Despite its apolitical nature, Bitcoin needs our democracy to thrive just as much as our democracy needs Bitcoin to improve.
This is an opinion editorial by Frank Kashner, founder of UnChainDemocracy.org.
The “politics” is often defined as “the activities associated with the government of a country or other area, especially the debate or conflict between individuals or parties that have or hope to achieve power”.
Do we want Bitcoin to come to power? Yes, although the power of Bitcoin is different from the power of a person or economic or political entity. But we’re still talking about power, expressed through code design and implementation, proof of work (electric power), the internet, exchanges, publishers, blogs, laws, courts, schools, and politicians. The Blocksize War, which I lived through, was ultimately a conflict of political power, won by those in favor of node decentralization. This article and this magazine are themselves political players in the contest for future monetary and political power.
Ultimately, monetary freedom, Bitcoin, is only one aspect of freedom. For those who live in the US, another aspect of freedom is our political rights, as outlined in the Bill of Rights and the Constitution. As such, even our terribly flawed democracy is worth defending and extending.
But it seems that many Bitcoiners do not see it that way. For example, Jimmy Song, whom I respect and from whom I have learned, has opined that perhaps our democracy is so flawed that it deserves to be abandoned. But I suggest that Bitcoin and democracy need each other and that the alternative, autocracy, would be horrible.
Bitcoin forever caught in the currents of political power
A friend recently pointed out that our current political divide can be seen as one between those who focus on freedom and those who focus on equality. Like two dots on a line, we in the Bitcoin community can find unity around similar visions of what makes Bitcoin possible in a democracy. But we must also analyze the relationship between Bitcoin and democracy and imagine the dark alternative: living in an autocracy that can seize our property and violate our other rights.
In 1941, a time of great political conflict, in his work “Talking Columbia”, Woody Guthrie famous sang“I don’t like dictators, not much, myself, but I think the whole country should run…with electricity!”
Electrification, a revolutionary technology at the time (not unlike Bitcoin today in some ways), was a technology that was opposed and supported by various business interests and their hired politicians. Even today, a quick search reveals strong opposition to electrification efforts.
Like electricity, Bitcoin will now and always be caught up in the currents of financial and political power. It is the very nature of a change of the magnitude of Bitcoin. Consider what we’ve already seen: China bans Bitcoin, Canadian truckers use BTC, El Salvador defies IMF and makes Bitcoin legal tender, BTC emerges in Ukraine, US Securities and Exchange Commission (SEC) ) denies request to convert GBTC to an ETFNigerians start using Bitcoin, and currently, “Operation Choke Point” as the The SEC prevents banking access to Bitcoin companies.
These currents account for the presence of political freedom, a functioning democracy, as well as the legal status of Bitcoin. For more evidence of Bitcoin’s intrinsic ties to democracy, check out The Human Rights Foundation, which has an arm led by Alex Gladstein that uses Bitcoin to improve political and economic freedomspecifically in some of the worst autocracies in the world.
Bitcoin is more fragile than we think
A list of Bitcoin’s fundamental properties includes decentralization, anti-fragility, protection against forfeiture, an incorruptible development system, proof-of-work security, and protection of the nodes that defend it. However, I think we are naive about its strength.
It is easy for us who live in Western democracies to assume that the rule of law, which protects our property and liberty, is a given. If we lived in China, North Korea, Afghanistan, Turkey or Russia, we would not be so optimistic.
While Bitcoin is an attractive Trojan horse (the number is increasing, sort of) for some of the rich and powerful, opposing interests could create legislation and policy that could drive Bitcoin out of the empire’s monetary gates. Yes, we could still operate “underground”, but think about what that would be like.
Today, Bitcoin is tiny, and those in power have subtle ways of delaying and denying its widespread adoption, such as claiming that “mining is destroying the environment” or claiming that “a bad actor like Sam Bankman-Fried is an agent political”.
Consider how authoritarian governments using threats of imprisonment and violence treat Bitcoin. They have no problem with confiscation, even if they do seize mining machines (how did it happen in venezuela).
And there are other problems with what we consider to be the immutable properties of Bitcoin: Why there are so few core developers, and what are the implications of this for the future of Bitcoin? Why are there so few nodes (about 16,000) relative to total Bitcoin users? Why are government agencies throttling exchanges and promoting misinformation about the value and use of energy?
It is our democracy that allows Bitcoin advocates to advocate, lobby, broadcast, have business, and go to court. But our democracy, weak as it is, is under increasing threat from corporate forces that would prefer no regulation or autocratic power for themselves. I predict they will defend the US dollar based system. To prevail, the defenders of Bitcoin and democracy need each other.
Some speakers in the Bitcoin arena or their guests declare that it is the ruling and political classes that have all the power. This is simply not true; see, for example, “Who Rules America?” by William Domhoff, Jane Mayer’s Dark Money, “Democracy in Chains” by Nancy MacLean either Shadow Net by Anne Nelson. These are well-documented looks at how those who would make America authoritarian hold significant power and have advanced that agenda for the past 50 years.
In conclusion, Bitcoin needs democracy and democracy needs Bitcoin. Both systems are dynamic and constantly changing, which complicates our task. I hope this perspective helps me and others to convince Bitcoin advocates to pay more constructive attention to our political system, and helps democracy advocates pay more attention to the economic freedom inherent in Bitcoin.
This is a guest post by Frank Kashner. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
