Can Cryptocurrency and Bitcoin Save Capitalism?

The Complexity of Economic Systems

Needless to say, our economic systems have also correspondingly become more complex over time. Our ancestors have been known to use anything from livestock and grains, to shells and beads to establish a medium for exchanging wealth and trading value. From direct means of exchange, such as barter, to using indirect assets like metal coins, paper currency, electronic cash, and now cryptocurrency; human beings have indeed crafted financial and economic systems that are incredibly complex in scale as well as structure. One can safely say that no other creature on earth has engineered anything of this nature. Cryptocurrencies just add a new, technologically driven dimension to the evolution of this economic phenomenon.

The Socialization of Money in Humans

Humans are certainly the only animals that pay to stay on this planet. It is not surprising that the ubiquitous influence of money on human psychology has significantly shaped our social standards throughout history. Consider examples such as our globally connected economies, manufacturing and service industries, educational institutes, research laboratories, defence systems, entertainment and news media, healthcare, food, real estate, etc., — all these systems ultimately run on money. 

One cannot deny that from an anthropological and philosophical vantage point, money certainly counts as a curious feature of our species’ existence. Although it is absolutely true that capitalism has generated a plethora of problems such as corruption, greed, and inequality in the world, we cannot really imagine human societies without money. Like Mark Fisher wrote in his book, Capitalist Realism: Is there no alternative?, “It is easier to imagine an end to the world than an end to capitalism.” Human politics and social systems are therefore inextricably linked to money. The more important question is whether cryptocurrency will solve (or at least attenuate) the problems created by capitalism.

Technology of Money

The origins of cryptocurrency are based on research done in the field of computer science in the early 1980s. The American cryptographer and computer scientist, David Lee Chaum, in his doctoral dissertation, Computer Systems Established, Maintained, And trusted by Mutually Suspicious Groups, first proposed a blockchain protocol in complete detail. Chaum’s work became the foundation for the now famous white paper, Bitcoin: A Peer-to-Peer Electronic Cash System, that the enigmatic Satoshi Nakamoto published in 2008, marking the birth of Bitcoin and the emergence of cryptocurrency. This new form of currency was intricately linked to technology, rooted in cryptology and inspired from mathematical puzzles initially devised to test computational efficiency. With cryptocurrency, the trajectories of technology and economics had thus become intersected in a novel way. And this is what gets most people, especially early adopters, so excited about the prospects of cryptocurrency in engineering a new future. 

Bitcoin, for instance, has been hailed as a decentralized monetary system that is executed on an open-source software. As discussed elsewhere, Bitcoin transactions are recorded and verified by nodes in a public, distributed ledger called blockchain, which forms the encrypted network for moving these cryptocurrencies. The inherent peer-to-peer design of the blockchain system is claimed to allow for trust-less and tamper resistant financial transactions. More radical proponents of cryptocurrency have philosophized that Bitcoin is innately disruptive and anchored in anti-establishment and anti-system ideologies. A lot of this support has also been criticized for its cult-like proclivities, which have been feared to catalyze paranoia about government power and facilitating anarchism. These socio-political dimensions are therefore some of the key hurdles in redeeming the philosophical ethos of cryptocurrency that some of its advocates are so passionate about.

The Value of Success

Most people gauge a successful life in monetary terms. In the most fundamental sense, money is a social contract that also encodes social status and power. It is a convention used to assign value to goods and services. When something is valuable or rare, we price it higher. This of course is an oversimplified way of talking about money, as not everything that is valuable to others may be valuable to you, and not everything that is rare may necessarily be priced higher. Due to the inherent complexity of this phenomenon, the subjective and objective facets of economic philosophy continue to constantly redefine value.

Enthusiasts assert that the philosophy of cryptocurrency has been positioned to address some of the pressing concerns associated with value systems in traditional economics. Issues such as wealth inequality, access to banking, and global poverty are some of the most crucial problems that cryptocurrency aspires to overcome.

Bitcoin’s Path to Redemption

As an outsider, I can certainly say that if monetary systems like Bitcoin achieve the goal of creating a more fairer and just system for running the organic machinery of modern societies then the optimism around cryptocurrency is definitely justified. However, if it fails in doing this because of the same reasons that have marred human history when it comes to capitalism, then this new economics is also liable to become just another fancy form of corruptible power. On the other hand, if wisdom prevails and future generations are indeed successful in reengineering the modern world through radical and creative change using cryptocurrencies, then it will all be worth the effort.

If through mass adoption of cryptocurrency critical environmental problems can be solved, if global poverty and hunger can be significantly reduced, if wealth inequality can be diminished, then this paradigm will certainly be vindicated. However, without critical thinking and moral fortitude, we are likely to create more of the same problems in the future. Given these caveats, cryptocurrency will definitely have to live up to its expectations and promises if it has to realize its commitment to creating a paradigm shift. Like Albert Einstein said, “Try not become a person of success. Try to become a person of value”