The rise of cryptocurrencies and blockchains has people speculating whether the technologies will lead to a libertarian future, in which governments and corporations lose their grip on centralized power, an authoritarian future, in which they tighten that grip, or something in between.
Cryptocurrencies such as Bitcoin, and blockchain, the unfalsifiable, incorruptible digital ledger designed to facilitate cryptocurrency trading, were created with a libertarian utopia in mind. Early advocates believed they could be the forces that wrestled control away from governments and corporations because they would make individuals less dependent on centralized intermediaries such as banks.
What some of these libertarians perhaps didn’t anticipate, however, was the extent to which governments and corporations would eventually begin embracing the technologies – particularly blockchain. Increasingly, state powers and big corps are recognizing the potential of blockchain to restructure their operations, making them more efficient, transparent and secure, and could – advertently or not – be solidifying their rule in the process.
The libertarians who pioneered blockchain aren’t happy about this, as it goes against everything they believe the technology was created for (though some argue the intention was to sidestep state-backed currency systems, not replace them). As Ian Bogost writes in The Atlantic, “the irony would be tragic if it weren’t also so frightening. The invitation to transform distributed-ledger systems into the ultimate tool of corporate and authoritarian control might be too great a temptation for human nature to forgo.”
Such a dystopian accusation deserves an opportunity for rebuttal from the side of the corporation. James Zdralek, a Montreal-based software designer for the global tech company SAP, believes the idea that blockchain could lead to total control is flawed because anything made up of individual units – including corporations and governments – cannot have a unified conscience that chooses good or evil. “It’s like judging a group of mold – it either gives you cheese or anthrax,” says Zdralek. “Either result was not the conscious choice of the group of mold cells.
“As members of the group, we just do our best to influence, and hope we don’t end up as anthrax,” he continued. “Humans organize, and governments exist. The net benefit of having governments outweighs the costs. A good government will prevent corporations from spying on people, which they tend to only do to determine who wants what stuff and how to make them buy more anyway.
“The same charges being levelled at corporate interest in blockchain today were thrown at the internet in the 1980s, saying that ISPs recording our names and addresses would lead to 1984. Instead we have targeted advertising, Twitter and fake news. Not utopian, but not dystopian either, and certainly not planned or predicted in advance.
“Furthermore, totalitarian regimes are becoming harder to maintain with the ever-vigilant internet. The ‘dark spots’ – finance, North Korea, Tunisia – are getting smaller, and more people are believing that technologies like blockchain can be used to track and snuff out corporate and government corruption.”
Wendy McElroy, a self-described “individualist anarchist” who writes for Bitcoin News, isn’t quite so hopeful. “A digital currency under their control could be a stride toward a cashless society in which all white market transactions are tracked by avaricious banks, states and corporations,” she warns. “It could usher in unprecedented financial control. Statists have awoken to the power of the blockchain, which would make their usurpation of money and power more efficient.”
Andreas Antonopoulos, a well-regarded figure in the blockchain community, offered a decidedly less bleak and more harmonious vision when speaking to The Telegraph for its thorough examination of blockchain’s anarchistic potential in 2014. “Most of the hierarchical institutions we have built around finance are there to regulate the fact that if you [put a lot of money] under the control of a single person … they tend to steal that money. This technology makes it largely unnecessary. There’s nothing particularly libertarian about that. It’s simply a recognition that you can achieve in software what regulation has failed to achieve.
“This is not some kind of libertarian manifesto, or anarchist manifesto, saying that we don’t need mechanisms for achieving social cohesion,” Antonopoulos continued. “It’s simply recognising that we can create better mechanisms as we solve problems of scale. That’s all. It’s not some kind of crazy ‘we don’t need governments’ manifesto. It’s simply that we can make better governments when we don’t concentrate power as much in the hands of a few people.”
Antonopoulos’ lofty hope seems to be that blockchain and digital currencies can bring international banking to the six billion-plus globally with no access to it, dramatically improving their standards of living. Such a feat, surely, would require a high level of corporate and governmental influence to pull off. Whether it would lead to a global authoritarian regime in the process is anyone’s guess at this point.
For those libertarian dreamers, better living standards around the world would be of small consolation if it meant living under what they consider inescapable rule. As Zdralek implied, however, some form of self-correcting middle ground is the more likely outcome. Like the internet, blockchain will inevitably be seen as democratizing by some, oppressive by others. Some will feel freer; others will feel trapped and spooked. Perhaps the only thing we can be sure of, collectively, is that blockchain will change the world.
For more on how blockchain is transforming finance, see Blockchain? Bitcoin? What Money’s Digital Makeover Means For You.Comments