Changing the world without taking power? Bitcoin and the challenges of consensus

Bitcoin could provide a more democratic alternative for managing the economy, relying on objective mathematical tools, rather than economists with a free market bias. But there are obstacles along the way.

Nozomi Hayase
15 May 2017

Bitcoin. Tiger Pixel/Flickr. Some rights reserved.In its 8th year of existence, Bitcoin has made lots of news headlines. From wild volatility in the markets, hacks in exchanges, to the identity of the supposed self-proclaimed mysterious anonymous creator, events surrounding this disruptive technology have had no shortage of drama. Now, the latest is a civil war happening in the Bitcoin community. The solutions for this technology’s scaling problem have created a challenge of consensus. With disagreements on technical changes turning into a contentious debate on social media, the ecosystem growing around this technology has started to resemble the craziness of party politics.

We have seen repeated fiascos in national politics. From the 2008 financial meltdown and bank bailouts to cycles of austerity, unprecedented levels of corruption have spawned a global crisis of legitimacy of institutions and governments. This only seems to have gotten worse. The 2016 US presidential election – magnified by WikiLeaks DNC leaks – has presented the world with an escalation of the 'lesser of two evils' political model, and electoral politics as a charade sponsored by oligarchs.

As the system of representation is increasingly failing, Bitcoin presented an alternative. The core of this innovation is its apolitical nature. This is what makes Bitcoin censorship resistant, unseizable and permissionless. As politics in the community seems to be creating setbacks or posing what some perceive as an existential crisis, questions once again arise: what is Bitcoin? How is this apolitical money different from existing national currency?

Politics as systems of power

First, let’s explore politics. What are the characteristics of governance it has designed? The Oxford Dictionary defines politics as “activities associated with the governance of a country or area, especially the debate between parties having power.” Politics is inherently associated with power and is a means to organise society through leaders gaining control over the majority.

Western liberal democracy is politically engineered governance. Its fundamental feature is centralisation. Rules are made and enforced from the top and any changes in the system require permission from those who are in positions of authority. Historian Howard Zinn (1970) noted how:

“In modern times, when social control rests on ‘the consent of the governed’, force is kept in abeyance for emergencies, and everyday control is exercised by a set of rules, a fabric of values passed on from one generation to another by the priests and teachers of the society.”

This command-control style of governance works in hierarchies and is antithetical to democratic values. The integrity of the system depends on the success of rulers to foster obedience of those in the network and prevent people from dissenting. For this, managing perception and public opinion through mass media becomes necessary and the system operates under the appearance of democracy, making force of control covert and invisible.

In Democracy INC: The Press and Law in the Corporate Rationalization of the Public Sphere, professor of journalism David S. Allen (2005) described the role of professionals in facilitating this managed democracy. He noted how the creation of expert knowledge is essential in this machination. Science has become a methodology to back professional legitimacy, as “individuals began to regard professional judgments, often supported by scientific data as unquestionable”.

The creed of objectivity

Professionals with expert knowledge perform the role of trusted third parties who are supposed to represent the interests of citizens and make decisions on their behalf. Here, the knowledge produced in social science, such as economics, political science and psychology is often used to maintain the status quo of power structures.

From Alan Greenspan to Ben Bernanke and now Janet Yellen, economists who are appointed by the US President as chair of the Federal Reserve get to decide monetary policy for the country and exercise influence through central banks around the world. What validates their expert knowledge is an epistemological foundation called the creed of objectivity.

Social science has incorporated empirical and positivist methodology of natural science and claimed the ability to form knowledge in a similar way as physical science. With this, researchers assert neutrality as if he or she transcends race, class or any personal bias. Yet, they are embedded within cultural values and their purported value-free objectivity is not actually possible. A person's subjective agendas and personal views do not magically disappear by simply claiming it to be so.

A person's subjective agendas and personal views do not magically disappear by simply claiming it to be so.

Without transparency that ensures disclosure of researchers’ bias, this creed of objectivity becomes a cloak that hides their motivations. This stance of objectivity closes off any feedback and the assertions that are not tested are promoted as universally applicable truth.

Money in this representative democracy becomes political money, legitimised by state authority and tied to monetary policies of investment banks and corporations that run government behind the scenes. It enables a small number of powerful and rich to enact the ideology of neoliberalism and hijack a whole economy. Under the banner of the ‘free market’, they justify their plunder as a crusade for progress.

Replacing politics with maths

Now, a breakthrough in computer science has found a way to crack this closed logic of control. Bitcoin opens what sociologist John Holloway described as a path of “changing the world without taking power”. The whitepaper published in 2008 under the pseudonym Satoshi Nakamoto put forward a vision of a “peer-to-peer version of electronic cash”, based on cryptographic proof, rather than relying on a trusted third party. The underpinning of this innovation was a science of asymmetrical security that provides a strong armoury against violence, exploitation and extreme selfishness through the mechanism of consensus.

Richard Feynman, a theoretical physicist, once said that scientific integrity is learning to not fool ourselves. He noted, “The first principle is that you must not fool yourself—and you are the easiest person to fool”. In natural science, researchers are given honest feedback from the real world and nature through observation, repeated testing and experiments. On the other hand, social scientists explore dimensions more divorced from physical reality, and in their claim of neutrality, they can become blind to their own bias. This would influence the outcome of their studies and they more easily distort facts with personal opinions and emotions.

The first principle is that you must not fool yourself—and you are the easiest person to fool.

This creed of objectivity in social science has shown itself to be vulnerable to tendencies towards deception, while math is a property that is impervious to manipulation. Math cannot be fooled, as it does not respond to lies and threats. Computer science relies on solid data, rigorous testing and peer-review. This gives each person an opportunity to engage in honest work to overcome self-deception and build strong security, even as strong as the laws in the physical world.

Cypherpunks: scientists with a moral code

In the existing model of governance, the inherent weakness of the creed of objectivity made the system vulnerable to tyranny of the few. Economic incentives set up by a professional class made the right to free speech exclusive for the beneficiaries of this managed democracy, suppressing any views that challenge this authority by calling them subjective, relegating them to mere opinion. This doctrine of false objectivity that has been predominant in academia has conditioned researchers to remain impartial. This turned the populace into passive observers, preventing them from fully connecting with their passion and values.

In the foundation of Bitcoin development, there lies a particular philosophy that revolts against this restriction of free speech imposed by central authority. In the paper 'The Moral Character of Cryptographic Work', published in 2015, eminent computer scientist Phillip Rogaway brought forward the moral obligation of cryptographers and their importance, especially in the post-Snowden era. In this, he described a group that emerged in the late 1980s who saw the potential of cryptography in shifting power relations between the individual and the state. These are the cypherpunks who held a belief that “cryptography can be a key tool for protecting individual autonomy threatened by power”.

Cryptography can be a key tool for protecting individual autonomy threatened by power.

In an interview with Trace Mayer, applied cryptographer and inventor of Hashcash, Adam Back who was cited in Satoshi’s whitepaper, talked about the “positive social implications arising from cryptography”. He described the ethos of cypherpunks as writing code to bring the rights we enjoy offline into the online world. The idea is that lobbying politicians and promoting issues through the press would be a slow uphill battle. So, instead of engaging in legal and political systems, Back noted that they could simply “deploy technology and help people do what they consider to be their legal right” and society would later adjust itself to reflect these values.

Unlike politicians who make promises that are rarely delivered, the cypherpunks write codes. With their adamant claim of subjective domains, they apply real objective knowledge that comes from maths to bring change.

Imagination from computer science

As the forced network effect of petrodollar hegemony begins to loosen, the empire fuels aggression, with more wars and sanctions. While this system of representation weakens, the logic of control from the old world began infiltrating the Bitcoin ecosystem. Regulators try to reach cryptocurrency through exchanges, and by enforcing KYC (Know Your Customer) create a fertile soil for government surveillance and privacy erosion. Centralisation creeps in through industrial mining and patents on hardware, creating a trend toward state and corporate backed monopolies. All the while, established media keep writing obituaries on Bitcoin, wishing to declare the death of this new money they can’t understand.

Politics that spread through the crypto-community have been hijacking discussions on technical development. The divide created in this community appears to be moving the technology away from its original vision. With PR and name-calling, a vocal minority engages in social engineering, distracting developers who are engineering security.

Computer science gives you far more leverage to change the world than any other study in our age.

As legal scholar and inventor of bit-gold Nick Szabo once noted, "computer science gives you far more leverage to change the world than any other study in our age". Social issues and questions of democracy have been a philosophical quandary that are generally tackled politically. They were not considered to be the purview of science. Now, imagination from computer science has come forward to help us work on solving these problems. It opened a door for a new future, where our engagement in honest scientific endeavours can show the world that equality, fraternity and freedom are not just ideals, but unshakable universal truths.

Now, the challenge of consensus that the Bitcoin community is facing is a test for all of us. Bitcoin has responded to the crisis of legitimacy and security that are inherent in political systems. Where politicians and leaders have failed, Bitcoin succeeds. As the price goes up, crypto-enthusiasts proclaim the rise and rise of Bitcoin.

Can our imagination rise with the power of decentralisation that this technology brings and let go of this urge to play politics? By moving from a system of power to a consensus of equal peers, together we can work toward realising promises enshrined in this code of a-political money. Our surrender to scientific processes can accelerate the development of this protocol and give this innovation a chance for humanity to save itself from the mess we all have created.

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