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Bitcoin Is One Of The Rare Opportunities To Lead Technological Progress In The Right Direction

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Published on September 8th, 2021

We’re on vacation for a good week, and you get a long read about the liberal ideologies behind Bitcoin and why digital cash is worth almost any price that society has to pay for it.  

And it’s that time again: Bitcoinblog.de is on vacation for a week. From today until September 17th there will be no new articles here. Then it goes on as usual.  

For entertainment until then, I will publish a sample chapter of my book “Bitcoin: The crazy story of the rise of new money” here. If you want to order the book, you can place an order on the website of my book about Bitcoin. If payment is made before Monday, September 10th, I will bring the book to the post office on Monday, otherwise not until September 17th. Alternatively, you can take a look at the book’s Amazon page; I’ve actually already sent a package of books to Amazon, but I’m still waiting for them to arrive. As soon as that is done, the book should also be delivered by Amazon.  

The section I am publishing here begins on page 265 of the book. It deals with the question of which ideology is behind Bitcoin stands, and why digital cash is an advancement for humanity, despite the clear risks and disadvantages. The chapter is one of the most theoretical and abstract, but also one of the most important in the book. I hope you enjoy it. If you are interested, then you can view platforms for growing cryptocurrency here BD. 

Ideologies Of Freedom

Everyone knows that Bitcoin is not innocent. Everyone knows that terrible things are paid for with crypto coins, that they are cheated, hacked and blackmailed.  

And yet everyone who works with Bitcoins will say that they do this out of idealism. Because he thinks Bitcoin is fantastic, he is convinced that the digital currency will make the world a better place. There is an enthusiastic community around Bitcoin that discusses every day in Internet forums, that can hardly wait to meet like-minded people at the next Bitcoin get-together, and that with outrage any suggestion to ban or restrict Bitcoin as rejects malicious, dictatorial and anti-progressive ideas. Bitcoin triggers an extreme idealism. Despite – or perhaps because of – all the real or alleged evils.  

Why? What does Bitcoin bring to the world that outweighs all of that? What does the Bitcoin community see in cryptocurrency? Why does she think that she is a gift to humanity and that it would be a huge step backwards if Bitcoin did not succeed?  

It is difficult to find the one answer to this question. The Bitcoin scene is too colorful for that. You can find a wide variety of worldviews in it, from left to right, from conservative to radical. Bitcoin is an investment for some, a means of payment for others and a fascinating technology for others. There is not one ideological banner under which the movement rallies.Nevertheless, we can try to outline some central elements of the Bitcoin ideology in broad strokes.

Technology Is Not Innocent

Technology, you keep hearing, be neutral. It is not the machine that does something bad, but the one who uses it. Bitcoin is not bad, but someone who hacks computers and blackmailed others.  

However, this is not entirely true. Technology sociologist Andrew Feenberg calls this opinion “the seductive illusion of technology”. Innocent is, perhaps, the bare abstraction of technology, what is scientifically and technically feasible. A semiconductor, the cell of a plasma screen, a cable. As soon as technology becomes tangible, however, when it has congealed into a device and becomes part of everyday human life, it loses its innocence.  

Feenberg may have tried like no other to fathom society and technology are intertwined. For him technology is through and through a part of domination and resistance: “Technology can and will be configured in such a way that it reproduces the domination of the few over the many.”  

He calls the concretization of Technology the “design”: the devices and user interfaces – a laptop, a smartphone, an operating system. These designs carry possibilities and limitations, and these “reflect the relative power of the actors involved in the design”. In a technical society, the design of technology is perhaps the most important power factor.It reproduces relationships of domination and determines the actions of individuals “more effectively than political authorities ever could by determining reflexes, abilities and attitudes”. For Feenberg, the politics of technical societies can be described as “a battle over design codes.”  

A good example is cryptography. In itself – as a mathematical procedure for encrypting and signing messages – it is neutral. In terms of design, however, it is hegemonic. Everyone could (and should) encrypt their emails. But there are hardly any user-friendly interfaces, very few e-mail programs support encryption, and the operating systems also make no move to make cryptography accessible to the user. The result is that more than 99 percent of e-mails are still sent in clear text – even though the technical possibilities to encrypt them have long existed. In civil rights terms, e-mail is a huge step backwards compared to letters that are protected by postal secrecy.  

On the other hand, governments and the large Internet companies naturally use encryption to disguise messages. Signatures and hashes are used in almost every movement on the Internet to identify users and devices. Cryptography, in its normal, everyday design, protects rulers by encrypting them and violates the privacy of citizens by identifying them. 

Money is also a technology, and like almost any other technology, it is currently in the process of digitization. Here, too, there is a clear political tendency: money is being transformed from something that was previously owned – in the form of a note or coin – into a virtual thing on the bank’s servers. The technical reinvention of money robs people of what could be called monetary autonomy, but increases the control of the state and banks.  

Bitcoin is one of the rare opportunities for its fans to see technological progress in to direct the right direction. The technology sociologist Feenberg devotes his work primarily to the resistance to the doctrine of design – the people who adopt technology and exploit ambiguities in code to reinterpret it and use the technology for their own defiant, rebellious and revolutionary purposes. For Feenberg, the decentralized, anti-hierarchical Internet shaped by the hacker culture is an example. Cryptocurrencies like Bitcoin would be another, perhaps even better example of such an appropriation: They use the available means – cryptography – to intervene in a process that is already taking place – the digitization of money – and the design of the technology like that to reshape so that it does not support rule, but breaks it. Bitcoin not only preserves the monetary autonomy threatened by digitization – it increases it.

Sociologist Tom Redshaw analyzes Bitcoin in the context of Feenberg’s theory of technology. He notes that Bitcoin is indeed a “creative appropriation” of technology, a “successful demonstration of how a subgroup is introducing new and alternative values ​​into the design of technologies”. However, Redshaw is disappointed that Bitcoin does not strengthen democratic values, as he had hoped, but even undermines them in favor of libertarian economic models.  

With Bitcoin, the technical history of money seems to have reached a crossroads to be. One direction leads to the dependence of plastic money – and the other to the freedom of digital cash. Bitcoin is not just a technology. It is a decision about the future of freedom.  

The Option To Break A Commandment

In the world of the Bitcoin scene, monetary autonomy is likely to be a key concept . But what does that mean?  

Autonomy means to act freely and independently. A child is not autonomous because his parents decide for him, a convict not because the prison makes the decision for him, and an employee not during his working hours because his supervisor determines what he has to do. 

 { {1}} Monetary autonomy therefore means being able to decide for yourself what to do with your money. How to keep it, who to give it to, who to get it from. Cash gives this autonomy: if you have it, you can do what you want with it. “Cash is shaped by freedom,” praised Carl-Ludwig Thiele, member of the board of the Deutsche Bundesbank.Cash embodies “the right to informational self-determination and [the] respect for private life”. Cash is anonymous and nobody can prevent you from using it for whatever you want.  

The specter of cash abolition has been around for a number of years. Some economists and politicians are calling for bills and coins to be withdrawn from circulation or for their use to be drastically restricted. The US economist Kenneth Rogoff gives two reasons for the abolition of cash: “Firstly, it would probably make tax fraud and crime much less attractive if large, anonymous payments were made more difficult in the future. Even a relatively modest effect of this kind could potentially justify abolishing much of the cash. Second, and I’ve been saying this for quite a while, the gradual abolition of cash is undeniably the simplest and most elegant solution to enable the central banks to pursue an unrestricted negative interest rate policy, i.e. to break the ‘zero line’ of nominal interest rates downwards. “{{1} } 

Every declaration of war on cash is based on these two points: It is only used by criminals anyway, and it limits the scope of the policy of the central banks. The German economy, Peter Bofinger, blows this horn: “With today’s technical possibilities, coins and banknotes are actually an anachronism,” he explained to Der Spiegel. Eliminating cash would dry up the undeclared work and drug markets. Nobody needs the big euro bills for shopping, “light-shy figures do their business with them.”  

In Germany, the abolition of cash seems a long way off. Here, cash is still the priority. But even with us, payments with “plastic money”, with EC or credit cards, are on the rise. On the other hand, you are still abroad, for example in Scandinavia, parts of the USA or Asia, where cash has now become a marginal phenomenon in payment transactions. In Denmark and Sweden, for example, there is already open consideration of the abolition of cash, thereby weakening the principle that banknotes are the only really legal means of payment and must therefore be accepted everywhere.  

All over Europe there are always restrictions new laws the cash payments more and more. In the wake of the financial crisis and terrorism, many European states have imposed tight limits on cash transactions. In Italy a maximum of 2999 euros, in Spain 2500, in France 1000 and in Greece only 500 euros can be paid in cash. Anything beyond that must be paid for with a cashless means of payment, such as a bank transfer, check, direct debit, or credit card.

All of these cashless means of payment are not autonomous. If you take it seriously, the money that is moved through these channels doesn’t even belong to the supposed owners. It belongs to the bank. She has physical access to it. The owner only has a payment claim from the bank. Laws give him certain rights – but when the going gets tough, as in Cyprus or Greece, he is defenseless. He is not the autonomous owner of his money.  

This virtualization of money in central institutions deprives the citizen of a technological agency that he still had with cash to defend himself against the government. It is possible to break the law with cash. Citizens can pay the fitter (or lawyer) black because the tax burden has become unbearable, they can buy goods on the black market because the government forbids essential things, and they can withdraw money from the bank if the bank charges it with negative interest .  

The very existence of breaking the law as an option gives the citizen power. If the harm of complying with a law is greater than the risk of breaking the law, the citizen can choose to ignore a law. This possibility ensures that laws require a certain degree of insight from the citizen in order to apply. The abolition of cash changes this balance.It turns money into witnessing violations of the law, increases the likelihood of being caught breaking the law, and may lead to transactions being blocked, making the offense even impossible. If there is no monetary autonomy, many laws are obeyed only out of obedience.  

There is a great deal at stake. Because laws are not perfect. They are not the result of an ultimate moral truth, but of a process of political decision-making. At best, they are the product of a social dialogue, and a kind of consensus of the majority, what is allowed and forbidden in a certain time.  

Take, for example, alcohol and cannabis, the two most widespread light drugs in the world: In Germany only alcohol is allowed, in Morocco only cannabis is tolerated, and in the Netherlands both are allowed. The USA has even gone through every possible condition over the past 100 years: first both were allowed, then only alcohol, then only cannabis, and today both are legal again in more and more states.  

Laws are not a state. They are a process. They persist because citizens approve of them – or at least find them tolerable – and are habitually broken long before the government changes them. They are not prescribed from above, but are negotiated in a silent dialogue between the government, the judiciary and the people.If you deny citizens the opportunity to break laws – for example by banning cash, since it is only used by drug dealers anyway – you make the laws, in all their imperfections, a fact. 

 {{1} } In order to have a voice in this legislative dialogue, citizens need monetary autonomy. You must be able to choose how to break laws with money. Bitcoin, it is hoped, can maintain the autonomy of money, which is threatened by the fact that digitization devours cash.  

But not only that. Bitcoin not only receives the freedom that cash grants – it creates something new: The new currency combines the advantages of cash and virtual money. Cash takes up space and can get moldy, burned or stolen. It is difficult and risky to store around one million euros in cash or to transport it across borders. Bitcoin eliminates all of these shortcomings. You can save millions of euros on a piece of paper or memory stick, protect it from thieves with passwords and secure it with a backup.  

Bitcoins can be sent around the world in minutes, from where and to whoever you want. The cryptocurrency globalizes the autonomy of cash – and also expands it to include value. Governments can devalue cash by printing new bills. There is no government with Bitcoin. Nobody can manipulate the value of money by arbitrarily creating new units.

The cryptocurrency takes monetary autonomy to a new level. It frees people, no matter where, no matter who, the super-rich of the first and the poorest of the third world, from the constraints and dependencies of monetary middlemen and state power. Bitcoin is autonomous money for the whole world. Whatever the price, Bitcoin fans say: it’s worth it. Just as the printing press and the gasoline engine were worth all the damage they caused. In the long term it can only be good.  

Against The Leviathan

But there is a second, perhaps darker, and in any case more radical worldview in the Bitcoin scene . It is not just about the defense of freedom and autonomy – but about the attack on the state itself, the almighty Leviathan, before which individuals have to bow.  

Let us think of the Austrian School, to Menger, Hayek and Mises. Ross Ulbricht, the Admin of Silk Road, was enthusiastic about her teachings about business, state and freedom in his youth, and in many of the most ardent Bitcoin fans, such as Roger Ver or Eric Vorhees, we find staunch supporters of the Austrians. {{ 1}} 

For liberals in the sense of this school, the state is indeed an evil, but a necessary one. Because a good market economy needs rules, and rules need an institution to enforce them. They don’t like it, but liberals give the state a right to exist.It should not be as big, bloated and expensive as it is now, and should withdraw from social welfare, health care, education and much more in order to concentrate on its core functions as a night watchman state: on protecting borders and internal order .  

Some of the schools that grew out of the liberal worldview take the concept even further: anarchists, libertarians or anarcho-capitalists. For them, the state is so much the root of all evil that there can be no compromise.  

 “Anarchism regards the state as the darkest of all prejudices that have blinded people from the beginning of history. He is the central object of his revolt, his hatred and his attempts to overthrow, ”writes Daniel Guérin in his introduction to anarchism. Pierre-Joseph Proudhon, one of the founders of solidarity-based anarchism, describes how the state incapacitates people: “To be governed, that is, to be under police surveillance, to inspect, to spy, to direct, to shower with laws, to regulate, to penned, to instruct, to preach to be controlled, appraised, appraised, censored, commanded by people who have neither the right nor the knowledge nor the strength to do so.”The governed would be” exploited, administered, cheated, exploited, monopolized, betrayed, extorted, deceived, robbed under the pretext of public utility and in the name of the general interest, “in order to” finally, with the slightest resistance, suppressed at the first word of the complaint , punished, put down, insulted, persecuted, mistreated, beaten to the ground, disarmed, gagged, imprisoned, fusilized, shot at, convicted, condemned, deported, sacrificed, sold, betrayed and, on top of that, mocked, teased, insulted and dishonored. “{ {1}} 

The state is the collectivization of agency. He takes from the individual and gives to the government. In the eyes of libertarians and anarchists, the damage that their very existence does to human dignity, freedom and self-expression is many times greater than any benefit they can bring. They are also convinced that the tasks occupied by the state can also be carried out without it. Even better.

Anarchists and libertarians share the desire to dissolve the state. When it comes to the question of what happens afterwards, however, their ideas differ. Solidarity anarchists in the spirit of Proudhon think of more grassroots democratic or spontaneously organized municipalities, while the libertarians and anarcho-capitalists want to hand over all matters of life to the free market. For example, market-economy agencies and insurance companies are supposed to exercise physical violence over which the state currently has a monopoly.  

For Ross Ulbricht, Silk Road, as a legal vacuum, was a kind of anarcho-libertarian commune. “The Silk Road is built on and operates through libertarian principles. It is not a utopia. It is regulated by the forces of the market instead of a central power. ”He dreamed that their model would also reach legal trade. “The same principles that made Silk Road bloom work wherever people come together. The only difference is that the state is unable to put on its murderous paw. ” 

The Silk Road administrator knew his Austrians. He had read Mises, Hayek and their American radicalized student Murray Rothbard. It only clicked when he got to know Samuel Edward Konkin’s writings. He calls Konkin “the last missing piece of the puzzle”: “For many years I was frustrated and crushed by the seemingly insurmountable barrier between the world of today and the world I wanted.“Only Konkin showed him how to tear down the barrier.  

In one of Konkin’s most important writings, the New Libertarian Manifesto, we meet the verbose accusations against the state that are common among libertarians and anarchists: “Such an institution exists that centralizes immorality, gives instructions on theft and murder, and coordinates repression on a scale that is inconceivable through random crime. She is the gang of all gangs, the conspiracy of all conspiracies. It has killed more people in the past few years than all previous deaths added up; in a few years she has stolen more than all the wealth that was produced in the period before added up; it has – in order to survive – misled more minds than all the irrationality before added up; our enemy, the state. ” 

Of course Konkin neither wanted nor could such an institution tolerate. Therefore he developed the doctrine of the counter economy: organized self-defense against organized coercion. The counter economy is an instrument of revolution against government and the response of those who are not satisfied with getting out of the system or sabotaging it through silent resistance. For him, the counter economy was the instrument with which “people can protect their wealth and property from the state.”  

Conventional economics explains how the state can control the economy. Konkin’s counter-economics shows how the economy eludes the state.It is a hymn to the black market: “Millions keep their money in the form of gold or in foreign accounts in order to escape the hidden taxation caused by inflation. Millions of ‘illegal aliens’ are employed under the Immigration and Naturalization Service. Millions more trade or use marijuana, cocaine, or other prohibited drugs, including latrile, tryptophan, anti-AIDS drugs, and banned medicinal substances. ” 

All of these black transactions, ignored by the law and Tax evasion became a gain in freedom for Konkin. His strategy was to “get more and more people into the counter economy and reduce the loot available to the state.”  

This was where Ross Ulbricht realized what it was about. “The great thing about counter economy is that it is a victory by a thousand battles. Every single transaction that happens outside the web of the state is a victory for the individuals who take part in it, “enthuses the Silk Road administrator,” we win thousands of victories every week, and every one of them strengthens the agora and weakens the state. ”The drug dealers who sold heroin on Silk Road became heroes for Ross Ulbricht.  

But Konkin’s doctrine of the counter economy