by Anthony Signorelli, Part 2 of 2
Despite the dangers of re-asserting private property through blockchain technology and a bitcoin-like network, the digital currency displays in full view some very intriguing aspects of the postcapitalist world.
The system is described in non-technical terms in this article.
In that article, readers will find that bitcoin can only work as an open source system, a network of computers, and with full access to anyone to transact. Here is part of the description:
“All the code to perform transactions on the Bitcoin network is open source, this means that anyone with a laptop and an internet connection can operate transactions. However, should there be a mistake in the code that is used to broadcast a transaction request message, the associated Bitcoins will be permanently lost. Remember that since the network is distributed, there is no customers support to call nor anyone that could help you restore a lost transaction or your forgotten wallet password. For this reason, if you are interested in transacting on the Bitcoin network it’s recommended to use the open source and official version of Bitcoin wallet software (such as Bitcoin Core) and to store your wallet’s password or private key in a very safe repository.”
In other words, open source, collaboration and network dynamics are already intrinsic to the system. The creation of new bitcoin is called “mining” but it is essentially a creative process, not an extractive one. Human and computational energy in converted into digital coins, so no physical extraction occurs. And, at least theoretically, there is no limit to what could be produced.
Aside from all the fear mongers out there, the ability to “mine” bitcoin is the source of savvy financial people saying bitcoin value is a fallacy. Just as nations can print infinite amounts of money if they choose to do so, there is nothing intrinsic to stop the creation of more bitcoin. If that happens, what happens to the market for bitcoin? And therefore its value? And who controls that?
These risks are serious to financial professionals, but such professionals also derive their concern from a capitalist perspective. Bitcoin governance is a discontinuity from that perspective, and therefore their analysis is limited. They can’t see clearly what they are looking at.
From a postcapitalist perspective, this reality highlights the problem of infinite supply on a different level—the infinite supply of currency also devalues prices and leads, eventually, to a free economy. Also, if there is going to be regulation of such a system, it has to come through the network because the bitcoin network is global. Control is no longer in the hands of a sovereign nation, but rather with an independent network. Central banks, treasury departments, national policies, and even multi-national bodies like the World Bank are effectively removed from the decision-making apparatus. In other words, bitcoin separates the institutional structures and powers of capitalism from the place where they can assert such power. It is the biggest threat to financial power that can currently be seen, so it is no wonder that financial industry leaders are criticizing it as valueless. They have, to say the least, a big stake in ensuring that the system stays within the realm of predictable capitalist control.