Bitcoin’s ideological roots are grounded in a blend of libertarianism, anti-authoritarianism, Austrian economics, and cypherpunk thought. Its core philosophy is centered around decentralisation, individual freedom, and skepticism toward centralised systems of control, especially government and financial institutions. As such, Bitcoin is often viewed as both a technological innovation and a political statement against traditional power structures.

While I am interested in Bitcoin and its potential to reshape global finance, it is important to engage critically with the project, addressing its contradictions. Bitcoin’s promise of decentralisation and empowerment is not immune to the risk of perpetuating inequalities, centralising power, and reproducing structures it claims to disrupt. Thoughtful critique is not only a means of grappling with these issues but also a vital process for its evolution. On a political level Bitcoin, like any social movement, is susceptible to groupthink, and it must embrace critique from diverse perspectives to avoid dogmatism. By confronting its contradictions head-on, Bitcoin can grow stronger and remain aligned with its foundational vision.

Bitcoin’s Historical Narrative

Bitcoin and many of its proponents espouse a particular history of money rooted in the “Austrian School of Economics.” This perspective suggests that money evolved from barter systems to precious metals and, later, fiat currency - a story often used to justify Bitcoin as a return to “sound money.”

However, anthropological evidence suggests that barter was rare, primarily occurring between strangers or groups without trust or shared norms - not within communities. Pre-monetary economies operated largely on systems of credit and mutual obligation, where goods and services were exchanged based on relationships and social trust, rather than through a standardised medium. Money, then, often began as a way to quantify obligations within a society, tied to social hierarchies, religious institutions, or state power. Coins and currency emerged later, frequently as tools for governments to fund wars or consolidate control. In this sense, money’s origins lie not in barter but in systems of debt, power, and coercion.

Bitcoin’s origin story mirrors the mythic barter-to-money narrative, presenting itself as a “natural” evolution of money. Yet Bitcoin is not an inevitable or natural progression; it is a socially constructed system, shaped by specific economic ideologies and power dynamics. Its historical interpretation of money focuses heavily on its role as a means of payment - an instrument to settle debts and obligations - while overlooking the broader social and relational dimensions of money.

At its core, money is a social construct: a ledger of obligations that enables people to coordinate economic activity. Historically, it has served as a means of maintaining and fostering social relationships, not merely as a depersonalised medium of exchange. Here, it is useful to distinguish between money as a “means of payment” (often tied to hierarchy and coercion) and as a “means of transaction” (facilitating exchanges and cooperation within communities).

Bitcoin, in its current form, does not fundamentally strip money of its hierarchical and coercive features. Instead, by emphasising individual autonomy and its role as “sound money,” it risks perpetuating the same dynamics of power and accumulation that it seeks to disrupt.

Scarcity

Bitcoin’s philosophy, rooted in Austrian economics, often draws parallels to the Gold Standard, suggesting that money derives its value from being backed by scarce, tangible commodities like gold. Bitcoin, with its capped supply of 21 million coins, positions itself as “digital gold,” embodying the principle of scarcity as a source of value. This narrative is central to its value proposition but is worth examining critically.

The fixation on scarcity reflects an outdated fetishisation of gold and a misunderstanding of money’s social role. Gold’s historical prominence as a monetary standard was not inevitable but the result of specific social, political, and economic factors, such as its utility in empire-building and warfare. States adopted gold and other precious metals for coins primarily to fund armies and consolidate power, tying the value of money to state authority rather than decentralised trade. Bitcoin’s attempt to replicate gold’s scarcity as a universal monetary ideal might therefore seem historically naive, overlooking the contingent and political nature of money’s evolution.

More importantly, Bitcoin’s emphasis on scarcity ignores the fundamentally social nature of money. Money derives its value not from inherent scarcity but from its acceptance within a social network as a medium of exchange and store of value. Historically, money functioned effectively when it was widely trusted and used, regardless of its material composition or supply limits. Bitcoin’s artificial scarcity may create speculative value, driving investment and hoarding, but it does not inherently make it better suited for facilitating exchange or sustaining economic activity.

By prioritising scarcity, Bitcoin reinforces a narrative that misunderstands money as a static commodity rather than a dynamic social tool.

Decentralisation

Bitcoin’s decentralisation is rooted in its distributed ledger system, known as the blockchain. Instead of relying on a central authority, Bitcoin operates through a network of nodes - computers run by individuals or organisations worldwide - that independently validate and record transactions. This ensures that no single entity controls the system, making it resistant to censorship, fraud, and centralised failures. Consensus mechanisms, like Bitcoin’s proof-of-work, further secure the network by requiring computational effort to validate transactions, making manipulation exceedingly costly and impractical. This decentralisation is key to Bitcoin’s ethos of trustless, peer-to-peer financial transactions.

However, it would be wise here to distinguish between technological decentralisation and social decentralisation. While Bitcoin removes the need for central banks, its network still centralises power in the hands of tech-savvy elites, early adopters, and large mining operations. This technological oligarchy is concerning, as it arguably perpetuates inequalities rather than dismantling them. Is it a good thing, for example, for a single company like Microstrategy to own 2% of the total supply of Bitcoin? We might question whether Bitcoin’s promise of decentralisation truly aligns with broader social liberation.

Bitcoin as Anti-Bank

Bitcoin’s ethos as an “anti-bank” proposition is central to its identity as a disruptor of traditional financial systems. Designed as a decentralised alternative to centralised banking, Bitcoin aims to eliminate intermediaries, granting individuals full control over their money. Its transparent, trustless network challenges the opacity and centralised power of banks, which have long been criticised for their role in financial crises, wealth inequality, and exclusionary practices. For Bitcoin proponents, banks epitomise the inefficiencies, vulnerabilities, and moral hasards of centralised financial institutions, making Bitcoin’s peer-to-peer model a revolutionary departure from the traditional banking paradigm.

However, Bitcoin’s evolution reveals a paradox: rather than undermining capitalism, it has become deeply embedded within capitalist markets. As a speculative asset, Bitcoin is traded and held primarily as a store of value, with its volatility making it unsuitable as a stable medium of exchange. This financialisation of Bitcoin undermines its original intent, reinforcing the broader trend of an economy increasingly oriented around speculative assets rather than productive activity. Instead of challenging the inequities of financial systems, Bitcoin’s commodification mirrors and sustains them.

Moreover, Bitcoin replicates market-driven individualism, a cornerstone of neoliberal ideology. While it challenges the centralisation of banks, it operates within the same transactional framework, prioritising personal autonomy and competition over community-oriented alternatives. This ethos risks reinforcing the very economic worldview that created the problems Bitcoin seeks to solve.

While I am sympathetic to Bitcoin’s anti-authoritarian ethos and its critique of centralised power, I am skeptical of its reliance on markets as a substitute for the state. True alternatives to oppressive systems must transcend market logic and embrace principles of mutual aid, cooperation, and care. Social systems should prioritise collective well-being over competition and transactional relationships. Without such a shift, Bitcoin risks replicating the same power dynamics it claims to resist.

Conclusion

Bitcoin represents a bold experiment - a reimagining of how money, power, and trust can be organised in the digital age. Its innovations in decentralisation and peer-to-peer finance have already made a profound impact, challenging entrenched institutions and empowering individuals. Yet, as this post has explored, Bitcoin is not without contradictions. Its emphasis on scarcity, its historical narrative, and its replication of capitalist structures raise important questions about whether it can fully deliver on its promise of decentralisation and empowerment.

To overcome these contradictions, Bitcoin’s community and ecosystem must confront its ideological assumptions and consider how the project can evolve to better align with its transformative potential. Here are a few paths forward:

  1. Rethink Scarcity and Value: Bitcoin’s fixation on scarcity as a source of value could be expanded to explore alternative ways of fostering trust and utility. A shift from the “digital gold” narrative to one that emphasises Bitcoin’s capacity to serve as a tool for social coordination, cooperation, and inclusivity would encourage broader adoption and more diverse applications. This is already happening thanks to the Lightning network.

  2. Foster Greater Social Decentralisation: While Bitcoin is technologically decentralised, its ecosystem often concentrates power among early adopters, miners, and those with technical expertise. Encouraging initiatives that democratise access - such as improved user education and reducing barriers to entry for operating nodes could help distribute power more equitably within the network.

  3. Develop Complementary Systems of Cooperation: Bitcoin could be a foundation for creating systems that prioritise mutual aid, collaboration, and care over competition. For example, building community-oriented applications on Bitcoin’s infrastructure or supporting decentralised autonomous organisations (DAOs) that align with cooperative principles could offer a counterbalance to market-driven individualism.

  4. Engage with Critique and Diverse Perspectives: Bitcoin’s community must embrace pluralism, welcoming critiques and diverse viewpoints to prevent the kind of dogmatism that stifles innovation. This includes learning from disciplines like anthropology, sociology, and political economy to deepen the project’s understanding of money’s social role and adapt its vision accordingly.

Bitcoin’s greatest strength lies in its flexibility and capacity for evolution. By addressing its contradictions head-on and expanding its vision beyond ideological constraints, Bitcoin has the potential to become not just a challenge to existing financial systems but a platform for imagining entirely new ways of organising economic and social relationships. In doing so, it might truly fulfill its promise as a tool for liberation and empowerment in a more equitable and decentralised future.

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