Michel Bauwens: When we look at the emerging crypto economy, it is very important to disentangle the two co-mingled and contradictory aspirations that it can represent.
We said this at the very beginning from bitcoin: it represents the first socially sovereign currency at scale, and moreover it is strongly based on open source / commons dynamics through its open code. But that social sovereignty is immediately and very strongly embedded in another principle: that of the sovereignity and independence of the corporate class from any form of social and political regulation. It’s a declaration of independence from the market sector, which sees itself as society, since for the propertarians, the market IS civil society, and society is simply the sum of atomistic relations of individuals. If we want to make crypto innovation work for society as a whole, which is the whole that actually co-produces individuals and needs its own care, then the powerful but suppressed principles of social sovereignty must be literated from market totalitarian thinking and practice. This critique also applies to the blockchain. Yes, we can tweak design of the blockchain to serve the needs of the commons, just as we used the experience of corporate platforms to build platform cooperatives as an alternative.
Sarah Manski complexifies this basic dualism into five potential scenarios of the future, which are all already present in seed form in the design itself of the blockchain; the scenario of libertarian individualism, the scenario of corporate sovereignity the scenario of governmental control, but also crucially, the blockchain can also be adapted to cooperative sovereignty, through its potential as a major tool for building a global technological commonwealth.
No Gods, No Masters, No Coders? The Future of Sovereignty in a Blockchain World. Law Critique (2018)
The technical politics of the Bitcoin blockchain are often described as libertarian in part because the design choices of this ﬁrst blockchain emphasize the technology’s tendencies toward liquidity and decentralization. The builders of blockchain technology emerged from the self-identiﬁed cypherpunk movement of cryptologists and coders; Satoshi Nakamoto was a member.
As Nakamoto wrote in an email to early collaborator Hal Finney, ‘It’s very attractive to the libertarian viewpoint if we can explain it properly’ (Nakamoto 2008b).
Back when Satoshi had ﬁrst launched the software, his writings were drily focused on the technical speciﬁcations of the programming. But after the ﬁrst few weeks, Satoshi began emphasizing the broader ideological motivations for the software to help win over a broader audience. (Popper 2015 p. 30) Those economic libertarians who identify as ‘Ancap’ (or ‘anarcho-capitalist’) claim society best facilitates individual will in a free-market economy free from regulation by states or large corporations. The discourse of Bitcoin enthusiasts is revealing: the use of the term ‘mining’ to describe blockchain maintenance and ‘coin’ to describe a chain of digital signatures speaks to their fondness for gold. At the same time, libertarians generally share a faith in progressive technological determinism, believing that society can be improved and that social relationships and institutions can function more eﬀectively through the use of new technological tools. Blockchain forms, such as Bitcoin, institutionalize this ideal by enabling a form of trustless direct exchange among individual property owners. Applications such as uPort ID seek to wrest control of personal data from major corporations and governments, as well as to provide privacy protections to individuals (ConsenSys 2015). Evidence is widespread and multiplying of eﬀorts by technologists to use blockchain technology to challenge existing hierarchical institutional forms with peer-to-peer networks. It seems questionable, however, whether large numbers of people — as citizens, consumers, producers, etc. — will embrace a total shift from regulatory oversight toward a disaggregated society of autonomous individuals picking and choosing between peer-to-peer legal codes of arbitration and enforcement of agreements.
After more than two centuries of building a world beyond capitalist logics, the cooperative movement is well positioned to make the most of blockchain’s tendencies toward globality, liquidity, permanence, decentralization and future focus. Through these, blockchain is beginning to convert the long standing vision of a popular ‘cooperative commonwealth’ into the actual construction of a ‘global technological commonwealth’ enacted through the use of advanced exchange, communication, and governance technologies (Manski 2017). There are many current examples of applications that make the global decentralized exercise of a popular sovereignty possible. Blockchain for Change has developed Fummi, an application that uses blockchain’s immutability and globality to store digital identities for those lacking permanent homes (Schiller 2017). Applications that make use of blockchain’s tendency toward future focus (Aitken 2017)—via the utility of stored autonomous self-reinforcing agency (SASRA) to handle contract administration and management — can be found in the development of AgriLedger for agricultural cooperatives (Hammerich 2018) and of the Pylon Network for energy cooperatives (Klenergy 2017).
Decentralized commons-based currencies such as Duniter and Faircoin (Bauwens 2018) are now in use; these have been coded to reduce inequality via pro-vision of a Universal Dividend (also known as Basic Income) and other features. And emerging on the horizon are a series of next generation technology platforms designed to bypass bottlenecks and inequalities contained within current block-chain architectures; the most notable of these is Holochain (Brock and Harris-Braun 2017).We think blockchain is a powerful tool for the cooperative movement in its quest for economic democracy because many of blockchain’s tendencies toward globality, permanence, decentralization and future focus move parallel to ongoing cooperative projects. Additionally, we see in the distributed and secure structure of block-chain a limited safeguard against suppression should capitalist states move against blockchain-based pro-democracy initiatives.
Activist use of simple virtual private network (VPN) or Proxy systems to access blockchain applications is much less vulnerable to state attack than has proven the case for many centralized and ‘above ground’ social movement organizations. To the extent that the construction of a global technological commonwealth faces obstacles, these lie not in the tendencies of blockchain technology but instead in the somewhat insular path dependencies of the cooperative movement itself. We are uncertain as to whether democratizers will prove capable of creating a culture suﬃciently open, user-friendly, expansionist, and politically ambitious to maximize the possibilities oﬀered by blockchain.
Technocracies are characterized by powerful actors and institutions able to maintain unequal positions of power through their use and control of technical knowledge. In tending toward ethereality, blockchains favour those with superior technological knowledge and positionality. Blockchain coders enjoy a comparative advantage over lay users because in calibrating blockchain over multiple prototype iterations, coders establish a lasting frame of reference through which they imagine alternatives and make design choices. This agency can be used toward diﬀerent ends—as a means of resistance to capitalism, or as a means to personal proﬁt, or as path to power consolidation. Notably, the early days of blockchain coding have seen an organizational commitment to open source. Open source code is co-created in a cooperative manner and appears to be dominating the core development of blockchain. This may be true because blockchain coding is more demanding than other types of programming and because group participation in creating blockchain-based applications is inherently more purposive than individual participation in development. As blockchain applications become more lucrative, however, we are witnessing a growing cast of corporate in-house blockchain developers and blockchain developer billionaires. At least one tendency of blockchain technology — future focus — may be leading toward a sovereignty not of technologists but of the technology itself. The development of SASRA could enable the creation of blockchain businesses that run themselves with distributed and decentralized proﬁts, management, and services. These independent DAOs (decentralized autonomous organizations), would automatically leverage manifold smart contracts, thereby eliminating the lawyers, accountants and bureaucrats whose job it is to conﬁrm the trustworthiness and legal standing of contracts between parties (Dew 2015). One example is Colony (Rea et al. 2018), which is testing a decentralized platform for work collaboration. Overall — whether in the technology or the technologists, or in service of democracy, capital, or self — we see little question but that blockchain technology tends in every way toward some form of technological sovereignty.
With their abilities to mobilize unmatched ﬁnancial resources, major corporations are exploiting blockchain’s tendencies toward veriﬁability, globality, liquidity, permanence, and future focus to forcibly adapt the technology to their own purposes. For example, Kodak, Amazon, Facebook and other corporations have identiﬁed the potential beneﬁts of creating their own platform cryptocurrencies. Blockchain cryptocurrencies can include smart contracts that automatically dole out the company’s currency as a reward for developers who build apps on its platform or users who engage in desired behaviour. This kind of corporate ‘token economy’ has the ﬂavour of a traditional company town; in this case the owner of the online space is the sovereign. And corporations are extraordinarily bad sovereigns (Lessig 2006). Indeed, already functioning corporate sovereignties such as Google claim and expand their exclusive sovereign territory by absorbing existing spaces (Bratton 2016 p. 144). The introduction of blockchain’s powers of veriﬁability and permanence could further the degree of data granularity captured and monetized by these corporate platforms. All of this has the immediate eﬀect of strengthening hierarchies, centralizing power, exacerbating inequality, and generally weakening democ-racy. Furthermore, as some of the most advantaged players in the world system, corporations enjoy a signiﬁcant head start in the race to program their logics into mainstream blockchain applications, as well as the capacity to enact state policies that block new applications threatening future disintermediation. Where the environmental economics literature describes ‘technology forcing’ as technological development driven by regulatory pressure, we see a similar process underway in the corporatization of blockchain toward the ends of corporate sovereignty.”
Techno-totalitarian State Sovereignty
Many have claimed that blockchain technology will inevitably weaken the nation state, and in the ﬁnal analysis, it may. Yet at the moment, national and transnational state institutions are actively working to support and regulate favoured types of block-chain activity and otherwise, where blockchain applications are disfavoured, ‘to regu-late it out of existence’ (Nicolaci da Costa 2018). They are going about this by criminally investigating initial coin oﬀering (or ‘ICOs’) (De 2018), demanding currency exchanges turn over user information (Paul 2018), enacting capital gains taxes on cryptocurrency trades (Bernard 2018), criminalizing non-state cryptocurrencies (Iyer and Anand 2018), and more. At the same time, major powers such as China, Russia, Japan, and the United States, as well as regional technology leaders like Uruguay, Estonia, Slovenia, and Kenya—as well as subsidiary states—are all jockeying for comparative strategic advantage in the development and deployment of new blockchain technologies (Tapscott and Tapscott 2016).Such interventions signal the possibilities for states to expand their reach. In block-chain’s tendencies toward veriﬁability, globality, permanence, and future focus, state actors are ﬁnding greater capacities to intervene globally in the daily lives of individuals. These expanded capacities are making possible the emergence of new technologi-cal totalitarian forms of state sovereignty. To begin with, states cannot easily control what they cannot measure, and a blockchain-enabled Internet of Things (IoT) ampliﬁed by artiﬁcial intelligence furthers the degree with which states can monitor the material and social world. The rapidly expanding IoT is expected to more than triple in size by 2020 to nearly 21 billion devices (Stravridis and Weinstein 2016). When there is a tiny blockchain-connected chip embedded in each material object with which we interact, state institutions will assuredly seek to monitor and discipline the personal, political, and economic activities of the many. This prediction should not be controversial. Political parties in power regularly use targeted voter suppression technologies to gain partisan political advantage (Palast 2000; Norris 2014; Simon 2016). Police forces use technology to engage in ‘predictive policing’ that disproportionately targets communities of colour (Jouvenal 2016; Winston 2018). State welfare agencies use technology to track and restrict how food assistance money is spent or pension fraud or error (Templeton 2016; UK Government Chief Scientiﬁc Adviser 2016). The Chinese state is moving to a whole new level of state control with the creation of a national reputation system ranking individuals based on their economic and social status (Chinese State Council 2014). Altogether, recent history gives us reason to expect that state interventions into the development of blockchain technology are more likely to lead in a totalitarian rather than democratizing direction.