Bitcoin has proven itself to not be simply a fad. Since its launch in 2009 by pseudonymous Satoshi Nakamoto it has become a major part of the online marketplace, with 100,000 merchants accepting bitcoin as payment as of February 2015. A 2017 study by Cambridge University estimates that there are somewhere in the range of 2.9 million – 5.9 million unique users with cryptocurrency wallets mostly consisting of Bitcoin. This is a significant growth from even 2013, where the number was pitched between 300,000 and 1.3 million. The advent of Bitcoin’s popularity has also seen major retailers such as Microsoft and Dell chipping in on the action; this new cryptocurrency can’t be ignored.
On a conceptual level Bitcoin is very appealing to those of us of an anarcho-capitalist persuasion as a decentralised currency represents a kind of peaceful protest against the state – by taking currency outside of the limits of taxation, regulation and inflation Bitcoin could represent a move towards voluntarism if adopted on mass. This kind of market-anarchism or ‘agorism’ was most notably propounded by Samuel Edward Konkin III in the 70’s, as an opposition to what he termed ‘partyarchy’. The rise of the Libertarian Party early in the decade saw a split between those who favoured a move to free-market principles by cutting the state out of exchange completely or pursuing Libertarian values through statist means, essentially infiltrating from the inside.
At the risk of sounding something like weak tea, my position is that both means are valid and should be followed in the interests of the free society. Agorism could only see true effectiveness if adopted in a major way, and perhaps these days the political climate isn’t so inclined. Despite Bitcoin’s popularity and economic fighting power, as of yet it clearly doesn’t have the means of sapping away the state’s power over the control of the money supply. But in equal consideration, there is a concern that Libertarian political parties have a long way to go too: the hurdle of being voted in past the mainstream authoritarian statist (that is to say, centre-left and centre-right) parties seems insurmountable despite popular vote momentum. Taking the USA’s Libertarian party as an example, in their first year (1972) they only accumulated 3,674 popular votes, which is now dwarfed by 2016’s 4,488,919. These numbers are encouraging in that they show growth, but prove that parties are not quite up to beating mainstream choices at the ballot; for partyarchy to actually be effective, then, lies with Libertarian thinkers in the mainstream pools such as the Republican party’s Rand Paul.
The over-riding point, however, is that surely action is better than silence and compliance. In this, a by any means necessary (excluding those which are violent or aggressive) attitude accommodates both agorism and partyarchy. Again, this makes the black/free-market facilitated by Bitcoin particularly exciting.
More than being a measure of anti-state agitation, Bitcoin could outprice market competitors and prove to achieve ends that the state cannot. In a 2015 interview tech entrepreneur Andreas Antonopoulos explained that immigrants working in developed countries send $560 billion home every year through conduits such as WesternUnion and MoneyGram which take a 9% fee as part of a transaction. This $175 billion that goes into the international remittances market could go directly to families in developing countries by means of Bitcoin. Also, this spare money itself is larger than the combined world government budget for foreign aid, which says a lot about the poverty curing benefits that the free market can provide on a global scale when compared to modern day states.
There are, of course, issues with Bitcoin that shouldn’t be ignored such as its volatility. It seems to have a pattern of fluctuation, that led in 2011 to a sharp rise from one Bitcoin equalling $0.30 to $32, and then back down to $2 (USD). In this way, Bitcoin does seem to move with real world markets, shown notably by the rise of the value of Bitcoin during the Cypriot financial crisis 2012/13. This, however, may not be cause for concern as the risk of over supply is curbed by the apparent limit that Bitcoin has of 21 million units – meaning that in the case of a price surge there is no opportunity for the cycle to be perpetuated by a bloated supply increase, as would be the case with the state’s fiat money.
Growing pains are likely with any new and unpredictable system. The concern perhaps lies then with how Bitcoin hasn’t established its own support network; who could one call for support if vast amounts of currency are suddenly lost (as apparently happens with Bitcoin ‘wallets’ and discarded hard drives)? This could, however, be a general plus point for Bitcoin as people will have to assume complete responsibility over their own funds and in turn have the benefit of assuming complete control of them without interference. What we can never account for, though, is a busted piece of hardware and that is where Bitcoin becomes a risky game.
Or perhaps the concern around the future of Bitcoin is with the increasing difficulty of the currency’s ‘mining’, the means by which currency is introduced into the system and also the means of adding transaction records to the Blockchain ledger. However, the increasing difficulty is one of the neatest ways that Bitcoin keeps itself in check: a kind of compensation takes place so as the rate of block generation goes up it becomes harder to mine – effectively self-regulating.
Despite its pinch points, the advent of Bitcoin and the subsequent growth of it should be welcomed by libertarians, or anyone who is state-sceptical. New technologies have provided those of a free market persuasion a new platform for exchange and an opportunity to tangibly set a freer economy into motion. Surely, if we can manage to keep our hard drive backups, wallets and GPU’s in the right place why wouldn’t we take the chance?