what nobody seems to have noticed is that Dogecoin and Bitcoin exist on a continuum with WoW "gold" and Amazon gift cards— Giles Goat Boy (@gilesgoatboy) December 24, 2013
it's not so much that BTC is more libertarian than gold or dollars. it's that it's much, much less corporate than Visa and gift cards— Giles Goat Boy (@gilesgoatboy) December 24, 2013
governments lost control of the financial systems a good long while ago anyway.— Giles Goat Boy (@gilesgoatboy) December 24, 2013
However, despite Bitcoin's relative antiquity, it's only seen a lot of discussion in Rubyist "thought leader" circles quite recently, thanks mainly to its recent surges and plummets in price (which have been its largest so far, but by no means atypical). Alex Payne contributed some well-intentioned but sadly irrelevant and intellectually dishonest criticism, which aimed for political significance, and certainly raised valid concerns, but in my opinion amounted to little more than a former banking CTO announcing a personal change in the direction of his own life. People I respect had praise for this blog post, but personally, it just reminded me of the people in 1994 who told me the Web was just a fad and AOL was the future of the Internet.
Anyway, Steve Klabnik also wrote some wonderful rambling nonsense about how great Dogecoin is. But the best remark, in my opinion, came in the form of a joking tweet from Phil Hagelberg. Take a second and THINK ABOUT WHAT THIS ACTUALLY MEANS:
Is there a site yet where you can make your own cryptocurrency by entering a name, a cap and an optional logo?— Phil Hagelberg (@technomancy) December 22, 2013
Pretty sure the answer's no, but you could build that site today.
Update: that site now exists.
Here's why this matters.
Historically, the American people have had at least nominal control over financial policy, but that era's basically over. On the one hand, the Federal Reserve doesn't answer to the people at all, and on the other hand, government doesn't really control money any more anyway.
Control over money was a government privilege for a very long time, but Visa, MasterCard, and a few other corporations have basically built a private, corporate, money-like system on top of money itself, which these corporations own, control, and sometimes illegally misuse to further their own political agendas. Visa et al have used the classic Microsoft "embrace and extinguish" strategy to mostly replace cash with their own private infrastructure. (The "mostly" part is what that classic William Gibson quote really means.) Simultaneously, investment banks have used international currency trading to turn money from a bastion of governmental authority into a commodity like any other, thereby shifting power from governments to markets. On top of all that, it isn't really about the money supply any more, it's about the credit "supply," and the people who control that can basically use their control to extort governments.
The major dilemma in American politics is that we have excellent protections (at least on paper) against abuses of governmental power, and far weaker protections against abuses of corporate power. There's a danger there for the 99%, because in America, monetary policy has become something so similar to privatized that you need a constitutional lawyer, an economics professor, and an electron microscope to spot the difference.
Venture capitalists are undoubtedly going to build new corporations around Bitcoin and cryptocurrencies in general, but most people over-estimate the importance of venture capital in this equation. For one thing, Coinbase's use of Mongo DB makes me think they're trying to crowdsource eventual consistency by having their customers email them a screenshot of every transaction. More importantly, cryptocurrencies are fundamentally peer-to-peer and open source. They're not creating new proprietary tech, like old-school venture capital projects in the 1980s. Like many things venture capital does today, they're really just trying to capture and control the wealth generated by programmers sharing code for free, or at most add value on top.
In political terms, that makes Bitcoin far less a tool of corporate control than Visa, MasterCard, Wall Street, and the Federal Reserve combined.
If you can't see how open source, peer-to-peer currency can be revolutionary, you need to read Marshall McLuhan, Bruce Sterling, and William Gibson. Catch up with the 1970s and 1980s, in other words. For bonus points, read Here Comes Everybody, by Clay Shirky, and catch up with 2009 as well. (And it's kind of a joke if you're talking about Dogecoin but you've never read Down And Out In The Magic Kingdom.)
TLDR: Peer-to-peer and open source technologies give power to networks of people -- whether large or small, whether public or private -- without corporate or governmental control. That's what puts the punk in cyberpunk. To quote Bruce Sterling:
Bruce Sterling: Cyberpunks have been cyber for decades now. Our society is pretty much cyber-everything, nowadays. Some aspects of it are even post-cyber. That's okay, you get used to that process. "Normality" comes and goes for a sci-fi writer, but "eerie" you always have with you...
What film best represents your vision of a cyberpunk or high-tech dystopian future?
Bruce Sterling: As for the "cyberpunk" part, forget about "the movies." Abstract motion-graphics coded in Processing and posted on Vimeo, that's "cyberpunk." You don't wanna make movies that are about guys with computers. You want to use digital composition to seize control of the means of producing cinema. And then do it all yourself! That's "punk." Hollywood product is commerce, it's about fanboy culture.
While it's certainly very likely that monied elites will find ways to survive and even profit from this radical transformation, if it indeed goes forward, Bitcoin's designed to build an economy where we don't need governments and we don't need corporations. If you hope to do anything more punk rock than that, ever in your life, good fucking luck. Of course, the question of whether Bitcoin succeeds in practice is different from the question of what potential Bitcoin has in theory. However, at least in theory, Bitcoin attacks the two biggest necessary evils of economics and takes the "necessary" part out of the equation in either case.
And since it's open source, any corporate or governmental system set up to control it is inherently optional. Any group can fork an existing currency and create their own economy. Any ethnic group, any subculture, any open source community, yes, but note that I didn't even say "any group of people." Cryptocurrencies offer similar options to, for instance, any group of pieces of software. If you want to leverage the chaotic nature of market economies to manage some computational resource, you can. The bad news: chaotic systems are chaotic. But the good news is that the foundation for your software already exists, and will cost you nothing.
I'm not even saying all of this is good. I'm saying it's all a big deal. The question with Bitcoin is not "is this a VC fantasy or a way to make money?" The question with Bitcoin is "is this merely a way to make money, or will this become a bigger deal than the invention of the Web?"
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