Every time you spend money, you’re casting a vote for the kind of world you want -Anna Lappe
So Bitcoin has been in the news a lot over the past few months. I have a fascination with Bitcoin; I’d guess I’d liken it to someone slowing down to look at a car crash, though in all fairness we don’t know if it will be a car crash yet. In case it wasn’t obvious from that previous sentence I have a bit of a distaste for Bitcoin and I wanted to explore that a little.
But let’s rewind a little and go back to the beginning.
What is Bitcoin?
It’s like PayPal for drugs. Wait, hang on. No angry emails please. That may be accurate, but it’s not fair. For that I’m going to summarize an article from Darren Hobbs. Bitcoin is a cryptocurrency – a type of digital money – designed to eliminate the need for third parties (like credit card companies or banks) and to deal with the problem of inflation. The major selling point is that it allows people to transfer Bitcoins between each other without the need for a third party like a bank.
What’s my problem with Bitcoin?
I’ll be honest, I’m not 100% sure. I’m a big believer in the idea that, to some degree, everything we do is political. What we buy, how we dress, who we talk to, all of that is an extension of our beliefs (or lack there of). I mean, some of that is going to be dictated by circumstances and the situation but the principle stands in general. I think that we can all agree that what we buy says something about our politics; the choice between a buying a Hummer and a Prius is probably to some degree a declaration of politics. If that’s the case then isn’t the way that purchase is made also important?
I’d say yes.
If you have problems with the execution of the current economic system – rather than say with the principle of the system – then Bitcoin lets you operate without using, and therefore giving power to, institutions that you disagree with. In the case of sites like Silkroad (see the stories above) it also allows you to purchase some things that you would otherwise have difficulty procuring. You can make an argument that that is also valid. It also can’t be taxed, at least until you try and convert it to another currency.
So what’s the problem then? Well I’d say there are two issues that I have. Let’s break them down.
If you spend any significant amount of time online in the nerdier underbelly of the internet then you’ve probably been inundated with propaganda from Bitcoin evangelists for years. I’d rank my experience with Bitcoin evangelists right behind Ron Paul supporters on the I Understand Your Point But You’re Annoying As Fuck scale. Part of this is because Bitcoin evangelists seem to be a heady mixture of free staters, investment bankers, people who are waaaaay too keen about LSD, Guy Fawkes mask purchasers, and people who insist that taxes are a form of violence inflicted upon them (but who ignore the benefits, like you know, roads and schools). All of whom insist that it will solve all the world’s ills.
I think that’s more of a problem with me though. A recent study from the University of Toronto looked into the way bias around certain issues effects the way people view others. One that stood out to me, because of personal involvement, was that there is resistance to tackling environmental issues because some people see environmentalists as “tree huggers” and “hippies”. I’ve worked a lot on environmental issues so this understandably rubs me the wrong way and I can’t imagine that the same phenomenon that annoys me here isn’t working it’s magic on me in regards to Bitcoin. My distaste for the evangelists (or at least my perception of them) is influencing my views on the issues to some degree and that’s not fair.
I don’t want to let the evangelists completely off the hook though. There’s a certain strain that are actually being detrimental to the overall perception. Take this article for example. Wired spends an entire article talking about homeless people who survive using Bitcoin. Except they aren’t. Bitcoin is only part of the picture. Wired says,
The bitcoin system could become an equalizer for the country’s homeless, a place where the stigma of living on the streets isn’t as pronounced.
which is utopian tech wankery for the sake of a novelty. I’m not saying there aren’t some real benefits to Bitcoin for homeless people (namely a way to remotely store money without needing a fixed address) but that quote ignores a whole host of issues and variables and does almost nothing to address the socia-economic realty that this specific set of people found themselves in. It’s Bitcoin boosterism disguised as activism. A cooptation of other issues as a way to promote a pet project. I frankly find that a bit offensive but that may just be because I feel that homelessness is a more important issue than, say, who controls the Federal Reserve.
The cooptation of politics for money
My second issue, which is kind of related, is the fact that for a lot of people Bitcoin isn’t a form of protest. It’s a stock that they buy and sell for financial gain. I guess the question is then whether it matters if a legitimate form of activism is getting used for something else. Again, this rubs me the wrong way but that’s my biases showing. To go back to environmentalism, I can’t say that I think that companies profiting off of renewable energies or selling organic foods delegitimize the cause. I mean sure, they might dilute the message or complicate the discussion of the issue but it doesn’t invalidate it.
With Bitcoin, and this might just be because of the enthusiasts I’ve encountered, it seems to me that the majority are more concerned about making money then about promoting the cause. The cause is ancillary to the profit. People treat it like stocks. A stock exchange fueled (at least in some small part) by ethics. Is that a bad thing though? Wouldn’t it be better if real stock brokers acted like that. But making money is a way of promoting the cause. I can’t fault someone for buying stocks in a solar panel company even if they don’t have a real interest in renewable energy. Either way it promotes the adoption of that technology.
The wrap up
Even after all that rambling and vacillating I still have to say that I’m still skeptical of Bitcoin. I get the premise behind it but I can’t say I’m keen. Maybe I’m wrong, I probably am. I’d be happy for anyone to try and convince me in the comments below.