I came across this book by the recommendation of the author Daniel Pinchbeck. Published in the “Forerunners: Ideas First” series of short books from the University of Minnesota Press, it’s exceedingly approachable—well shy of 100 pages. In blockchain-time, one might consider it archaic, coming from the generation of yore: 2016—although it remains as cogent and timely as ever. David Golumbia is a professor at the Virginia Commonwealth University, and text comes across as academic in nature, with countless citations.
Before diving into the meat of the subject, I offer the caveat that both the book, and this review, focus primarily on the Bitcoin community, and less so on the blockchain space in general. As the dominant incumbent and original blockchain pioneer, Bitcoin is understandably more conservative than many of the newer blockchain upstarts, to which I don’t give attention in this missive.
As the subtitle broadcasts, the thesis of the book is that Bitcoin is an instrument of right-wing extremism. Having been a participant in the blockchain space for the past year-and-a-half, it comes as no surprise to me that academics find the movement generally right-wing. The cypherpunk movement that birthed the blockchain community is firmly libertarian.
The last two sentences of the book aptly sum up Golumbia’s arguments:
"Recent events have shown repeatedly that we discount the power of engineers and/or ideologies to realize their political visions through software design at our peril. What is required to combat that power is not more wars between algorithmic platforms and individuals who see themselves as above politics, but a reassertion of the political power that the blockchain is specifically constructed to dismantle." (Page 76)
The relationship between money, markets, and the state are at the heart of Golumbia’s explorations. Does government enhance or curtail freedom? Whereas the left would suggest the former, the right sides with the latter.
"The cyberlibertarian belief that ‘governments should not regulate the internet’ really makes sense only if it is true that government exists to curtail rather than to promote human freedom. Yet in most non-rightist political theory, government exists in no small part to promote human freedom.” (page 6)
Golumbia supports this argument that the blockchain community is dominated by right-wing discourse with ample evidence. He then moves on to an exploration of inflation and store of value. During my entire time in the blockchain space, I’ve repeatedly needed to remind people that inflation is defined by prices. Milton Friedman’s unrealistic claims that inflation is driven by supply are rife throughout the space, and Golumbia’s research helps put my daily experience into a larger political perspective.
“From the farthest reaches of the explicit anarcho-capitalist fringe…to the supposedly responsible mainstream, we find the same insistence on the monetary nature of inflation and the concomitant immunity of Bitcoin to inflation due to its limited total supply.” (page 19)
Neither economic history, nor Bitcoin’s extreme volatility, support such claims. Bitcoin has gone through regular and periodic cycles of 5x inflation (hyperinflation). Limited supply does not guarantee high prices.
On this thread, beyond a few asides about the concentration of Bitcoin holdings, Golumbia fails to explore the effects of constrained-supply on wealth inequality. When token architectures can only raise funds for their capitalization via regressive and severely limited token supplies that offer the chance of 10x, 100x, or 1000x returns for initial investors or participants, the demographic results are that Crypto Valley makes Silicon Valley look like an egalitarian utopia. It almost goes without saying that extreme wealth inequality is generally associated with right-wing sympathies.
This brings us to the conspiracy theories surrounding the Federal Reserve, and monetary cosmology.
“Bitcoin is obviously built to escape the kind of regulation the Federal Reserve exerts over…’money supply regulation’…, yet this is frequently taken to mean that it somehow inherently escapes…’legal regulation.’” (pages 37-38)
Golumbia dissects the intermingled meanings of the term “regulation.” On the one hand, it relates to value, and on the other, legality. Golumbia is right to assert that the space often conflates the two. This likely ties back to the revolutionary outlook of many crypto enthusiasts; they’re as concerned about the Fed influencing value as they are about the SEC regulating issuance.
One of the recurrent conversations in the space regards the role of the state, not only with regard to cryptocurrency regulation, but more broadly. I regularly hear questions like, “are we headed for a state-less future?” My assumption is, no, we’re not. But opinions, aside Golumbia raises an important part about the definition of money. Many crypto enthusiasts regularly refer to and aspire to have Bitcoin and other tokens treated as “money.” And yet, according to Modern Monetary Theory, money is defined by its issuance by a sovereign government.
“Nation-state sovereignty and the very idea of money are inextricably linked in our world, and so the notion of money that is not issued by a nation-state is essentially a contradiction.” (page 54)
In other words, cryptocurrency could be money or could be decentralized, but not both. In some ways, this is a semantic conversation, but it gets to some of the heart of blockchain ethics and political theory—are decentralization and democracy compatible? And when I say democracy, I’m not referring to the deeply compromised situation we currently find ourselves in here in the US, but in the aspirational sense of the word used by David Graeber (in his book, “The Democracy Project,”) and Astra Taylor (in her documentary, “What is Democracy?").
And this brings us around to Golumbia’s concluding thoughts regarding politics and technology, and their tenuous relationship:
“Bitcoin and the blockchain do a remarkable job of reinforcing the view that the entire global history of political thought and action…has already been jettisoned through the introduction of any number of digital technologies.” (page 74)
“It is hard to see how this [non-right] minority can resist the political values that are very literally coded into the software itself.” (page 75)
The CEO at my blockchain startup, Gregory Landua, recently read Anand Giridharadas’ “Winner Take All,” and commented that it brought the necessity of government into the forefront for him. Corporate tyranny is already beginning to overpower government tyranny, and, however much we might despise the fact, the state continues to be the best instrument we have to mitigate the abuses of power rife within our current global corporatocracy.
Although Gulmbia has deftly performed the task of convincing us of his assertion that the blockchain space is dominated by right-wing rhetoric, he leaves it up to us to determine the more important question: do we care? I can attest from personal experience that many members of the blockchain community are deeply disenchanted with the both the content and tone of political discourse on both the right and the left. Without noticing, does that de facto mean we’re inheriting the conservative biases of our forefathers in economically liberal communities? Within a community so set on transforming the world, can we afford such naïvete? These are the questions Golumbia leaves us with, and questions that merit significant cogitation.
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