<nettime> Never Mind the Bitcoin?

[Patrice Riemens <patrice@xs4all.nl>]

Never Mind the Bitcoin?

By Patrice Riemens, Eduard de Jong, and Geert Lovink

We wrote about (and against) the crankiness that is called Bitcoin back
in 2015, at a stage when everybody was gawking at its sudden rise in
'value' from $250 to something like $400 - up from $5-15 not tah much 
earlier (1)

OK, if "a week is a long time in politics" (Harold Wilson)(2), how long
must be two years in the Digital Era?

Now that Bitcoin is 'futured', and has briefly peaked at a 
'stratospheric' $19K - that is
before 'crashing' at well below $15K - it's time to take stock.
The shortstory: it's as cranky as ever, only the numbers are crazier 
than ever.
(Oh, do we hear "and you ain't seen nothing yet"?)

But then, so is the 'Zeitgeist'.

The longer story:

Our present challenge is to 'ship' our message before Bitcoin
unavoidably crashes for real, reverting to the 'value' it held for long
time: gift economy rather than speculative markets gone bananas.
Publicizing after the inevitable crash will earn us the stale notoriety 
of
belonging to the 'told you so' grumpy brigade, a corollary of François
Mitterand's remark that 'they' will never forgive you to have been
right before your time.(3)

Conversely, 'telling you so' before, let's repeat, the unavoidable
showdown probably earns us the risée of the Bitcoin aficionados, prone
to tell you, in a fine replay of Dotcom boom times, that "this time,
it's different!"

Never mind that this argument has been peddled ever since humans tried
to part other humans from their money by letting them walk in (or into)
a pyramid, because, in fact, they succeeded every time.

The same applies to Bitcoin. Just forget about outlandish concepts like
'public ledgers', 'wallet' or 'encryption', concentrate on the most easy
to grasp part of its working mechanism that is so abundantly
clear: Even if you buy at $15K for something that's not even worth the
bits it's expressed in, if it sells a day later at $19K, you still make
a helluh'of a profit!

The reverse is, of course, also true, but hey, it's a casin... err,
sorry ... the 'magic of the market'! Which points to what may
be the chief characteristic of the 'Bitcoin phenomenon': the perversity
of a steadily more unequal and unfair world, where far too much
money is concentrated in far too few hands (even if there are millions
of them).

And these owners, to use that hallowed Dutch phrase, "don't know what to 
do with it out of sheer
madness."

There is another aspect: following Saskia Sassen's dictum "Finance is
not (about) Money"(4), we now can safely say that
Bitcoin is no longer a cryptocurrency as such. It is a speculative
vehicle in the form of a cryptocurrency, leaving it into a class of its
own with regard to other cryptocurrencies, more appearing so every
day—we lost the count quite some time ago. (Maybe, one should make an
exception for Ethereum, another wonder of hacker dude driven fintech,
surrounded by nearly the same exalted hype as Bitcoin.)

This leaves another interesting question: where are the Bitcoin pioneers
in this high-stake, demented risks, game of crypto Wheel of Fortune?
We all remember the years of the Satoshi legend, that mysterious entity
that must now turn in its anonymous grave. Those were the days: 'Bitcoin
evangelists' evoking a financial revolution—liberation—for the
little man, those oppressed and ransomed by the big financial players 
...

There was talk of 'community', of frictionless payments, of smooth
usability and widespread acceptance (actually, a large shop accepting
payment in Bitcoins, smack in the middle of London's 'hipster district',
and equipped with a Bitcoin ATM, admitted to fewer than 20
over-the-counter BTC transactions over the past couple of years)(5). 
This
evaporated as 'exchanges' appeared all over the place (and got bust, or
hacked, or both), as an ever smaller number of increasingly bigger
'miners' took an ever larger part of the mining cake, and sale &
purchase of Bitcoins got expressed in any currency but its very self.

But then, have the 'early adopters' of Bitcoin struck it rich? After
all, in these days, Bitcoin 'mining' was easy and they went for free,
for a beer, of for a couple of Dollars at the most. They must be
millionaires by now! Well they may, and probably do, 'feel' so (as far
as their Bitcoins did not vanish when their computers crashed, they lost
their phone in the bus, or their thoughtlessly ditched hard drive came
to rest in a landfill). Yet for a majority of them, our guess is: they
never cashed out. Partly because the engrained Bitcoin 'philosophy' of
hoarding, partly because they became trapped in the eternal curse of the
market: it's always too early to sell (while it's always too late to
buy, of course).

As in all trading, in the end, the only ones who will have handsomely
benefited from the Bitcoin craze are the intermediaries — the very
outfits Bitcoin was supposed to dispose of.

In the meanwhile, fired up the spectacle of exponential valuation, the
mainstream press has, as it were, caught up with the Bitcoin phenomenon.
They muddle with a question they could as well have asked — and
answered — 5 years ago: "Is it a bubble?" Repeated often enough, and in
combination with the - somewhat disingenuous - 'scepticism' of large,
established financial institutions and their regulators, this has all
the likeliness of becoming a self-fulfilling prophecy — as both early
and the more recent Bitcoin fans alike will not fail to point out after
the actual collapse.

End of the story? Forget it! Just as hope springs eternal, the body of
Bitcoin may decease before soon, but its skeleton will remain alive and
kicking ... you in the ass!

So no prize for guessing right: our next deconstruct is about the
Blockchain. Keep tuned!


Notes/Sources

(1) Our Bitcoin texts:
http://networkcultures.org/geert/2015/01/28/geert-lovink-and-patrice-riemens-the-bitcoin-experience-part-i/
http://networkcultures.org/moneylab/2015/11/30/10-bitcoin-myths/ [1]
Bitcoin price history:
https://en.wikipedia.org/wiki/History_of_bitcoin#Prices_and_value_history
(2) Harold Wilson:
https://en.wikipedia.org/wiki/Harold_Wilson
(3) Francois Mitterand:
https://en.wikipedia.org/wiki/Fran%C3%A7ois_Mitterrand
(4) Saskia Sassen:
https://vimeo.com/90207380  (Saskia Sassen @ MoneyLab#1 conference)
(5) Bitcoin acceptance:
https://www.theguardian.com/business/2017/dec/02/bitcoin-is-it-a-bubble-waiting-to-burst-or-a-good-investment
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