Good morning, beloved -
The following is a passage excised from my book of 2017, Radical Technologies, which in retrospect I have always regretted leaving out. I think it would have made the book’s critique of blockchain and cryptocurrency technologies much sharper.
The moment for this critique has very probably passed. But I’ve always been proud of it, as a piece of thought and writing, and I’d like to offer it to you now. To be sure, it still bears a few traces of its vintage, but I hope you enjoy it nonetheless.
§ Bitcoin didn’t just arrive on Earth from nowhere, as though suddenly phased in from some mathic hyperspace of pure abstraction. It landed in a culture medium that in many ways was already primed to be receptive to arguments about the dynamism of the market, the meddlesomeness of regulators and the sheer hapless inefficacy of government. After four decades of neoliberal hegemony, during which the hostility toward the possibilities of government expressed in California’s Proposition 13 tax revolt of 1978 became all but universal in the power centers of the West, these are hardly controversial positions. Following the coming to power of Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States, the once-marginal rhetoric of the free-market right took hold at every level of the economy, and of the society market ideologues regarded as being coextensive with it. Over the next forty years, the idea that education, healthcare, transportation, energy, corrections, the projection of military force and even municipal emergency services[1] should be delivered by private actors became thoroughly normalized, alongside a parallel and carefully-nurtured cynicism about politics and politicians. We now share our world with two generations of adults for whom the exercise of political choice is largely a pointless quadrennial charade, and the provision of nominally public services by private enterprise merely the unremarkable furniture of the world.
But if libertarian thought resonates in certain ways with the values of the mainstream culture, it has always found itself most especially at home in the software development community, and more particularly still among those drawn to the overlapping domains of information security, privacy and cryptography. There are of course libertarianisms of the left and of the right, and both streams are represented in this community of interest — PGP developer Phil Zimmermann, for example, is notable for his work on behalf of peace and nuclear disarmament, and organizations like the Electronic Frontier Foundation and the Chaos Computer Club are heavy with people who would think of themselves as being in some way of the left. The tenor of political belief among experts in infosec and cryptography, though, is often that of a radical market individualism, profoundly mistrustful of any claims regarding a common, shared or collective destiny.
The blockchain was proposed by someone or -ones who chose to veil themselves behind a cloak of pseudonymity, in the context of a distinct human subculture that placed great value on that pseudonymity, and understood it in a very particular way. If we want to know more about the values embedded in the Bitcoin protocol, it’s helpful to understand just a little bit about the milieu Satoshi emerged from, regardless of who he actually is or was — even if "Satoshi" turns out to have been a project of the NSA, as some of the more conspiracy-minded observers of the Bitcoin phenomenon continue to maintain. What do the people responsible for the development of cryptocurrency believe, specifically? What cause or causes are they trying to advance in their work?
Again, there's no mystery. If I can fairly gloss the core beliefs of people I disagree with so profoundly, those drawn to cryptocurrency for ideological reasons hold the absolute sovereignty of the individual at the very center of their worldview. In their writings and other proclamations, they tend to appeal to the authority of a small and reasonably predictable collection of forebears, all of whom exalt the individual against the mass: Mises, Rothbard, Hayek and other economists of the Austrian school; Nietzsche, Stirner and Sade; the less intellectually agile among them, inevitably, Ayn Rand. And bolstered by this body of thought, they unsurprisingly ground their work in assertions that "real privacy," unimpeded personal freedom, and contract between individuals in a free market for goods and services, are far and away the best guarantees of collective freedom.
Individualists of this stripe naturally recoil from the state, convinced that its overreach is and always will be the preeminent threat to their freedom. But their disdain for anything that smacks of the mass or the collective runs deeper yet. Regarding constitutionalism and its ostensible rule of law as unreliable guarantors of liberty, they seek instead to found freedom on computational and cryptological means. Cypherpunk list co-founder John Gilmore characterized this as ”a guarantee — with physics and mathematics, not with laws — that we can give ourselves real privacy of personal communications." Some have proclaimed their frank contempt for democracy itself — Peter Thiel, for example, regards democracy as something "incompatible with freedom."
The individuals working most fervently to develop cryptographic tools, then, have taken flight from these core institutions of the West, convinced that they personally wouldn't much suffer from the contraction of their influence, and perhaps not much caring what might happen to anyone else. Cryptocurrency enthusiasts inclined to this view are fond of citing a 1999 interview with economist Milton Friedman[2]: “I think that the Internet is going to be one of the major forces for reducing the role of government. The one thing that’s missing, but that will soon be developed, is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B, without A knowing B or B knowing A.” As a valued advisor to both Margaret Thatcher and Ronald Reagan, of course, and a chief architect of the free-market "reforms" imposed under their guidance, Friedman knew a thing or two about reducing the role of government. But even he couldn't have foreseen the degree to which advocacy for strong crypto would get bound up with the will to do away with it entirely.
It's a long step from mistrusting concentrations of power, after all, or even taking action to reducing the scope of government, to believing it can be safely dispensed with in toto. A confession as to the shape of belief at the core of his work on cryptocurrency is offered by Bitshares’ chief developer Dan Larimer[3]: “Where I am going is a world where all interaction with our fellow man [sic] is entirely voluntary, where you no longer need to rely on government to settle disputes. In fact, decentralized technologies will make governments entirely irrelevant, ineffective at being able to do anything.”
Again, this makes sense if you can be convinced to regard government as merely a stopgap technology on the way to something more supple and just. But like so many of Buterin’s articulations, there's a burn-it-all-down quality to Larimer's thought — an unyielding insistence on ideological purity that feels profoundly adolescent, and suggests that neither suppleness nor justice is actually at the forefront of his thoughts. Even those of us who on balance do feel that government is too clumsy, too intrusive, too micromanagerial and too susceptible to the arbitrary exercise of tyranny generally understand it as a complex envelope of trade-offs, not an implacable evil to be overthrown in glory wherever and however it arises.
These beliefs are neither new nor shallowly held. They have been articulated in the greatest specificity and detail by members of this community, over a very long period of time. Veteran observers of the crypto scene may recall that the cypherpunk mailing list, where so many of the concepts beneath the blockchain were first bruited about, was founded by an engineer named Timothy C. May. To the uninitiated, Tim May's sig file (remember those?) might have seemed like the word-salady, non sequitur ravings of a schizophrenic. But to anyone sharing his frame of reference, it constituted a coherent agenda: “Crypto Anarchy: encryption, digital money, anonymous networks, digital pseudonyms, zero knowledge, reputations, information markets, black markets, collapse of government.” A lot of that seems astonishingly prescient now — certainly the first half of that string of technolibertarian shibboleths, anyway, has now actually fallen into place, more or less in the order specified. And this is not at all coincidental. It would be salutary for us to remember that this was someone’s political program, consciously pursued and slowly worked toward, over the course of decades. The blockchain — and everything that grows from it, like smart contracts, smart property and distributed autonomous organizations — is the fruit of a sustained project and culture.
§ Certain strains of thought running through the cryptocurrency endeavor are inherited from its roots in information security, the field dedicated to defending information against unauthorized access and use.
Every realm of human endeavor reliably reproduces a certain characteristic affect in those who long practice it, and information security is no different. Beyond the fascination with codes and cyphers in all their forms, one often encounters in the community an endemic curiosity about access and its modulation throughout human history; attend any infosec conference, and I promise you’ll lose count of how many of the people you meet have taken up lockpicking as a hobby. That pursuit in itself is innocuous, and can even be intriguing, so long as you're able to retain patience with people who so strenuously insist on their roguishness. But there’s something in this subculture that I, at least, find darker and harder to deal with, which is a boundless cynicism about human motivation and reliability.
I’ve heard more than one infosec specialist repeating a sentiment Intel founder (and refugee from Stalinist Hungary) Andy Grove expressed in a different context: “Only the paranoid survive.” However repellent its implications may be otherwise, this institutionalized suspicion is appropriate in those for whom eternal vigilance is part and parcel of the job description. A certain leavening realism about human frailty and the degree to which people and the systems we devise are likely to disappoint us can be healthy; more than that, it's occasionally useful to be reminded that the capacities of others may be truer guides to their impact on our lifechances than any motives and intentions they may espouse. But it is one thing to tolerate such perspectives tactically, among a population whose responsibility it is to monitor and counter threats on our behalf, and quite another to enshrine them at the core of our everyday politics.
It is in the context of infosec that the trustless paradigm first arises. And in this regard, perhaps it’s worth mentioning the very notable incidence of fraud, theft, deception and dissension[4] among the cohort working to establish systems embracing that paradigm, from the collapse of the Mt Gox exchange, to the schism among Bitcoin Core developers[5] that emerged the moment their pecuniary interests started to diverge from one another, to the most recent example, the draining of The DAO. It can’t be as simple as what one looks for in the world, one will find. But neither, I think, is it entirely unrelated that a community so deeply suspicious of trust itself has signally failed to build trustworthy institutions.
The terrible irony in all the talk of trustlessness, of course, is that the overwhelming majority of those using applications running on any blockchain whatsoever would be hard-pressed to describe its basic operating principles with any accuracy. The responsibility for enormous sums of value has therefore been reposed in an intermediary most people cannot remotely comprehend, and whose operation on their behalf they are more or less compelled to take on faith. They trust it, and however uneasily, they trust the small cadre of developers responsible for maintaining its protocol to act with wisdom, fairness and integrity. Trust is everywhere in blockchain world, however difficult it may be for the professionally paranoid to admit or come to terms with.
§ The institutionalized paranoia that cryptocurrency practitioners inherit from their colleagues in the infosec community manifestly remains a factor in the way blockchain applications are designed and used: it’s baked right in. But as an influence, its significance recedes into the background when compared to the obsessive recapitulation of market values. As we’ve seen in our discussion of smart contracts and smart property, these values constantly leach into discussions of blockchain technology, in big ways and small.
Barclays VP Simon Taylor’s remarks, published under imprimatur of the British government, make this explicit. He admits that the advent of the internet transformed the way in which the multitude communicates and organizes itself, but goes on to observe that “there has been no successful way to embrace these [changes] in a secure way while continuing to promote free markets and guarantee contracts[6].” There is never a thought here that these technologies might possibly be leading somewhere more interesting, more fruitful or more just. As incumbent institutions see matters, the blockchain is simply a way for them to realize the benefits of distributed intelligence without having to put the ball in play politically. What is fundamentally recorded in a blockchain, after all, is property rights: who owns and controls the rights of use and enjoyment of a given resource, in an entirely classical and unreconstructed sense. Without doing too much damage to the idea, we can think of a distributed ledger — whether the original Bitcoin blockchain, or any other — as a long list of who owns what, identical copies of which are held by a great number of parties spread out all over the world. And this amounts to a monumental reinscription of ownership and the property relation, at the very moment in history when something like a networked commons becomes possible.
At first blush, this might seem to support a rather appealing narrative about self-sufficiency and economic justice. Aided by blockchain technology, we can imagine currently impoverished individuals and communities monetizing things the twentieth century had no practical way of attaching value to: the sunlight falling on a slum shack’s roof, one’s awareness of real-time local traffic conditions, or the increments of attention one has left between preparing meals and caring for babies. For that matter, long experience suggests to me that the planet’s hardscrabble informal entrepreneurs, by and large, don’t have anything in particular against capitalism — they just want a bigger share of it[7]. Maybe they’d be OK with a fully blockchain-mediated economy, if it let them participate on terms that more closely resembled parity with formal institutions. We can imagine them, or the things they own, making local markets in energy or processing power, leasing out a spare room, a vacant station in their nail salon, unused cargo capacity in the bed of their truck. And as I’ve said, if we really are limited to choices between flavors of capitalism, a world of networked, intermeshing, semiautonomous cooperatives seems infinitely more appealing than one comprised of endless, faceless megacorps.
But the cost of being able to imagine stories like these is that at the same time other, more predictable and far grimmer tales are made possible. We already surrender so very much in our lives to the logic of the market; the Harvard economist Michael Sandel wrote a whole book about it[8], in fact, and it makes for unrelievedly depressing reading. What we take up, in embracing the implicit vision of cryptocurrency, is the total colonization of the everyday by a mechanism for the metering of value. Maybe it will wind up being seized by those without means. But if there's anything experience has taught us, it's that anything capable of being grasped by the poor can still more capably be leveraged by incumbents with means — we need only consult John Turner, Hernando de Soto or Oscar Newman for a bitter lesson in how easily a commitment to the informal practices of the impoverished and powerless can be recuperated by powerful market-oriented institutions.
In the world of exchange the blockchain ideologues want to build, we are left with no state, no government, no overt acts of coercion — just contracts as far as the eye can see, a continuous fabric of them running straight to the horizon. In this world, as in ours, the ability to "monetize excess capacity" tends to displace other, nonpecuniary ways of sharing it out (or for that matter letting it remain just that, an excess, which has real uses as a buffer and a shock absorber in circumstances of unexpected demand). There is no beyond, no outside. This world has successfully cast off the reviled shackles of state, to be sure, but it has done so at the cost of turning every last circumstance of life into a market.
And this goes to a fairly deep question, which is that we long ago collectively decided we don’t wish to tolerate markets in certain things. Of course the precise list of commodities that are beyond the pale varies from place to place and culture to culture; of course these things range from the unspeakable (death futures, assassination contracts, a child’s virginity, human organs, human beings) to the ludicrous (Kinder eggs, casu marzu). But only the most ardent libertarian absolutist can fail to be sobered by the idea of a completely unregulable market among effectively untraceable actors, trading whatever they please via automatically executing contracts.
Except, that is, that libertarians never do seem to be sobered by everything that happens in the aftermath of their excesses. Nor do they generally appear to be bothered overmuch by oppression, when that oppression is private. In their frankly autistic* conception of sovereign actors unconstrained by history, free to enter into or leave freely contracted relations as they will, they rarely seem to recognize that injustice takes other aspects than simply the most obvious forms of government oppression. How much of human history do you have to deliberately ignore, overlook or suppress, then, before the distributed autonomous utopia they claim to believe in becomes remotely credible? Against the backdrop of experience, what in some lights might seem an entirely laudable attempt to distribute power more equitably among us can more clearly be seen for what it is: a culpably naive refusal to reckon with the reality of power as it exists now, as it has existed throughout human history, and as it will no doubt continue to exist in the transhuman epoch. What needs saying, always, is that the world is more than property, contracts, sovereign individuals and free markets. We are more than that, whatever we may become.
§ I emphasize this last point because, for not a few of the activists at its very heart, the effort to establish an economy based on cryptographic systems is ultimately just one segment in a much longer arc of aspiration, one that extends far past even Tim May’s desired halting state. We have seen how the impassioned volunteers of the cryptocurrency community founded their design of the blockchain and the tools around it in a equally passionate rejection of the state and its law. But the antinomianism often goes still further, toward a refusal to acknowledge apparently binding physical limits, such as death and entropy.
This program directly descends from a body of thought developed in the Silicon Valley of the 1990s[9], in the community gathered around Extropy magazine. Extropians held, in addition to all the more usual libertarian beliefs, fervent commitments to life extension, cognitive enhancement, artificial intelligence and (privatized) space exploration. They aimed to secure for themselves the maximum possible ambit of freedom, as if all the resources of the Earth itself were insufficient to fuel the desires of the properly awakened ego.
The Extropians, it must be said, were often ridiculous. They swanned around the pleasant Bay Area climate in squeakingly-new black cowhide, like officebound Chekists gone all nostalgic for the barricades — black leather was for them what smoking was to the circle around Ayn Rand[10]. They gave themselves ridiculous names: Extropy founders Max More and Tom Morrow come to mind, along with More’s partner Natasha Vita-More. They hawked ridiculous theories of “infinite bandwidth” and human consciousness uploaded into immortal, endlessly fractal “bush robots.” It was easy to imagine them all lulling themselves to sleep each night with dreams of rewriting Atlas Shrugged at the scale of the solar system. But for all the pong of pubescent wish-fulfillment that hung over their visions, they were nevertheless profoundly influential, to the degree that a Singularity University peddling many of the same ideas is a pillar of contemporary mainstream thought in Silicon Valley. And it’s this particular, harder flavor of technolibertarianism that has its fingerprints all over Bitcoin and its related technologies. Recall that it was an Extropian conference at which Nick Szabo first proposed the idea of smart contracts. The mailing list to which Satoshi first posted the original Bitcoin paper was (and still is) hosted by Perry Metzger, onetime Extropian and self-described “transhumanist market anarchist”; Hal Finney, close Satoshi associate and recipient of the world's first Bitcoin transaction, is currently having his head preserved — minus the rest of his body — at that mainstay of cypherpunk optimism, the Alcor Life Extension cryogenic preservation facility.
Even when the connections aren’t literal and explicit, the withering Extropian contempt for the merely human often saturates discourse around the blockchain. Consider this offhand characterization from Melanie Swan: in her book on next-generation blockchain applications, Swan posits “the general problem of poor (i.e., irrational) human decision making[11]” as something "which might be improved with automated mechanisms like smart contracts." Never mind that smart contracts lock in a static, time-bound perspective, against an unfolding of history that we all know to be dynamic and unpredictable. Put to one side, as well, the thought that there's nothing magic about contracts, "smart" or otherwise, that prevents them from inscribing irresponsible decisions on the world with as much force as more considered ones. What is notable in Swan’s argument is the casual dismissal of the way in which ordinary people assess the courses of action available to them, weigh the evidence for and against each, and make their choices.
Here we’re presented with the makings of a machinic economy capable of absconding entirely from its human objects, or at least making do without them to a still greater degree than is presently the case. We can see value functions peeling off, lifting up and away from merely human valuations of resources (including those we’ve been taught to regard as human resources). This is the final transvaluation of all values, accomplished by autonomous, self-executing code running on a distributed global mesh of processing Things. It’s not the Singularity rapturously awaited by the geeks, but it may as well be for all it leaves of the Earth and the earthly. At that point to be human is to belong to a lumpen biomass denied even whatever paltry dignity attends serfdom. We’re merely supernumerary, surplus to requirements, unworthy even of contempt and due at best only an indifferent maintenance. The blogger Anne Amnesia calls this human residue “the unnecessariat[12],” and that is truly le mot juste. We, you and I, are simply unnecessary to the fully realized posthuman, something to be cast behind in their maximum reach outward.
This is the context in which we need to interpret the rhetoric about autonomous agents and organizations. They are conscious steps toward a trans- or even entirely posthuman ordering of the world, not because their designers imagine autonomous technologies working alongside human beings in fruitful, comradely relation, but because they conceive of humanity as something to be transcended. Quite simply, this is who these people are — who, to their credit, they’ve never made any bones about being. Given their demonstrated ability to sustain purposive activity across three decades, they have to be regarded as consistent, disciplined, highly capable, and absolutely dedicated to developing themselves the tools and infrastructures they think will bring about their preferred order of being most swiftly. This doesn’t at all mean that they will achieve their desires. But one of the things history teaches us is that when people who intend to change the world in this way publish their plans and describe their motivations, we might want to consider taking them at their word.
§ As we’ve seen, the first-generation cryptocurrency developers were all committed believers, explicit in their ideological orientation. They may not have been particularly nice people, as people who model their lives on those of Neal Stephenson characters will tend not to be. But they were clear about what they wanted to see happen in the world, and what they thought their work would result in. Almost to a one, they were and are fiercely bright, able to hold their own and think productively at the intersection of multiple, highly esoteric disciplines — game theory, economics, network science and computational finance, to name only a few. We may surely question their values, but we can’t wave away that torching flare of insight.
The new blockchain enthusiasts at JPMorgan and IBM and McKinsey are different. They’re joiners, nonentities — patently the kind of narrowly overachieving mediocrities who look for insight in the Harvard Business Review, as if the HBR itself hadn’t been playing catchup with actual disruptive innovation for fifty years. Their ideology is of a yet more dangerous type. They think in the clunkiest of givens: that the fundamental furniture of the world is comprised of governments, banks and customers; that people are naturally and consumingly interested in profit above all else; that competition is the lifeblood of the universe.
Whether they’re quite aware of it or not, the intention of people like these is to defang distributed-ledger technology, and make it safe for adoption by status-quo institutions pursuing status-quo missions. At their hands, this allegedly disruptive set of tools can only endlessly reproduce more of the same. (Just because someone is capable of mouthing the words “black swan event” doesn’t mean they're either equipped or prepared to imagine actual outside-context problems.) In this light, we can think of Buterin and his ilk not so much as useful idiots in the classically Leninist sense as useful geniuses, whose brilliance has nonetheless failed to protect them from their exploitation by yet-more-powerful actors. Intentionally or otherwise, what they have laid the groundwork for is unending domination of the multitude by the tiny number of actors, organizational or individual, who understand how blockchain technology works, and how it might be wielded most effectively.
The writer William Gibson famously described the cyberspace he imagined as a “consensual hallucination." This is equally, of course, the way of all money, which bears only so much value as we collectively believe it does. But it's more generally true of other things as well. The arrangements of the world have force and puissance because we invest them with such, and they subsist only so long as we continue to do so.
In sociology, this is known as the Thomas theorem: when participants in a social situation agree to define something as real, it is real in its consequences. This is what has happened with the blockchain. Driven both by their hunger to coopt a technology that might bolster their prerogatives, and by their fear that it might disrupt the bases of their power, the incumbent institutions of government and finance chose to define the blockchain as a real thing. And in so doing, they invested it with their own grandeur. The consequences of that decision are now ours to reckon with.
This is how a very small group of ideologues — so bright in such a very particular way, so certain of their own brilliance — brought forth upon the world something that may yet wind up achieving the opposite of most everything they intended for it. Despite the insurgent glamor that clings to them still, blockchains and distributed ledgers enable the realization of some very long-standing desires on the part of very powerful institutions. The likelihood that in time they will not somehow bring these techniques to bear on the set of challenges they perceive is very difficult for me to credit. It is of course foolhardy to believe that anything so complex as the blockchain might ever be thoroughly housebroken, but we need to prepare ourselves for the eventuality that its advent will only accelerate existing tendencies and consolidate existing distributions of power in the world.
*Not a word choice I would make today. Forgive me.
1 Ivory, Danielle, Ben Protess and Kitty Bennett. “When You Dial 911 and Wall Street Answers,” The New York Times, June 26th, 2016. http://www.nytimes.com/2016/06/26/business/dealbook/when-you-dial-911-and-wall-street-answers.html
2 Friedman, Milton. Interview, 1999. https://www.youtube.com/watch?v=6MnQJFEVY7s
3 CoinTalk podcast Episode 15, “Ethereum, Mastercoin and Bitshares discuss the future of crypto,” February 3rd, 2014. https://www.youtube.com/watch?v=w-9miCOsg4g
4 Hearn, Mike. “The resolution of the Bitcoin experiment,” Medium, January 14th, 2016. https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7
5 Waters, Richard. “Bitcoin’s future threatened by software schism,” Financial Times, February 11th, 2016. http://www.ft.com/cms/s/0/0cbb3efe-d0ca-11e5-92a1-c5e23ef99c77.html
6 Taylor, Simon op cit. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf
7 Mörtenböck, Peter et al. Informal Market Worlds: The Architecture of Economic Pressure, Rotterdam: nai010 publishers, 2015.
8 Sandel, Michael. What Money Can’t Buy.
9 While Extropianism was distinct from the mainstream Californian Ideology anatomized by Barbrook and Cameron in their 1995 essay of the same name, there are important continuities and points of overlap between the two — even, as in the embrace of the cypherpunks, places where the two streams ran in parallel for quite some distance.
Barbrook, Richard and Andy Cameron. “The Californian Ideology,” Mute, Volume 1 No. 3, December 30th, 1995. http://www.metamute.org/editorial/articles/californian-ideology
10 Thomas, William R. “Smoking,” The Atlas Society, September 30th, 2010. http://atlassociety.org/commentary/commentary-blog/4118-smoking
11 Swan, Melanie. Blockchain: Blueprint for A New Economy, Sebastopol CA: O’Reilly, 2015.
12 Amnesia, Anne. “Unnecessariat,” More Crows Than Eagles, May 10th, 2016. https://morecrows.wordpress.com/2016/05/10/unnecessariat/
This is Dispatch from London No. 153 of Friday, 12 December 2025, offered to you under the terms of a Peer Production License. You are free to reuse this content, but must acknowledge Adam Greenfield as its author. ◊