Among activists one often finds an aversion to even thinking about
money. Associating it with the opponent — who has lots of it —
they try to do without money themselves. Often, for as long as they
can, they try to organize and resist without it, until burning out,
quitting and getting into a different line of work just to keep up on
rent. But, as the 19th-century U.S. populist movement recognized,
money is also a battleground. Today, as a new wave of sophisticated
digital currencies are beginning to arise, this is perhaps more true
than ever before.
Bitcoin (the open-source software and peer-to-peer network) and
bitcoin (the currency) first appeared in early 2009 — just after
the housing bubble burst. It was heavily promoted by a tech-savvy,
anti-establishment, libertarian community concerned with the power of
big banks and government regulation. Critics have dismissed Bitcoin
as being “
by
the privileged, for the privileged,” while defenders have
claimed with an equal lack of subtlety that it is somehow
“
post-privilege”
altogether. Regardless of the label, however, Bitcoin and other
cryptocurrency platforms like it aren’t going away, and they are
poised to become increasingly disruptive.
To understand why, I turned to Devin Balkind, founder and director
of
Sarapis, which promotes
the use of free/libre/open-source software among non-profits and
popular movements. He has recently written (and is continuing to
write) a public working paper on cryptocurrency, “
Finance
Without Force.” Last year,
we
spoke about the role of open-source tools
in the Occupy Sandy relief effort, in which he played a leading
role. Before that, he had the distinction of being the first person
to tell me about cryptocurrency in the first place, insisting that
this was something I should be paying attention to. It has taken a
while, but I am finally coming back to him for more.
What do social justice activists need to know about
crypocurrency?
Cryptocurrency is open-source money. It lowers the cost of
producing a means of exchange — a money system — down to almost
zero. That means it’s easier than ever to organize alternative
monetary systems. Some activists know about time-banking and mutual
credit systems. Cryptocurrency makes it possible for people to turn
the hours or credits from systems like that into money that can
easily be sent around the world or spent at a local store. It
completely changes what’s possible from the perspective of
solidarity economics.
Where does the “crypto” come in? What role does
cryptography play, and why is it so important?
The primary challenge with creating cash is that you have to
produce a medium of exchange that can’t be spent more than once. If
you could simply photocopy a dollar bill to make more cash, the U.S.
monetary system wouldn’t work. The government uses security
features such as special paper, ink, designs and holograms to prevent
people from “double spending” cash. A unit of cryptocurrency, on
the other hand, is just a string of characters — letters, numbers,
symbols. This actually represents a “private key,” and when you
share it with someone, you give them the ability to upload it to the
network for authentication. Through a process of cryptography, every
transaction is checked against a public ledger on a peer-to-peer
network. If it’s illegitimate the transaction doesn’t execute.
What will it take to make cryptocurrency work in ways that
are more democratic and just than the economy we already have?
The existence of strong cryptocurrencies is already making the
economy more democratic simply by giving people a choice when it
comes to the type of money they want to use. Many people take for
granted that there is only one type of money used in the United
States, but this wasn’t always the case. Scrip, bank notes,
precious metals, whiskey and livestock have all been popular
currencies in the United States over the past 200 years. While these
might not seem like good currencies from a modern perspective, they
all made it possible for people without access to official currency
to trade and make deals with each other. From my perspective, that’s
precisely what we need today: more ways to exchange with and reward
people. Cryptocurrency makes that possible today, just as barter or
using silver made it possible 100 years ago. Cryptocurrency can be
money by the people and for the people.
A more open market doesn’t necessarily mean
democracy. It
has been observed, for instance, that many of those benefitting
most from cryptocurrencies are those who already have high-level
technical knowledge and lots of conventional capital to invest. Won’t
this just deepen the inequality we already have, while perhaps also
weakening the conventional social safety net? How can those most left
behind in the current system use cryptocurrencies to build power?
Yes, it’s true that most cryptocurrencies are being deployed by
privileged technologists, but so were websites in the 1990s, and I
think we can all agree that the Internet has been a positive
development for humanity. Over time these technologies democratize.
Cryptocurrencies, for instance, could fuel an underground economy in
which vendors can accept substantially lower prices for their goods
and services because they don’t report their transactions as
commercial activity and thus deny people consumers protections people
often expect from conventional transactions. For example, if you buy
a cookie from me with U.S. dollars and it gets you sick, you can sue
me, but if you buy it with bitcoin, I can deny the transaction ever
took place and make it very difficult for you to establish who is
liable and for what.
Does that type of scenario create more or less inequality? On one
hand prices are being reduced, enabling people with less to get more,
but on the other hand it creates a lot of potential for abuse because
of a lack of consumer protections. Indeed, it’s not hard to image a
dystopian future in which two separate economies co-exist: one for
the rich who use official currencies, and have consumer protections,
and one for everyone else who use alternative methods of exchange and
have fewer protections. In general, I think more choices are better
and that unregulated commerce, grassroots businesses and alternative
exchange practices are a great way for people left behind in the
current system to build their personal and communal power.
I hear a lot of talk about using cryptocurrency to bring
access to financing to under-banked communities. Is it hard to
get a cryptocurrency adopted? To what extent is this a community
organizing challenge?
It’s definitely hard to get a cryptocurrency adopted. Bitcoin
didn’t become popular just magically. People deliberately organized
an online community with the intention of making it popular; there
were forums, listservs, in-person meetups and apps built for the sole
purpose of spreading Bitcoin. One such app was the Bitcoin “faucet,”
which gave people tiny amounts of bitcoin so they could experience
it. The person who created that ultimately became one of the first
leaders of the Bitcoin Foundation — which shows how important
community engagement is for a project like this. But this is nothing
new. Ask Paul Glover — the inventor of Ithaca Hours time-banking
credits — what his secret to success was, and he’ll tell you the
key is relentless organizing. He’ll tell you that he spent a decade
calling businesses every day to discuss with them how they could meet
their needs without using U.S. dollars. For me, organizing
alternative money systems feels like a very natural and practical way
for social justice activists to help the communities in which they
live in material ways.
What particular examples of cyptocurrencies in action are
you most interested in?
First of all, we need to give Bitcoin its due credit. It went from
being worth pennies to hundreds of dollars in five years. Without
Bitcoin we wouldn’t be talking about cryptocurrency — so I’m
still very interested in it’s proliferation and success. People are
beginning to create all types of interesting “altcoins,” which
are modified Bitcoin software deployments that run on independent
networks, and have their own configurations and market values. I
really like
Devcoin, which
could theoretically fund lots of open source software production,
and
Permacredits, which
propose a way for people to invest in permaculture projects.
Maza
Coin is now the official currency of the Traditional Lakota
Nation, which has the potential to be really historic. The idea of
giving these “altcoins” national identies is really catching on,
with
dozens
of “national altcoins”
now in existence.
The other really interesting development that’s slowly maturing
is that people are beginning to use cryptocurrency’s components to
do things other than mere “currency.” The most promising of those
projects is Ethereum, a platform for coding cryptographically secured
contracts. The implications are immense when you consider how much of
our society depends on contracts — corporations, constitutions,
financial securities, laws, even games. Ethereum is being designed to
give us the ability to create machine-readable and executable
contracts that we can generate quickly, easily and at near zero cost,
and administered not by bureaucracies but by computers. People who
are interested should check out
the
project website. But first, they should read
your
article about it on Al
Jareeza.
It’s striking to me that enthusiasts describe
cryptocurrency as a “space” and an “ecosystem,” when it seems
so clearly divorced from physical space and ecology. But there has
also been discussion about usingcryptocurrencies to change how
we govern natural resources. Do you think they could help fight
climate change, for instance?
Yes — though in ways we haven’t thought of yet. Right now
groups could get funding through cryptocurrency
communities.
Dogecoin, for
instance, leveraged a meme to create a popular cryptocurrency, and
then used that popularity to fund do-good projects that got their
community excited, which then resulted in even higher values for
dogecoins. I also think we’ll see institutions that exist to
maintain common assets like art museums and land trusts figure out
how to generate valuable currencies that they’ll be able to use to
fund projects that align with their interests and support local
economies. While having art museums become cryptocurrency banks might
not sound revolutionary, it’s an example of how we can create money
systems around the resources we value most, rather than around
government fiat. In the future, systems like Ethereum will create
opportunities to rewrite how society operates. That process will
present a historic opportunity for laws to be changed. Will the
social justice activists be driving that change or will they be
hiding from it?
So this is really about power.
Whenever we talk about money we’re also talking about power. If
we want to focus solely on cryptocurrency, we’re talking about the
ability of normal people to take control over money, to make it their
own, to use it as a tool to better organize their communities and
meet their needs. If we expand the conversation to focus on
crypto-contracts, we’re also talking about the “refactoring” of
our society into something that can be read and processed by
machines. Cryptocurrency and crypto-contracts go hand in hand — so
yes, we’re talking about a lot more than money. We’re talking
about a machine-readable society and potentially the biggest shift in
law since the advent of lawyers. Society is poised to remake
itself.
What’s the best way for people to start learning more
about this scene and become involved?
There are lot of news sites out there for
cryptocurrency.
CoinDesk is
a good one. So is the
Bitcoin
subreddit. If you’re in New York City, you can go to an event
at the
Bitcoin Center,
but if hanging with libertarian men isn’t your idea of fun you
might not want to try that out. I highly recommend reading
Hayek’s
Denationalization
of Money for some economic, philosophical and
historical context. It was written in the 1970s and is a good
reminder that people have been thinking seriously about alternative
monetary systems for a long time, and that there is a lot of
knowledge already out there about how these systems could work. Read
part 8, “Putting Private Token Money Into Circulation,” for a
pretty simple plan for how to operate your own currency. Remarkable
stuff.
Remarkable, perhaps, but also profoundly destabilizing. It
sounds to me like we’re talking about not guaranteed liberation but
a new battleground, and the outcome will depend on who fights and
how.
I urge activists to think about cryptocurrency as a set of new
organizing tools — tools that the social justice community hasn’t
really begun to use. But when it does, it will find them quite
powerful on the battlegrounds on which it fights. Crypto-contracts
are also a tool, and with even wider implications because their
adoption will create new types of interactions, entities and
institutions. We’re still in the early days with these
technologies, but I urge people to start learning about them now so
they’re prepared to take advantage of the opportunities these tools
will surely create.
Nathan Schneider is an editor of Waging
Nonviolence. His first two books, both published in 2013 by
University of California Press, are Thank
You, Anarchy: Notes from the Occupy Apocalypse and God
in Proof: The Story of a Search from the Ancients to the Internet.
He has written about religion, reason and violence for publications
including The Nation, The New York
Times, Harper’s, Commonweal,Religion
Dispatches, AlterNet and others. He is also an editor
at Killing the
Buddha. Visit his website at TheRowBoat.com.
**This article originally appeared at WagingNonViolence.org,
an outspoken voice for peaceful change in our violent world.
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