Despite its apolitical nature, Bitcoin needs our democracy to thrive just as our democracy needs Bitcoin to improve.
This is an editorial opinion by Frank Kashner, founder of UnChainDemocracy.org.
“Politics” is often defined as “activities related to the government of a country or other region, especially debates or conflicts between individuals or parties who have or hope to gain power.”
Do we want Bitcoin to gain power? Yes, although the power for Bitcoin is different from the power for a single person or economic or political entity. But we still talk about power, as expressed through the design and implementation of code, proof of work (electric power), the internet, exchanges, editorials, blogs, laws, courts, schools and politicians. The Blocksize War, which I am involved in, ends up being a political power struggle, won by those who support node decentralization. These articles and magazines are political actors in the contest for future monetary and political power.
Ultimately, monetary freedom, Bitcoin, is only one aspect of freedom. For those living in the US, another aspect of freedom is our political rights as stated in the Bill of Rights and Constitution. So, even our deeply flawed democracy needs to be defended and extended.
But it seems that many Bitcoiners do not see that way. For example, Jimmy Song, whom I respect and have studied, has argued that, perhaps, our democracy is so flawed that it should be abandoned. But I suggest that Bitcoin and democracy need each other and the alternative, autocracy, would be terrible.
Bitcoin, Forever Caught In The Stream 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 points on the line, we in the Bitcoin community can find unity around the same vision of what Bitcoin in democracy makes possible. But we must also look at 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 famously sang, “Don’t be like a dictator, I’m not much, but I think the whole country should be done… With electricity!”
Electrification, today’s revolutionary technology (not unlike Bitcoin today in some ways), is a technology opposed and supported by various business interests and hired politicians. Even today, a quick search reveals major opposition to electrification efforts.
Like electricity, Bitcoin is and always will be caught in the currents of financial and political power. That’s the very nature of Bitcoin’s massive change. Consider what we have seen: China bans Bitcoin, Canadian trucks use BTC, El Salvador defies the IMF and makes bitcoin legal tender, BTC appears in Ukraine, the US Securities and Exchange Commission (SEC) rejects an application to make GBTC an ETF, Nigerians start using Bitcoin, and now, “Operation Choke Point” as the SEC impedes bank access to Bitcoin companies.
This current asserts the existence of political freedom, a functioning democracy, as well as the legal status of Bitcoin. For further evidence of Bitcoin’s intrinsic relationship to democracy, see The Human Rights Foundation, whose arm is led by Alex Gladstein and which uses Bitcoin to increase political and economic freedom, especially in some of the world’s worst autocracies.
Bitcoin Is More Fragile Than We Think
The list of basic properties of Bitcoin includes decentralization, antifragility, protection against confiscation, an indestructible development system, security of proof of work and protection from defending nodes. However, I feel naive about its power.
It is easy for those of us who live in Western democracies to assume that the rule of law, which protects our property and freedom, is a given. If we live in China, North Korea, Afghanistan, Turkey or Russia, we may not be sanguine.
While Bitcoin makes an attractive Trojan horse (number up, sort of) for some of the rich and powerful, opposing interests can create rules and policies that can eject Bitcoin from the gates of monetary empire. Yes, we can still do it “underground,” but think about what it would be like.
Today, Bitcoin is small, and those in power have subtle ways of delaying and denying widespread adoption, such as claiming that “mining destroys the environment” or claiming that “bad actors like Sam Bankman-Fried are political operatives.”
Consider how authoritarian governments that use threats of imprisonment and violence treat Bitcoin. They have no problem with confiscation, even if they seize mining machines (as happened in Venezuela).
And there is another issue with what is considered the immutable nature of Bitcoin: Why are there so few core developers, and what implications does this have for the future of Bitcoin? Why are there so few nodes (about 16,000) relative to the total number of Bitcoin users? Why do government agencies facilitate the exchange and promotion of misinformation about energy value and usage?
It is our democracy that allows Bitcoin supporters to advocate, lobby, broadcast, own businesses and go to court. But our democracy, however fragile it may be, is increasingly threatened by corporate forces that dislike regulation and autocratic power for themselves. I predict that they will defend the US dollar-based system. To win, Bitcoin and democracy supporters need each other.
Some announcers in the Bitcoin arena or their guests claim that the managerial and political class has all the power. This is simply not true – see, for example, “Who Rules America?” by William Domhoff, “Dark Money” by Jane Mayer, “Democracy in Chains” by Nancy MacLean or “Shadow Network” by Anne Nelson. This is documented evidence of how those who would turn the United States into an authoritarian state have significant power and have been advancing their agenda for the past 50 years.
In conclusion, Bitcoin needs democracy and democracy needs Bitcoin. Both systems are dynamic and continuous, 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 help democracy advocates to pay more attention to the economic freedoms 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.