Cryptocurrencies and blockchain technology are the external, visible parts of an ideology that goes further than just replacing banks. If I'd have to sum up the main pillars under that ideology, it's decentralization of power and replacing trust in government with trust in technology. Both interesting and challenging ideas with pros and cons, which I will discuss here.
source: YouTube
In this post I'll first try to define "ideology," then roughly sketch the ideological background for cryptocurrencies and blockchain technology, and conclude with my personal opinion on the possibilities for social change and pitfalls to avoid.
Let's first take a stab at defining "ideology." What is it? As it turns out, it's not that easy to define. Just at a quick glance, ideology is often associated with sociological, political and economical ideals found on the far left and the far right on the political spectrum; when the term is mentioned, people often think of Marxism, Nazis, the U.S.S.R. or civil rights groups like Black Lives Matter, Proud Boys or Antifa, all operating on the fringes at either side of what's politically and socially acceptable in relation to current social and political norms. This is a mistake; like a fish that doesn't see the water, it's difficult to recognize the ideologies on which our current sociopolitical arrangements are based. "Free market capitalism" and "neoliberalism" are ideologies as well, they just happen to be the ones we're living now.
At its base, an ideology can be described simply as a world-view or a system of beliefs that make up a lens through which we observe and evaluate society, individuals and their relationships. One of the best attempts at defining the term comes from Karl Loewenstein in 1952:
"A consistent integrated pattern of thoughts and beliefs explaining man's attitude towards life and his existence in society, and advocating a conduct and action pattern responsive to and commensurate with such thoughts and beliefs."
source: UNESDOC
So ideologies are sets of coherent ideas and values, a lens through which the world and its problems is analyzed, a guide for thoughts and actions to solve those problems and maintain that which works well. This explains why any ideology that identifies and seeks to correct perceived problems in the status quo will operates outside the norm. Even though many libertarians and anarcho-capitalists will claim that we're not living in a free market society, it's the ideologies of free market capitalism and neoliberalism on which it is built. From Reagan to Clinton and from Thatcher to Blair, the message and practice has always been that "the market knows best" and "politics isn't the solution, it's the problem." The global neoliberal socioeconomical status quo of today is built on that ideological foundation.
And here's where we come at the point where we must identify the dangers of ideology. Any ideology. Because ideologies explain, or try to explain such large and complicated problems, they necessarily generalize and simplify. They point to a single problem in the complex machinery that is human society, and then offer a small set of simple solutions. The ideologies at the base of the current status quo have two simple solutions: 1) keep government small and 2) let the market decide. The focus on individualism over community and society is another pillar of this ideological foundation, but this flows logically from the principles of free market capitalism. For reasons we can discuss at length, this ideological foundation has failed us, because power and wealth are more centralized than ever before in human history. And this, ladies and gentlemen, is the problem that crypto-ideology seeks to amend...
Satoshi Nakamoto wrote his white-paper on bitcoin as a reaction to the global financial crash of 2008; the concentration of power in the hands of large banks, central banks and governments that served those banks and multinational corporations through constant deregulation of financial markets, led to a crisis we're still not recovered from. Decades of privatization and deregulation landed us in a situation where banks and corporations were allowed to privatize their profits and socialize their losses; we had to pay for their failed speculation and gambling with our tax-dollars. It was clear that governments and banks can't be trusted, and power needs to be decentralized; the two ideas behind the ideological foundations among early crypto-enthusiasts. To take away the financial power vested in banking, blockchain technology made possible a decentralized peer-to-peer network in which trust in government and banks was replaced with trust in the technology itself.
Cryptocurrencies are a tool for changing society. By using cryptocurrencies and blockchain technology, individuals will take control over their own finances and become less dependent on government and banks. Crypto-technologies are means to the end of crypto-ideology. These technologies are "trustless" and therefore don't depend on institutions that over time have proven to always start benevolent, but end up self-serving as they grow. I believe that anyone that isn't in this space just to make some quick money agrees with these lofty and noble goals. I know I do. But... I also know that decentralization isn't some magical cure to the disease of centralized power. To understand why, let's take a look at our oldest attempt at decentralization of power: democracy.
I won't surprise anyone, I think, when I say that democracy has failed us. Governments do not serve their peoples, in contradiction to what a democracy is supposed to be. The reason why this is the case is easy to understand and comes down to this: we've decentralized political power (one person, one vote) but not economical power. Whatever political party we've voted into office by wielding our political power, that party will be bought by the economical powers that be through lobbying and campaign contributions. This is why political parties don't serve the people but the large corporations and banks. Cryptocurrencies don't solve that problem, not yet anyway. Bitcoin whales can manipulate the market at will. Proof Of Stake centralizes power in the hands of large stake-holders. Apart from bitcoin, I know of no other cryptocurrency that is truly decentralized: they're all private businesses with founders who typically hold large sums of the tokens and coins. Just like with any other ideology, there are no simple one-size-fits-all solutions the the complex real-life problems we have to deal with as societies and individuals.
That's not to say that ideology isn't necessary: it is, we need more of it. And the ideology behind our favorite playground is sound, and we're moving ever closer to our stated goals; we're well on the way of solving the problem of centralization with DEX's (Decentralized EXchanges) and DeFi (Decentralized Finance). Ultimately though, we should avoid blind faith in the pillars of any ideology, including crypto-ideology. Trust in technology is only as good as the humans who develop it. Trust in decentralization is only as good as how true that decentralization really is. We are pioneers in a new field that combines technology, finance, economy, sociology and politics, and if we really want to change the world for the better, every aspect of human existence has to be taken into account. We're early. It'll take time and the combined efforts of bright minds in this nascent field of digital technology, digital money and digital assets. I believe we've only scratched the surface of what's possible and have the potential to really change the world for the better. I'm not smart enough to suggest solutions, but all solutions start with identifying problems and pitfalls; I hope I've done that. Thanks so much for making it this far; you have my respect and gratitude.
Bitcoin: The End of Money As We Know It
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