Beware of Bitcoin

Believe it or not, I’m going to trash Bitcoin on spiritual grounds. Is there no limit to my irreverence?

Most people know almost nothing about bitcoin and the bewildering array of cryptocurrencies that are swirling around it now. Even for computer nerds like me, it’s a serious struggle to get a handle on it, and damn near impossible to explain it simply for ordinary intelligent people. But let me give you the nutshell of my complaint.

Bitcoin is designed to be a foolproof system for people who don’t know each other – and who would cheat each other at the drop of a hat – to trade securely with each other without ever having lower themselves to trusting each other.

To speak historically first of all, it has The Enlightemnent written all over it. That’s the 18th Century movement that was so thoroughly disgusted with how corrupted social relationships had become, that they decided to purge relationships out of life altogether. They were replaced by a Science and Economics.

On the Economics side, in 1776 Pastor Adam Smith designed a system to reduce human relationships to market transactions. The Invisible Hand of market competition would take a country full of heartless bastards and constrain them to act in the public interest. Competitive pressures would force them produce only what the public needs at only the lowest possible prices – and nobody would ever have to trust anyone else ever again. Trust and community – and the egregious excesses they have created – would be purged from life forever.

Unfortunately, this market utopia ended up creating their own egregious excesses. In our current context, the inevitable flaws in the market process allowed the banks to jump in and siphon off an unearned cut of each and every market transaction, until they accumulated enough wealth to rule the world in their own image.

Enter Bitcoin. Adam Smith’s Invisible Hand needed only a little help from the nerd community. They designed a hyped-up digital version. And it’s foolproof. Here’s how it works.

Think of why you need a bank. If some stranger is going to pay you for something and doesn’t use cash, you can’t really trust a personal IOU. The stranger may have spent the money elsewhere without your knowing. You’d better ask for a cheque with a reputable bank, because the bank will have vetted the depositor to some extent, and you can get the cheque certified if necessary.

Bitcoin makes all that unnecessary. The techies have devised a system where everything this stranger has done with any of his bitcoins is on display in a chain of public ledgers in the virtual sky – but without revealing who he is or who you are because that’s encrypted. So nobody can get away with double spending or any other form of fraud because that would be flagged and nullified automatically. Its a work of genius.

Then who needs banks? Well, banks are a two-edged sword. Their propensity to siphon funds out of all our transactions render them virtual thieves, hovering just this side of legality. But their position at the focal point of global exchange makes them potential allies of law enforcement when dealing with money laundering, terrorism and child porn. So while bitcoin can bypass legalized theft by financial institutions, it can remove some of our defences against vile transactions. Net benefit or net loss?

But that’s not where my worry lies.  Consider if we ever reach a totally bitcoin-ized society. It would be the ultimate, the complete un-community. Nobody will ever have to trust anyone again – let alone engage on a personal level. Actual human relations would just be an option on the side –  responding to the great anonymous matrix of automated exchange and consumption.

There is no society without relationships – there is no culture, no compassion, no love. If human interactions are replaced by virtual transactions in the great computer god in the sky – and nobody ever actually has to engage with messy humans to get their consumption fix – we’ve lost the social dimension of life. But then, Margaret Thatcher said there is no such thing as society, only individuals.

If as Karen Armstrong says, all religions are about compassion at their root – there is no compassion with anonymous arms-length virtual bitcoin relationships – no engagement, no community, no humanity. So if the bitcoin mentality takes over our lives, there will be no lives in any spiritual sense.

The only path out of this prison is building communities of grace where we engage personally with each other – using whatever currency is at hand when necessary – but for the purpose of bringing lives into communion with each other, not of dispersing our humanity in the abyss of trading anonymity.

Bitcoin’s really not fundamentally different from dollars, the love of which is our great peril. But it amplifies a non-society of non-engagement in exquisite anonymity – which is our greater peril.

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