“Bitcoin can’t lead on its own to a disintermediated society,” and other uncomfortable truths about BitCoin

We live in an epoch of techno-utopianism with a strong drive for techno-cracy. The former means that many believe that technology alone determines certain outcomes, while the latter believes it is a good thing that flawed human processes are replaced by ‘clean’ technological processes. Both attitudes are very dangerous.

First, distributed technologies do not necessarily lead to distributed outcomes. We have seen this historically with the effect of the invention of printing, which led to a democratisation of knowledge and literacy, but also in time replaced the local autonomy of free medieval cities with much stronger and controlling nation-states, i.e. more political centralization, not less. Networks which have no counter-measures to maintain equality inevitably lead in time to a new concentration of resources. Hence, in Amazon and iTunes, the so-called long tail of culture consumption predicted by Chris Anderson is no longer operative, and in p2p social lending, 80% of loans are provided by big bangs and institutions, the very forces the technology was supposed to disintermediate.

Again and again, we see that the potential disintermediation of power, which may affect established powers, creates new intermediaries, such as the platform monopolies. Technologies are indeed, used by social forces, who inflect technologies for their own needs. The inequality of bitcoin ownership will inevitably further affect the structures that make bitcoin operational, leading to new kinds of monopolies. Technologies are always infused with human values, no programming or infrastructure is truly neutral in that respect.

Michel Bauwens’s “A political evaluation of BitCoin” sums up some of the most overlooked problems with cryptocurrency. A short read (~5 minutes) and very worth the time.

See also: