Blockchain versus vulture capitalism

The Bitcoin revolution offers a glimpse at a better humanity.

Nozomi Hayase
6 July 2015

Flickr/PerfectHue. Some rights reserved.

The notion of survival of the fittest, coined by English philosopher Herbert Spencer to describe his economic theory promoted a view of man as not much more than claws and teeth. This became a prevailing ideology behind the rise of social Darwinism and was used to justify European colonialism and modern predatory capitalism. 

In current civilization, the tendency toward personal gain and competitive drive continues. The evolution of the species in modern times has turned into a game of survival of the crudest and most rapacious corporations and bankers. Russian novelist Ayn Rand, who became an iconic guru for libertarians, put forward the virtue of self-interest as a pure moral force. Her philosophy of objectivism emphasizes reason as the ultimate arbiter of truth and she condemned feelings of sympathy as inferior. This was used to rationalize poverty and weakness as an outcome of natural selection and support the free market idea of radical deregulation and tax cuts for the rich.

What has become apparent now is that the greed of a small minority in a 'race to the top' has subverted a broader evolutionary force, holding people hostage in a brutal animal-like kingdom of kleptocracy. An elite owner class began setting rules for the rest of the population through their undue influence on governments. Government giveaways in the form of corporate welfare and monopolies stifled true entrepreneurship and innovation. Forces of privatization have trespassed on and are now swallowing the commons. With scarce access to resources and jobs, people are pitted against one another, engaging in a rigged game that just keeps enriching the richest. This has now escalated into an arms race to the bottom, creating resource wars, economic apartheid and environmental catastrophe.

Darwin’s Lost Theory of Love

With the crisis of legitimacy and unprecedented government corruption in recent years, people began looking for solutions outside of electoral politics. The rise of the Occupy Movement was an awakening to the real source of power within to chart a new future. This call for an alternative to the survival of the fittest emerged long ago after Darwin put forward his theory in his first work, The Origin of Species.

Russian philosopher Peter Kropotkin reminded us that the riddle of social problems are within us, showing how the narrative of fierce competition for life was only half the story. In his book Mutual Aid: A Factor of Evolution, he responded to the predominant Darwinian interpretation of natural hierarchy and argued for the feeling of solidarity, empathy and cooperation as the ground for human evolution.

This view was held also by Darwin himself. Psychologist and system scientist David Loey in Darwin's Lost Theory of Love debunked the narrow reductionist interpretation of Neo-Darwinians that emphasized the notion of the selfish genes. He showed how most had buried a major contribution Darwin made when he moved beyond pre-human evolution to examine man's moral sensibilities. Loey pointed to how Darwin, in his second work The Descent of Man, had recognized that nurturing, expressed as sympathy for the weak was a primary evolutionary force that drives humans to develop higher agency with the principle of mutuality.

Blockchain Intervention

Now, a new force of evolution came from an unexpected place. An imagination from computer science brought a potential to intervene in the course of humanity, which has been heading down a destructive path. The invention of the blockchain technology offers a way to bridge Darwin’s first and later works, moving beyond the logic of competition and entering into a state of co-existence to realize our innate nature of altruism.

Six years since its inception, more people are beginning to see the powerful political implications that this technology brings. The blockchain is a public asset ledger and Bitcoin as a store of value and unit of account derived from it belongs to everyone who recognizes its utility and freely chooses to use it.

On the surface, the trend of speculators trading Bitcoin and manipulation of exchange rates can resemble gambling, and some see Bitcoin as recapitulating the existing Wall Street casino-style derivative economy. This investment friendly image is strengthened when economists chime in to depict Bitcoin's fixed monetary supply as a currency mimicking assets like gold and criticize this as deflationary and would incentivize hoarding, and perhaps increase wealth inequality.

Contrary to these perceptions, Bitcoin was never meant as a get-rich-quick scheme. While it possesses gold-like characteristics, it is also radically different, as it is highly portable and divisible (Bitcoin can be divided into 8 decimal points and more if consensus is reached). This is a new monetary design that has never existed before. Careful examination reveals how it is an architecture that embodies innate human nature and is designed to uphold our internal governing structures.

Digital Scarcity

Bitcoin is like one big organism that regulates itself through algorithm. With no company, CEO or individuals in control, it maintains a ledger transparent to all. Its ecosystem evolves to manifest a vision encoded in its DNA, through stimulus and active interaction with its environment.

The core of this technology is algorithmic consensus that enables digital scarcity; a way to make an object in the digital world scarce without central control. This solves the problem of the double-spend. Cryptographer Adam Back, whose invention of Hashcash contributed to the creation of Bitcoin's digital scarcity, noted how Bitcoin “constructs a computational irrevocability from proof-of-work and consensus”. This makes permissionless transaction and innovation possible, as well as removing monopolistic control of the production and transfer of money. But more fundamentally, this scarcity offers a key to open society to move beyond the current oligarchical rule of the neo-Darwinian dog-eat-dog world that has now turned into the lions eating the lambs.

The market logic that governs the existing extractive system is that of central control. As a hallmark of the industrial era, capitalism bases its foundation on the idea of land ownership. This places production and distribution into private hands. Scarcity was created through monopolistic control of resources and energy (such as the oil spigot), which has mostly been done in secrecy.

Unlike the managed scarcity of centrally controlled markets, Bitcoin's digital scarcity is created through voluntary agreement of its participants. Its open source protocol grants users power to choose what kind of network they wish to create or be a part of, as codes can be modified by anyone. Combined with game theory that enforces fairness, this scarcity creates a new form of capital, one that is open source and distributed. This brings a radical departure from the current vulture capitalism that promotes cheating and wealth without work by means of usury, rent-seeking and quantitative easing (taxation through inflation).

While central banks use fiat currency as a force of coercion, Bitcoin currency is a token of value that provides an incentive to generate productivity and efficiency of the workers (miners). This pays for the labor required to build a whole new global financial system. In a sense, each Bitcoin mining pool is like a worker-owned cooperative that requires members to both work together and also compete within the network to perform the issuing of monetary units and clearing of transactions. Solidarity generated through collective hashing power maintains the ethos of decentralized consensus.

Distributed Accountability

Bitcoin's self-organizing is not easily understood from outside looking in. It is like a caterpillar in the cocoon before turning into a butterfly. Market manipulation and outright theft within exchanges like Mt. Gox appear to confirm the view of man as selfishly driven. Yet, this is occurring in centralized offshoots and simply a reflection of the greed rampant in the existing system.

If we dig a little deeper into this ecosystem, what is happening within the mining process also appears to affirm the theory of natural selection, where those with powerful computer chips and hashing power can increase the chance of winning the game. Indeed, mining equipment is now highly specialized and is becoming more like a kind of survival of the fittest (where ordinary computers can no longer participate in mining). This brings concern about the potential centralization of mining. Yet, just as Darwin's first work does not complete his full picture of evolution, the mining was also designed to be subservient to the imagination that infused this innovation.

The fierce mining competition fosters efficiency, helping make the relative capacity of the Bitcoin ecosystem significantly less energy intensive than the existing financial system. Tech entrepreneur and author Andreas Antonopoulos explains how it is the most eco-friendly and cost efficiency currency when fully utilized at a global scale. This also helps create a solid foundation upon which a social contract of a truly democratic society can be built.

The creator of this technology, Satoshi Nakamoto found a way to secure the system from the risks of concentrated greed and destructive seeds within our 'selfish genes'. This was done through implementing a particular consensus algorithm that enforces people to show the proof of their work. Rewards here function as a mechanism to keep everyone honest and the equilibrium of supply and demand distributes accountability as a form of self-regulation taken up by those who participate in the mining.

All this has become an engine to build a system that is impervious to internal or external attacks. The mining rings that have now achieved global level security perform a kind of safeguard of real democracy, through which spontaneous forces of We the People can be unleashed. With its feature of infinite divisibility, value created through a peer-to-peer exchange of autonomy and reciprocity can become an abundant flow that nurtures all people, especially those who are made weak and vulnerable by current Western exploitation.

This even makes it possible for the other six billion, the unbanked and under-banked, especially in the Global South, to participate in the world economy on their own terms. This is already starting to happen as investment and interest in transforming the massive remittance market is increasing, while charity and tipping is the fastest growing usage of Bitcoin in the West.

The Ascent of Man

Many of us wish to evolve; to act more freely and extend kindness and compassion to others, but our actions are restricted and controlled by oppressive governments, religious fundamentalism and de-facto corporate dictatorship. As commercial-led globalization expands, the entire globe is shackled to the tyrannical logic of extreme capitalism and cowboy banksters' autocratic control over the flow of money. People with good hearts are forced to adapt to the harsh environment of austerity and rule by the rich. They have to make hard decisions; either to be kind to others or suppress that innate nature of altruism just to survive.

The blockchain removes these obstacles, allowing us to align ourselves with internal forces of evolution. The built-in incentive structure of this game-changing innovation offers humanity a path to divest from the military-industrial complex, war economies, sweat shops and debt slavery as well as Stasi-like surveillance. Instead of supporting oligarchs that print money at will to buy missiles and tanks, people can independently invest in mining gear and channel the selfish and aggressive parts of humanity to serve the larger whole.

Artificial scarcity in centrally planned economies fuels destructive competition among people, dividing all through fear into separated nations, religions and ideologies, and justifies wars and hatred. Now the competitive drive that has been cut off and stagnated can be brought back to its origin of creative power and transformed into one that encourages each to strive for their best in service to all.

With decentralized cryptocurrencies, we can move away from the deterministic future imposed by central banks and divisive political ideologues and build a society that represents who we really are. Those who are ready and want it will find a way to chart a new path. Those in power can choose not to evolve, but they can no longer take the rest of us down with them.

Humans it seems are being degraded into killer apes. As the ideals of distributed consensus enshrined in mathematics are fully developed, they become the killer apps that can help humanity redeem itself. In this new world entered through the blockchain, we can now move beyond struggles for existence and ascend as a species capable of love.


The Economist requires you to pay a pound a week to use its website. We’ll never charge for our content, but that doesn’t mean it’s free to produce. If you can chip in a pound a week, please do.

Who is bankrolling Britain's democracy? Which groups shape the stories we see in the press; which voices are silenced, and why? Sign up here to find out.


We encourage anyone to comment, please consult the oD commenting guidelines if you have any questions.
Audio available Bookmark Check Language Close Comments Download Facebook Link Email Newsletter Newsletter Play Print Share Twitter Youtube Search Instagram WhatsApp yourData