Are You Talking to Me?



Why Bitcoin Really Does Represent the Democratization of Money
by Aaron van Wirdum on March 18, 2014 9

In a recent article referring to ‘the creation of Bitcoin and the like as the Democratization (sic) of Money’, Aaron van Wirdum attempts to address what he somewhat obliquely describes as:

‘…various explanations supporting this characterization.’

because, he says:

‘at least one of these interpretations have caused some to doubt whether Bitcoin does in fact still represent the democratization of money, or whether it has perhaps become susceptible to less democratic forces throughout the years since its inception. ‘

I suppose it must be an occupational hazard for an altcoin pumper to lean towards being cryptic! Still, it seems a little over the top to mount an argument against a ‘characterisation’ when you are not even willing to say what precisely this ‘characterisation’ is or where it comes from….

Since I was the first to use and define the phrase ‘The Democratisation of Money’ in relation to the production of altcoins and other forms of privately issued money, I can only presume this piece was written to address some of the points I started to raise in ‘The United States of Everywhere – The Home of Democratised Money’ blog four years ago and in my book ‘Crackernomics -The Democratisation of Money.’

I said in Crackernomics that the point in time would come when the advocates of privately issued money would be forced to openly (or not so openly), address key issues, first with regard to the definition of what money actually is and then the definition of ‘democracy’ and ‘democratisation’ itself.

The Democratisation of Money as I originally described it four years ago, is the process by which Anglo Saxon state institutions and financial organisations have worked to introduce privately issued money. It cites privately issued money as the cause of the Credit Crunch and the preferred Monetarist means of the financial breakdown’s resolution.

The democratisation of money is anchored in Monetarism. Impetus is given to the creation of privately issued money by the state abandoning its maintenance of the monetary commons.

Most importantly The Democratisation of Money points out that Bitcoin and Derivatives are two sides of the same coin. Bitcoin is the radical face of democratised money and derivatives its corporate face.

The Democratisation of Money analysis does not take the ‘radical’ perspective of seeing things from the point of view of altcoins and their producers. Quite the opposite; it argues that anything that does not address the wider economic and political context in which privately issued currency has come to exist is Crackernomics – which in the case of altcoins can only amount to an advert for, or a consumer review of, this or that particular coin.

Now that we are clear what the real definition of Democratisation of Money is, we can return to van Wirdum’s take on the relationship between ownership, democracy and capitalism in respect of Bitcoin.

Defining democracy in relation to Bitcoin, van Wirdum tells us.

‘it is helpful ( to who?), to recognize….two types of democracy, as distinguished by political theorists such as Cambridge professor John Dunn,….often attributed to Bitcoin,’

What are these two types of democracy identified by this distinguished Cambridge professor?

‘The first main form of democracy… ultimately a technical procedure, rather than a political value…….the formation of government through the ritual of elections.’

van Wirdum suggests this form of political democracy compares to:

‘Satoshi’s proposal for a proof-of-work system,’

which is analogous to a:

‘“one-CPU-one-vote” mechanism.’

You will probably know that the original Bitcoin sales pitch boasted that anyone who had a computer could ‘mine’ Bitcoin, a major attraction of the new digital currency. Bitcoin was not supposed to be a game for just the rich we were told. Unfortunately for the hopeful ‘miners’:

‘this democratic feature did not really hold up.’

Because only those who can afford large specialist computer systems, (the means of production of Bitcoin if you will), can mine the remaining Bitcoins. Anyone with an ordinary computer has long since been forced out of the game.

But not to worry because:

“one-CPU-one-vote” mechanism should hardly be regarded as a fundamental ideal bolstering Bitcoin in the first place.’

Bitcoin was ‘democratic’ in the sense that everyone could get a piece of the action, in theory. Only in reality, it turned out that only everyone who could afford it could get a piece of the action. So much for this version of democracy and by the way:

‘this characterization of “democracy” as “majority vote” is a quite limited interpretation of democracy’


Since it turns out that ‘one man one vote’ and ‘majority rule’ etc are not really important parts of democracy, van Wirdum suggests we move onto:

‘the most important of the two (types of democracy), …the ideology of democracy, ..(which)….consists of various Enlightenment ideals.’

And these ideological enlightenment ideals would be?

Equality, popular sovereignty and self governance

Equality is defined by van Wirdum as:

‘equal rights under the law, freedom of speech and property rights.’

In this respect Bitcoin is superior to standard state money because:

‘no one person has more influence over the protocol than anybody else, nor can anyone bend its rules to his or her own advantage.’

To make it absolutely clear:

‘Not even the inventor, Satoshi Nakamoto, or huge stakeholders, such as the Winklevoss twins, are able to change the Bitcoin-code without reaching a consensus among users.’

Well that certainly sounds very reassuring on the surface. But on reflection what does this really guarantee the user of Bitcoin that state currency does not?

Currency markets are manipulated to create desired outcomes every day without affecting the basic ‘protocols’ of individual national currencies. That is why rich and powerful people are always very keen to promote what they call ‘free’ markets- because ‘free’ markets are the means to circumvent political control and exercise unfettered economic power. Currency manipulators don’t want the power to change the design of the five pound note or the way it is printed – what do they care so long as they have control of the markets the notes are traded in?

van Wirdum goes on to offer further bits of nonsense like:

‘arbitrary confiscations of wealth – as seen in Cyprus – are simply out of the question as long as bitcoins are stored securely.’

-the same is true of paper money- if you hide it under your mattress!

However, on a more disturbing note he suggests that the freedom to anonymously donate to a political organisation (through Bitcoin) is:

‘a pure and therefore very equal form of free speech if you will.’

This is explicitly the argument that was made in ‘ Citizens United v. Federal Election Commission’ the USA law that formally recognises corporations as people with the ‘rights’ to this kind free speech that actual people have. As a consequence the USA has secretive organisations funded by billionaires dominating whatever political discourse still remains..

Second on van Wirdum’s list of enlightenment ideologies is Popular Sovereignty defined by van Wirdum as:

‘ ..the legitimization of the rule of law by the consent of the governed.’

Contrary to what is implied by van Wirdum, this is ‘popularity’ in the sense of popular (Pop) music. ‘Pop’ music is not popular music because it is made by the population, it is music most often listened to by the the population. It is popular in the way it is consumed, not the way it is produced. The same thing is true of popular sovereignty. It is not power popularly exercised by the public, it is domination popularly accepted by the public:

‘And regardless of the legitimacy or desirability of this contract regarding present-day nation-states, central banks run their operations with questionable consent at best.’

‘they (are) purposely removed from the democratic political process’

This removal of the control of money from the democratic political process is a fundamental condition for the Democratisation of Money. Democratic politics justified the traditional monopoly of control that the state exercised of the issuance of money. It was therefore necessary to undermine the democratic state and its monopoly on money issuance to justify private money issuance.

This happened because there are no longer any ‘free’ markets outside of right-wing rhetoric. Since the state controls the economy, control of the state is control of everything. Based on this realisation Monetarists created ‘independent’ central banks across the western world. (That is independent from any truly oppositional political party that might get elected by accident).

The Monetarists have created an Independent Democratic Republic of Financial Institutions and Banks that no longer recognises the legitimacy of a nation state monopoly on issuing money.

This independence from political control was symbolised by the revocation of the Glass-Steagall Act in the USA, widely accepted as the legal doorway opened to the mass production of Derivatives- corporate democratised money.

And what of Bitcoin?

Bitcoin, on the far opposite side of the spectrum, quite literally exists because of the consent of its users; if they did not consent on the rules of the protocol they would not use it in the first place.

No more than the drug trade exists by virtue of the consent of junkies. The drug trade benefits pushers and they promote it. The need for drugs is a need of the desperate, in the same way that the need for your own currency is the need of desperate victims of corporate democratised money and Monetarism.

We come to the last and greatest gift of enlightenment ideology to civillisation: Self Governance which is:

‘the most important political value underpinning modern Western democracy’

Given its fundamental importance to modern western democracy it seems reasonable to ask where this principle has ever actually been practiced? This point is obliquely recognised by van Wirdum himself:

‘With Bitcoin, we now for the first time don’t need to delegate a small group of people to govern the rest, but we can instead transfer this power to universally verifiable open source code, written by and for the people. This is a truly revolutionary form of self-government.’

If ‘self governance’ is truly so fundamental to western democracy why would its introduction through Bitcoin be so ‘revoloutionary’?

Preferring not to dwell on contradictions like these van Virdum plows on:

‘the organizational structure of open source programming is, by far, the best way for common people to organize themselves ever invented.’

because, he tells us, people are:

‘free to contribute to the rules – the code – of the system,’

This is really like saying that members of the public are free to go out into the streets and work for nothing picking up litter for the good of the community. Sounds like a great idea, so how come nobody does it?

And after all this we finally come to the crux of the matter:

‘some of the smartest economists alive today have argued that ….money should be carefully managed by experts in order (to) (sic) stabilize the value, for instance, or to guarantee economic prosperity. According to these economists, if the people are supposed to have any say in this regard, it should be a very indirect influence at most.’

Well this observation at least is unarguable- So what should we do about it?

As I explained above Capitalism has reached the stage where it is completely dependent upon state support and regulation. This means that no ECONOMIC strategy is possible for managing capitalism in the future-only a POLITICAL one. If this is true then the altcoin movement is a political movement not an economic one. If this is true then it is subject to political forces and not economic ones. That the altcoin movement attempts to define itself in economic terms is simply a political strategy.

What are the consequences of this political strategy? It takes the victims of Monetarism and corporate democratised money (derivatives), away from the source of real power. It takes them away from the place where they can have a real affect on the powerful. In effect it concedes the hijacking of the state by Monetarist interests and suggests that the dispossessed should leave and try to start up a new system somewhere else. Does anyone seriously believe that these powerful interests will allow the altcoiners to develop an alternative system free from their control? It is the Monetarists who began the Democratised Money experiment in the eighties and nineties with the creation of Derivatives! The world we see before us today all of it, is a Monetarist project.

With a final flourish of his ‘radical’ credentials van Wirdum tells us that:

‘up until the 1800′s, the term “democracy” was actually a fringe word, only perpetuated by the “insouciant and incorrigible dissidents,” as John Dunn put it: “Those who chose to do so placed themselves far beyond the borders of political life, at the outer fringes of the intellectual lives of virtually all of their contemporaries.”

Whether the idea of ‘modern’,’ western’, democracy began life as the rhetoric of fringe radicals or not, ever since it was adopted by the elites of the Germanic Cult of Capitalism it has been used as a justification to steal, murder, subvert and oppress countless billions across the world. Not least among these victims of ‘modern, western, democracy’ have been the German/Anglo Saxon plebs who supported the ‘revoloution’ and who have since found themselves packed like animals into cities, reduced to selling their very selves to survive. And their children made to applaud the ‘freedom’ and ‘democracy’ that put them there as sheep and cattle grunting and hooting in praise of the butchers knife. And all in return for a chance to put a little cross next to the name of the master of their choice.

Two hundred years ago anyone with a shred of intelligence knew that the radicals and visionaries of ‘democratic capitalism’ that promised so much and delivered so little would either be in madhouses or palaces by the time everyone else realised the truth about what they offered..

As van Wirdum says:

‘Sounds remarkably familiar, doesn’t it?’

Yes it does.



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