Bitcoinsanity 2: Revolutions in Rhetoric

By David Golumbia | Published: June 26, 2014

Bitcoin is touted, publicized and promoted as an innovation in financial technology. Usually those doing the promoting have very little experience with finance in general or with financial technology in particular–a huge, booming industry mostly made up of proprietary technologies that those of us who don’t work for major banks or trading firms know very little about–but are happy to claim with tremendous certainty that this particular financial technology is utterly transformative.

(As a side note, the blockchain itself is not inherently financial technology, and it may well prove more useful and interesting in contexts other than finance, such as the “fully decentralized data management service” offered by companies like MaidSafe; these kinds of developments are preliminary enough that I don’t think it’s yet possible to judge their usefulness).

Like certain other rhetorical constructions (e.g. “Arab Spring,” “open”), at a certain point the rhetoric and the discourse it engenders start to seem as much of the point as are the underlying technical or political facts. The rhetoric overtakes those facts; it becomes the facts. Unlike the “Arab Spring,” Bitcoin can be even harder to see from this angle, because it really is a piece of software, and a distributed network of users of that software.

Regardless: unlike some pieces of software, and like other social practices, Bitcoin’s main function so far is rhetorical. Bitcoin enables and licenses all sorts of argumentative and rhetorical practices that would not otherwise be possible in just this fashion, and the creation and propagation of those practices has become important–perhaps even central–to whatever “Bitcoin” is. This is not peripheral, unavoidable, unexceptionable tomfoolery; it is a core part of what Bitcoin is. Until and unless Bitcoin actually starts to function as a currency (meaning that its value stops fluctuating for a significant period of time) or admits that “value fluctuations” and “currency” are incompatible with each other, this will continue to be the case.

It’s not in any way peripheral. No matter how many of them I read, I am still astonished at the number of pieces that come out nearly every day that “explain” how Bitcoin works (although what they actually describe is the blockchain technology), then give some examples of Bitcoin being exchanged in the real world, then move to “Bitcoin is revolutionizing finance” to “Bitcoin will revolutionize everything” without in any way connecting the dots to what these concepts actually mean as they are used today. Why, just across the transom as I’m writing this comes “How Bitcoin Tech Will Revolutionise Everything from Email to Governments” out of “Virgin Entrepreneur” (run of course by the well-known decentralizer Richard Branson, who surely invests in technologies because they are likely to defuse radically the power of his enormous wealth) where anti-statist libertarian comedian (and if those aren’t qualifications to dismantle the world financial system what would be?) Dominic Frisby (@dominicfrisby) proclaims that the “wonderful Ayn Rand stuff” of which the blockchain is constructed leads us to ask:

What indeed will be the purpose of representative democracy when any issue can be quickly and efficiently decided by the people and voted on via the block chain? The revolution will not be televised. It will be cryptographically time stamped on the block chain.

Well, what is the purpose of representative democracy? One might well ask that question as one advocates the loosing of a technology on the world designed to render it impotent. In the US, and in most of the democratic world, we have representative governments bound by laws and constitutions specifically to avoid the well-known dangers of majoritarian rule and of letting each person pursue their “wonderful Ayn Rand” interests without any sort of check on their powers.

Bitcoin provides a whole new iteration of the far right’s ability to sell these once well-discarded ideas to an unsuspecting and (ironically, in the “information age”) incredibly uninformed public about the way government works and the way democracy and laws have been carefully constructed to work over hundreds of years. Yes, they work incredibly badly. The only thing worse than the way they work is to get rid of them entirely, without any kind of meaningful structure to replace them. After all, we know a lot about what completely unregulated democratic discussions look like today–we need look no further than reddit or 4chan or Twitter. Imagine what that kind of logic and conduct, magnified into governmental power, looks like. Actually you don’t have to imagine, because we are seeing plenty of companies today take that power for themselves, existing laws and structures and regulations be damned.

Here, I’ve collected just a small sampling of real-life statements from Bitcoinistas that demonstrate the level of rhetorical know-nothingism for which Bitcoin is particularly (although by no means exclusively) responsible right now. Most of them were reported by the great Twitter accounts Shit /r/Bitcoin says (which, as the name implies, samples quotations from the /r/Bitcoin subreddit) and bitcoin.txt. Word of warning: if any of what you read in these comments makes sense to you, I probably think you need to read more. A lot more.

Thoughts on Banking, Taxation, & Monetary Theory for Which John Maynard Keynes Bears No Conceivable Responsibility

Of course the government want to control the currency. They want to have ultimate power over everything, the people be damned. Digital currency can compete with the fiat banking system which is used to loot the value of currency on a continual basis. (Source: Robert Zraick, Jan 2013, comment on Forbes article)

bitcoin on reddit

Bitcoin on Reddit (Source: @RedditBTC)

Political Science You Won’t Find in John Locke or The Federalist Papers

Bitcoin is a direct threat to corrupt governments who control and manipulate currency, and use taxpayer funds to buy votes. You better believe they’re going to ban it! But mutual barter systems will prevail on the web… and it’s a great thing. It will destroy the power that government yields uncontrollably and put it back into the hands of the people where it belongs. (Source: Douglas Karr, Jan 2013, comment on Forbes article)

Economic Theory, Courtesy John Birch Society

I understand how they work… unlike ANY of the old-school economists, who also failed to predict the 2008 crash, and who just went along with what it was acceptable to say. The more “established” an economist is, the more likely they are to be wrong about bitcoins. This has been the pattern so far. You might as well ask the doddering self-entitled satin-tour-jackets wearing old twats from the RIAA about torrent protocols. (Source: Genomicon, Apr 2, 2013)

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