Wendy McElroy: The Narrative and Philosophy of Cryptocurrency
“The central banks of Britain, Japan, the euro zone, Sweden and Switzerland have grouped up to assess potential use cases for digital currencies. Talk of such currencies gained momentum after Facebook announced plans last year to introduce a cryptocurrency called libra,” – CNBC. In the light of such developments, it is evident that those who view crypto as an engine of freedom are losing control of the narrative.
The Narrative That Powers Peer-to-Peer Digital Currency
“The narrative” is an important concept because those who command the narrative are most likely to determine the outcome. Once closely associated with political correctness, the term has gone mainstream in recent years. The narrative is the story of something—an issue, an idea—but it is more than merely relating the facts of a matter. In postmodern philosophy, from which political correctness draws heavily, the narrative creates reality; it creates the facts. The dominant story becomes the culture and the truth of a society. In other words, the narrative defines reality, not vice versa. This is one reason why the left is so preoccupied with the control of words and ideas; words and ideas control reality itself.
Most people use “the narrative” in a more casual way to mean a story that takes a specific approach or tone. Left-wing and right-wing narratives war with each other on issues, for example. Nevertheless, the term retains some of its original meaning. Giving context and interpretation to an issue does define what people view as true about it. In turn, the general public’s perception does influence the events or facts that follow, especially in the absence of a competing narrative. This is why states censor: they want to eliminate competing “truths.”
This process applies to crypto, including the blockchain. The narrative of freedom can define the outcome. When it becomes effective at doing so, censorship is likely; at the moment, there is no need. Again, those to whom crypto is an engine of freedom are losing control of the narrative. Few things are as important to the future of crypto than to reclaim Bitcoin’s original vision of financial freedom from what is becoming the dominant context and interpretation: statism.
Freedom Through Decentralization
Happily, freedom enjoys a distinct advantage. The mechanics of crypto favor it strongly. Crypto’s decentralization gives economic power to the average person who transfers wealth around the globe at will, requiring only the protection of solid encryption. And, yet, the state could win; some believe it already has.
Crypto needs a powerful competing narrative of freedom. It needs to remember its roots. Much more than financial freedom is at stake: every other freedom rests upon the ability of people to control their own wealth. Every time some aspect of free-market crypto is explored, such a narrative expands and users move closer to independence.
Establishing the Narrative
The first step in establishing a narrative of freedom is to reject the claim that crypto is simply another investment or money-making tool. Certainly, this is one function of crypto. And for some people, it may be the only function. But this is a comment upon their psychology or motives, not upon the inherent nature of crypto which exists as a thing apart. The claim is also dangerous; it opens the door to state control because the vast majority of financial institutions are now under its authority in one form or another and using them tends to legitimize their existence. This is a story that needs to change.
By far, the best freedom narrative for crypto is the truth because it withstands scrutiny and has the practical advantage of being backed by reality. The best approach to this narrative is to state the basics of crypto, simply and clearly. And then aggressively build upon them.
Crypto is usually discussed in economic, political, or technical terms. But Aristotle claimed that “all things are philosophical.” That is, the foundation of everything, including technology, is philosophical because philosophy asks the most fundamental questions about a thing.Aristotle
The Philosophy of Crypto
Philosophy is not arcane or elite. Classical Greek philosophy used to serve the same function that psychology does today; it taught the principles of how to live a better life. Philosophy can be broken into three broad categories: metaphysics, epistemology, and ethics. Metaphysics deals with the first principles or nature of reality and the relationship between what exists, including abstractions. Epistemology is the theory of human knowledge, especially its acquisition, validation, and scope. Ethics is the branch of knowledge that addresses the moral principles governing behavior. Three questions capture the relationship between these categories. What exists? How do I know it? So what?
The “Philosophy of Crypto” is a book-length project but a brief glimpse of it can be garnered by loosely applying the three categories of philosophy to crypto.
Metaphysics. Metaphysics arises every time someone accuses crypto of not being real because it is based on “nothing.” This is a metaphysical attack as much as an economic or political one.
These days, the accusation is not generally hurled at the blockchain which has been widely adopted by businesses and states. The blockchain’s elegant efficiency means that it will continue to spread into every corner of life. And useful things automatically acquire the status of real.
The second half of crypto—the coins—is a different matter. Crypto without physical backing, such as gold or a basket of fiat currencies, is often called “unreal.” Clearly, this claim is untrue. At its root, crypto is an algorithm—a string of computer commands that produce a result. In this case, the result is a coin that is accepted as a medium of exchange. Whether or not people credit it as valid money, crypto is definitely real. As with fiat, its value is based upon people’s acceptance of it. Unlike fiat, the acceptance does not have to be coerced.
Freedom From Mainstream Finance
It is like magic that Bitcoin could somehow come from nothing, and without prior value or authoritative decree, become money. But Bitcoin did not appear in a vacuum. It was a solution to a problem cryptographers had been struggling with for many years: How to create digital money with no central authority that couldn’t be forged and could be trusted.
Epistemology. What does truth mean in crypto, and how do human beings know it? The truth of crypto and the blockchain is that they work. The better they function, the truer they become. Human beings know when crypto and the blockchain are true because they work. Every time the blockchain delivers and preserves information, it is akin to a proof of principle.
Ethics. The “so what?” of crypto is contained within its structure. Which is to say, the ethics of crypto is an extension of its reality (metaphysics) and how its truth works (epistemology). Crypto is inherently decentralized and entirely voluntary. More than this, the blockchain cannot be centralized and controlled by a single hand or authority, and no one can be forced to use it. Free-market crypto is controlled by individual users who agree to exchange and co-operate to mutual advantage. It is a pure expression of non-violence. This is its ethical basis.
The only way to introduce violence is through crime, such as hacking a wallet. Overwhelmingly, the crime introduced is state control; even then, however, the state cannot impose its will on the blockchain, only on the people who use it. These people need to understand the narrative of freedom.
Ulbricht’s article concludes, “The promise of freedom and the allure of destiny energized the early community. Bitcoin was consciously, yet spontaneously taken up as money while no one was watching, and our world will never be the same.”
Bitcoin was created to fulfill a promise of freedom and the allure of destiny. It was forged by cryptographers who did not know it would become a popular currency and investment. Its worth as money should never be denigrated, but those who view crypto only as money are missing the point. The narrative of freedom must do a better job of explaining.
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