“I’ve never seen such excitement about double entry bookkeeping!”-Dmytri Kleiner
Blockchain technology has given us is the ability to exchange money tokens directly without an intermediary. In a future stateless communist society we will certainly need such technologies, if indeed we still need quantified exchange. In the meantime, lets be honest, these technologies are about banking. Blockchain technology is an anarcho-capitalist next-generation assault on government, government in general, but especially government regulation of the finance industry. The development of the popular Ethereum cryptocurrency system is so tied up with the finance industry it has been called “blockchain for banks” and “bankchain”. This implies that Ethereum does not disrupt banks at all but rather super-charges them. If you like institutions which make money from lending, institutions specialized in helping the wealthy avoid contributing to society in general, institutions which intensively lobby governments globally to deregulate the finance industry even more after the egregious fraud-caused crashes of the last two decades, you should celebrate Ethereum.
Cryptocurrencies can not mitigate or challenge capitalist exploitation, they intensify. Firstly on the level of hardware, they are offensively energy-expensive and wasteful, crunching useless math for the equivalent of the tap of a notary’s stamp. Besides the blatant disregard for environmental sustainability, the computer hardware production chain is a trail of blood & tears, of unacceptable and unfair labour conditions, more dependency on cryptocurrencies will only exacerbate humanitarian problems endemic to the digital economy. Unfairness is nothing new for the finance industry, it is its modus vivendi, blockchains are simply a novel way to obfuscate usury and to make private investor finance sound advanced and progressive which it by definition can never be.
Another innovation for which blockchain technologies are lauded is the open source architecture with its completely transparent, append-only ledger, where each transaction can be verified cryptographically. This is the core of the so-called “trustless network” ideology which maintains that intermediaries such as banks can not be “trusted” to process transactions impartially. Of course “trust” is not abolished in the “trusted network” but rather shifted to an indistinct, voluntary and irregular array of people who are able and willing to look at blockchain code and ensure that everything is right. Writing the code is one thing, making sure the code is secure, free of bugs, vulnerabilities and does what users expect of it requires significant auditing. This is why the projects which “succeed” are the ones where people get paid. A project like Ethereum got so much credibility so fast because banks were funding development. In otherwords “trustless” in this sense still means “trust the capitalists”.
Technologies alone cannot “improve” societies, no matter how ingeniously designed. The ability to do without “trust” reveals itself to be an extremely privileged position. Anyone with dependents will know how necessary, and fluidly reconfigurable, trust is and must be in a society. Trust negotiations embedded in cultural and social practices have acquired their supple effectiveness over centuries of living close together in towns and cities. The trade-offs and compromises required by social collaboration are part and parcel of the cultural and social techniques we grow up in. There is intractable unfairness here too, of course, and we have inadequate recourse to address these, but to imagine that one can simply withdraw to a safe hiding place behind a computer screen and hardcode massively entangled social relations anew is simply delusion. Computers and network hardware are themselves the result of intense human collaboration on a massive scale.
The computer behaves like a loyal servant, it does what it is coded to do. We have a owner-slave relation with our machines, we are all mini-data-plantation owners. Today much hope is invested in visions of algorithmic modelling of any problem which then can be unravelled by ingenious computational routines. Money may appear the perfect material for futuristic modeling because it is inherently quantified. Money can be converted into all manner of commodities,and, reduced to number in its contemporary form, can appear to be a media for computationally remodeling the world like so much silly putty. This is why projects like Bitcoin and other cryptocurrencies seem so revolutionary and promising. But money is just a technology of social expression, in principle it could be used for the general emancipation of all.
Governments always work in the interest of the powerful. Taxation is often misapplied and unfairly extracted. There is socialism for the rich and austerity for the poor. Automation combined with deregulation of global finance powers global war, terror and the most excessive exploitation-as-usual, as well as resisting any attempt to address environmental emergencies. Under the current conditions, enlightened and enforceable taxation regimes are unquestionably required to adjust the composition of wealth towards sustainable economies which benefit everyone.
Distributed, unfalsifiable, transparent transactional ledgers could help the citizens make informed political decisions and even help distribute decision making towards a truly stateless solidarity society. But this would require a long-term investment in various auditing and interpretation practices. Acknowledging that “the rich will not let us code away their wealth”, “good government”, even as a transitional measure towards the society we desire, will take a an enormous and coordinated struggle on many fronts to achieve. The formidable computational power at our disposal today must be employed not only to model the enlightened fiscal policies we require, but also to simulate the struggles which will be required to enact these. Strategies can be developed, tested and honed for advanced political-economic modeling practices towards speculative scenarios of sustainable general prosperity. Let a million simulated Cybersyns bloom!