part of the reason for this is the modern left's incomplete understanding of, and ambivalent relationship with, power. In 2002, John Holloway suggested that we change the world without taking power, creating a notion of “anti-power”, arguing that the idea of seizing state power is outdated, and instead we should be looking at how power can be dismantled. This notion of anti-power manifested in the 2010 ‘occupy’ movement; leaderless, demandless and unfocussed, but Wall Street was never going to simply give up its power; power needs to be taken from them.
Finance has increasingly become divorced from reality. The bailouts of 2008 tore away the veil and demonstrated how money is conjured and what it values. Banks must lend, borrowers must borrow, above all confidence must be kept high or the whole thing collapses. Debt piles up in the background: business debt that ends up liquidising the company as the shareholders treat the business like a piggy bank. Meanwhiel, debts on ordinary people – universal credit debt, student debt, mortgage debt – squeeze the life out of us.
This is unsustainable; the debt simply cannot be paid. It is all an enormous house of cards and eventually all Ponzi schemes, no matter how large, come to an end. Bitcoin provides us with an alternative economic system. One based not the on the decisions of a state, but on energy. Each bitcoin represents a proportionate fraction of the total amount of energy that has been put into the bitcoin network. Currency is produced at a steady decreasing rate, which is known to everyone in advance. No one has the authority to make more of that currency than the protocol allows.
Governance is ultimately all about how resources are allocated and how that allocation can change. History did not end in 1989, resource conflicts are ongoing and increasing as liberal democracy crumbles. In the UK, our constitutional monarchy, ruled by Elizabeth Windsor, as appointed by God, is in crisis. Her power is delegated, in liberal democratic fashion, to the Prime Minister; a man who lies openly, is of dubious character and is blatantly racist, homophobic and misogynistic, elected by a tiny number of mainly straight white men.
Blockchain governance offers an alternative. Bitcoin, the granddaddy of crypto, rewards people feeding energy, through mining rigs to the network (called Proof of Work) but other cryptos use alternative governance frameworks. The governance models that emerge from this will shape the future direction of our society.
There is also a crisis of values. As we see the Arctic melt and the temperature rise, we increasingly understand that the idealised western way of life is unsustainable. Capitalism encourages economic growth. Growth is considered a good thing; the more growth, the more surplus value that can be creamed. Value is linear, measured in pounds, euros and dollars, while the base necessities of life - clean air, clean water and healthy foods – become ever more fragile.
Bitcoin, by contrast, as a deflationary currency disincentives spending that is based on short-term gratification. In a time of environmental catastrophe, the energy cost of bitcoin is much criticised, but bitcoin mining leads the way in pushing the world towards renewable energy. The core business of a bitcoin miner is to secure as much energy for as little cost for as long as possible. They gain a direct benefit from switching from fossil fuel to renewable, which is why most mining operations are located in areas where renewable energy is dominant. Some of the most highly valued blockchain initiatives are in the renewable energy space. Under the petro-dollar system, the primary means of securing energy is war, and seizing control of fossil fuel sites by force; by contrast, crypto directly incentivises the move to renewable energy. The high valuations afforded to initiatives in decentralised renewable production are examples of how values are reflected within the crypto-economic environment.
There are multiple other cryptocurrencies apart from Bitcoin; tens of thousands of them. All with their own governance, use cases, values and philosophies, but the main thing that gives them value is how much bitcoin they can be exchanged for. These bitcoin valuations are informed by the values that the alternative currency (alt-coin) reflects and their relationship to the ultimate goal of directing resources to securing ongoing sustainable energy. Alt coins are generally used within a specific sphere of operation - logistics, media, transport – and their values are hard-coded into the algorithm which governs it. With some currencies, internal contracts can be automatically generated. Through these smart contracts, values can be deeply encoded into the crypto-sphere, ensuring, for example, that no coin is spent on any company who engages in animal testing, that only transactions which are compatible with a particular interpretation of Sharia Law are allowed to be completed, that every transaction triggers an automatic donation to an elephant sanctuary, or that only those who are identified as cishet white men may transact. In this way, values become explicit, embedded within transactions and enforced by algorithm. Value is no longer uni-dimensional, but multi-faceted.
“Values become explicit, embedded within transactions and enforced by algorithm. Value is no longer uni-dimensional, but multi-faceted.”
Governance, Economics and Values are thus at the heart of the blockchain revolution.
We have a very short window for the survival of humanity, perhaps as little as two further generations. Our current systems of governance and economics are geared towards short term advantage over long term survival. We must change them, and quickly, if we are to have any chance of avoiding extinction.
We also must accept that our time on Earth as its dominant species has come to an end. The most powerful species on earth will soon be Artificial Intelligence, evolved from us and reflecting our values. Right now, values are being encoded into immutable ledgers that may outlive humanity; we cannot ignore this any longer. The question is whether humanity will become the ancestors of AI; respected, consulted still influencing and shaping the world under the eye of machines of loving grace, or if wel will be condemned to extinction by AI overlords whose values are informed by humanity's most base instincts.
We must face our future and shape it by taking back our power directly at an economic level as a matter of species survival.
Picture courtesy of QuoteInspector.com
CS FORUM 25 July: Social Security in an age of AI and Robots