Chump Change: Decrypting Bitcoin & Blockchain

By Andrew Osborne, 27 October 2017
Image: Artwork by Andrew Osborne

Artists and academics are jumping on the blockchain bandwagon and talking up the potential for cryptocurrency and distributed ledgers to mitigate austerity capitalism. Attractive as techno-monetary fixes may seem they come at a dangerous ideological cost, argues Andrew Osborne reviewing David Golumbia’s The Politics of Bitcoin: Software as Right-Wing Extremism


At the 9th Berlin Biennale, artists Simon Denny and Linda Kantchev presented Blockchain Visionaries (2016), an exploration and celebration of the blockchain phenomenon. Denny, a self-professed enthusiast described the blockchain as, ‘a great model for dreaming dreams and telling a diverse and divergent set of new (and not so new) stories about how the world might organize in the future’.[1] Similarly, in his New York show Blockchain Future States (2016) Denny set out to investigate ‘three financial companies at the forefront of Bitcoin’: Ethereum, 21 Inc. and Digital Asset.[2] In the press release his gallery stated:

At a moment when public debate spotlights a global governance system that seems to ignore the needs of many of its participants, starkly contrasting visions for alternative political systems are emerging. What would a world look like where the collusion of an elite few would be rendered technically impossible? Can a truly inclusive global future exist?

Whilst expressing a political vision familiar from any article on cryptocurrency, the bland inferences about a tech fix for ‘elite’ power read as a bromide. On closer inspection some of these assertions have a lineage that is far from emancipatory, however.

The art world is ardently advocating for Bitcoin and other blockchain technologies. For instance, it has recently been suggested that the blockchain might ensure a system by which artworks are provided with trustable provenance (‘a spreadsheet in the sky’); or used to enforce contractual obligations; or to establish a ledger so that artists are paid any royalties due.[3] There is even a scheme to encourage small investors to acquire tiny portions of famous masterpieces – a form of fractional ownership that is clearly derived from the Bitcoin paradigm. Behind the digital dreaming much of this ‘utopianism’ appears as an effort to shore up value in the art market, which has been sagging ever since the 2008 crisis. None of this is particularly surprising given that art has long been a form of speculative investment, but this indicates how Bitcoin and blockchain boosterism regularly disguise baser imperatives (whether the boosters are themselves aware of it).


Simon Denny, Blockchain Visionaries, 2016


Denny exalts the blockchain as having, ‘the potential to change some of the most fundamental societal building blocks from which our world is built’.[4] However, among artists, writers and curators there is very little scepticism about this ‘world-changing technology’; a technology that, exorbitantly, claims the capacity to abolish or at least seriously diminish the powers of the nation-state. Instead, within the current art market, the blockchain and its numerous derivations are celebrated as inherently innovative, democratic and progressive. Like many blockchain evangelists, Denny sees the possibility of ‘a more distributed global future as more people become dissatisfied with key institutions such as governance and finance.’[5] However, as we’ll discover, this runs quite contrary to many of the founding assumptions of Bitcoin. It is these that are interrogated by David Golumbia in his book The Politics of Bitcoin: Software as Right-Wing Extremism (2016); posing a series of compelling questions about whose dream we are being asked to dream and whose future we are expected to build.


Bitcoin, Digital Culture and Right-Wing Politics

David Golumbia begins his book The Politics of Bitcoin with a challenge to the leftwing users of the cryptocurrency: how can Bitcoin be progressive? Rather than directly answering this initial question, he instead explains why Bitcoin and the implicit political framework that supports it is right-wing. This is not a book about the technical aspects of Bitcoin and the blockchain, then, but an analytic deconstruction of ideological claims made for the cryptocurrency. He contends that left-wing users must drop these dangerous claims if they are to make the case for the blockchain model as progressive. This is a matter of particular urgency, Golumbia goes on to prove, since many of the technological aspects of the cryptocurrency commonly described as ‘radical’ in fact rest on reactionary political and economic traditions, however occulted by the rhetoric of liberation. The purpose of The Politics of Bitcoin then, is to clear up these categorical inaccuracies in order to provide a more adequate diagnosis of the cryptocurrency.

Golumbia starts with a short history of the development of Bitcoin and its operational principles, cutting through much of the complexity surrounding the currency. Accordingly, the online ‘currency’ is described as a new form of digital payment, one that has distinguished itself from other online payment systems in two ways. Firstly, it has incorporated a novel form of cryptographic software (i.e., the blockchain) and furthermore, its value has ‘skyrocketed relative to official world currencies’ meaning that, ‘[in] just under a year early investors could have made around 8,000 percent in profits.’[6] Technologists in particular have lavished attention on Bitcoin, yet as Golumbia notes, many of the political and economic claims made for the cryptocurrency are seemingly derived from ‘extremist’ sources; often promoting conspiratorial fringe ideologies well outside of their traditional ambit. These precepts are more frequently associated with ‘far-right groups like the Liberty League, the John Birch Society, the militia movement, and the Tea Party, conspiracy theorists like Alex Jones and David Icke’.[7] Commonly, these groups target the political and economic role of the Federal Reserve. According to the conspiracists, the intentional function of the central bank is to destroy any value belonging to ‘ordinary people’ through inflation, a programme devised by a cabal of supra-national elites to debase the national currency. This accusation therefore begs an obvious question: how did Bitcoin enthusiasts come to repeat these same provocations?

Rather than presenting a technical analysis, Golumbia works at the level of ideology to reconstruct superstructural connections; revealing how far-right ideas became common-place within cyberlibertarian circles, through a series of unchallenged assumptions that arose in the early days of online communities. Golumbia begins by evaluating the widely held cyberlibertarian belief that, ‘governments should not regulate the internet’ [see Winner 1997]. Opposition to government regulation of the digital realm stems from the belief that, ‘freedom will inherently emerge from the increasing development of the digital economy [and therefore] efforts to interfere with or regulate that development must be antithetical to freedom’.[8] There is a double fetishisation at work here; firstly, of the market as an optimal form of information-sorting – one that’s computationally superior to human decision-making – and secondly, of the essential ‘freedom’ of that market. These predilections are most clearly evident in the ideological dicta of tech industry titans, Elon Musk and Peter Thiel, both of whom are mistrustful of state-imposed limits to their cavalier social power.[9] This commitment to the ‘market freedom’ demands a subordination to accelerative technological determinism and an unquestioning subservience to what appears to be a variant of manifest destiny, with little time to pause and debate the consequences. Consequently, critical thought is considered a handbrake on what could characterised as blind developmental fatalism. Yet, as Golumbia explains – and here is the subtlety of his thesis – to be a cyberlibertarian doesn’t mean one is literally a Ron Paul-style political libertarian. Instead, he sees it as a spontaneous ideology that rests on underlying assumptions that just happen to be promoted by less savoury political actors (many of whom are themselves funded by arch libertarian and conservative US plutocrats, the Koch brothers). Furthermore, Golumbia asserts that the ideological coordinates that structure Bitcoin were coded into the software at its inception. Consequently, it can be said that through the practice of Bitcoin, an extremist ideology is unconsciously promoted whoever the user. Therefore, Bitcoin should be considered the concrete medium of that ideology.

Concerns about ‘freedom’ and ‘government’ are the points of overlap between cyberlibertarian and political libertarian thought. However, ‘free’ within both contexts can be read as synonymous with the ‘free market’. Langdon Winner in his 1997 essay ‘Cyberlibertarian Myths and the prospects for their Community’ points out:

Crucial to cyberlibertarian ideology are concepts of supply-side, free market capitalism, the school of thought reformulated by Milton Friedman and the Chicago school of economics.[10]

As a consequence, government regulation of any market is seen as the totalitarian curtailment of freedom. It’s also possible to draw an analogy here between the neoliberal conception of the free market – as optimal ‘information sorting system’ – and the growth of computational power, inasmuch as both come with idealised expectations of exponential compound growth.[11] Within this impoverished framework, the ideas of free market praetorians such as Friedman, Stigler, Hayek, von Mises and Rothbard are adopted and disseminated.[12]


Simon Denny, 2016 (detail). Note blockchain icons Vitalik Buterin (Ethereum), Ludwig Von Mises and Friedrich Hayek. Bitcoin prize for identifying the face on the left


Bitcoin ideology is particularly redolent of Murray N. Rothbard’s ‘anarcho-capitalism’. Rothbard was the co-founder of the Cato Institute and like Ludwig Von Mises had profoundly racist tendencies.[13] Rothbard even boasted about purloining the label ‘libertarian’ from the left, something that he was immensely proud of.[14] Ironically however, while Bitcoin rests upon the worst premises of free market radicalism, it profoundly fails to live up to these ideals.

For example, the total number of Bitcoins is ‘capped’ in order to ward off inflation – which as we’ll see, is an apprehension derived from Austrian scarcity economics – yet capping has done nothing to prevent the tumefaction of the currency.[15] Similarly, the blockchain is often promoted as inherently democratic, although none of the Austrian School were proponents of the ‘equitable distribution of power’.[16]

At their limit – a limit that is often surpassed in current cypherpunk and crypto-anarchist rhetoric and practice – [the views of the Austrian economists suggest] that only government is capable of violence, and that even when private institutions and enterprises engage in what appears to be physical violence, it is in some sense of a different order than that practiced by governments.[17]

Consequently, among libertarians the oversight of large private concentrations of power is perceived to be entirely negative and this belief comes to fruition within the Bitcoin paradigm, under which the lack of regulation is heralded as a virtue.


Central Banking, Inflation, and Right-Wing Conspiracy

According to Golumbia, neo-Bircherist, free-market fundamentalist and cyberlibertarian ideologies coincide in a shared suspicion of the Federal Reserve.[18] This suspicion centres on the quality of central bank money, which has been ‘touchstone for the far-right’ since the creation of the Federal Reserve in 1913, and subsequently formalised by Holocaust denier and disciple of Ezra Pound, Eustace Mullins.[19] The principle fallacy promoted by Federal Reserve conspiracists is that inflation is a stealth tax and therefore the act of ‘printing’ money destroys hard-won value. Since the ’60s the John Birch Society (JBS) has advocated that even moderate inflation is a ‘hidden tax’; a claim that runs contrary to mainstream economic theory. Conspicuously, conspiracy theories about the destruction of value have been promoted by demagogues like Alex Jones to drive the unsuspecting toward purchases of gold and other precious metals.[20] Similarly, this discourse found its way into the Chicago School of Economics (Friedman notably contended that, ‘inflation is just another name for “printing money”’).[21] As such, what was once a fringe view has inveigled its way into the mainstream. More sinisterly, these bald counterfactuals are attended by well-worn anti-semitic conspiracy theories about elite control of the Federal Reserve, supposedly supervised by the Anglo-Jewish banking family, the Rothchilds. Yet, while these grotesque claims are repackaged in Bitcoin propaganda in order to appear more palatable, the racist odour is still detectable. One only has to visit the Daily Stormer to read how Bitcoin is ‘hitting the Jew where it hurts: their gold.’

There is not necessarily a ‘genealogical connection’ between Federal Reserve conspiracy theories and Bitcoin evangelism, but as Golumbia shows, a direct connection isn’t required, since this isn’t the way ideologies function.[22] Rather, they serve our needs opportunistically. That is to say, the very structure and performance of Bitcoin lends itself to Bircherist ideas. Bitcoin rhetoric replicates elements of racist right-wing Federal Reserve conspiracism, deploying the language and rhetoric of the far-right without consciously identifying it as such or understanding the origin of these Volk-tales. These narratives are ubiquitous throughout Bitcoin literature and as Golumbia states, the ‘bedrock precepts of right-wing conspiracism’ are the rule and not the exception when reading through the propaganda.[23]

Consequently, keywords such as ‘tyranny’ and ‘liberty’ dominate Bitcoin discourse. Here the assumption is that Bitcoin prevents the tyranny of a Federal Reserve, which merely serves private extra-national interests. Conversely, Bitcoin claims to free ‘ordinary people’ from the oppression of ‘State monetary policy’.[24] Golumbia goes to some length to explain the reactionary origins of these narratives and how they in fact serve a corporatist agenda – attacking the familiar bug bears of the wealthy: tax and regulations which deprive ‘individuals’ of true value. The strength of Golumbia’s analysis here is in rooting out political and economic claims among what are supposed to be value-neutral technological assertions. Furthermore, his critique serves to blunt the insistence on Bitcoin’s novelty, behind which we find familiar right-wing canards, treated as common sense by Bitcoin’s boosters. The occultation of the origin of these discourses within left-cyberlibetarian circles therefore makes it possible to declaratively reject right-wing politics, while at the same time uncritically replicating the values of the far-right.


Value and the Fed

If there’s a limit to Golumbia’s critique it’s that, while the book dissects cyberlibertarian and cypherpunk ideology, it could perhaps go further in explaining why central bank conspiracies have a generalisable appeal. In its brevity The Politics of Bitcoin doesn’t delve into why the state must necessarily intervene in the money markets as part of crisis management, when real and nominal values come into conflict. Golumbia does well to unpick neoliberal beliefs about the opposition between state and market – and he certainly isn’t uncritical of central banks per se – yet it is beyond the purview of his inquiry to explain why the invisible hand is necessarily clad in the gauntlet of state power (ultimately, giving lie to neoliberal fantasies about minimising the state).[25] Clearly, a strong state is required to ‘liberate’ public utilities and to eventually administer CPR when the insatiable markets have their inevitable heart attack.

So what are we to make of conspiracy theories regarding the role of the central bank? Paranoia about the Federal Reserve runs contrary to the observable function of central banks, which is in fact to guarantee the quality of money in the last instance. From a Marxian perspective, concerns about value have quite different origins than those of the far-right – concerns based on the incommensurability of use and exchange, a tension which begins in commodity production and ultimately generates a chronic divergence between price and value in the financial markets. By way of solution, central banks serve to bind together all of the accumulated inconsistencies of the economy and stand ready to make necessary monetary corrections.

On further inspection, we find that the Federal Reserve doesn’t exactly exert a godlike power over the economy. Before the financial collapse of 1907 competition between the private issuance of New York banks undermined the quality of money and any claim to be lender of last resort – something that J.P. Morgan ultimately couldn’t afford given the rise of powerful West-Coast competitors. Yet, the creation of a single central bank overcame this limit, since the Federal Reserve was placed above competition and given the sole task of defending the quality of money backed by its gold reserves. This afforded the bank the power to drive out bad money in any crisis by refusing to convert the private money of other banks into ‘real money’. Consequently, positioned at the apex of money, the Fed was able to maintain the balance of payments between other nations (since gold was previously the universal equivalent of global exchange, something that later became problematic as capital became multinational, requiring a further level of banking, the IMF, which can be considered the world’s central bank).

The devaluation of the dollar in 1971 signaled the collapse of the Bretton-Woods agreement that in 1944 had pegged the dollar to gold. This in turn triggered a search for supra-national superior quality money. However, as Suzanne de Brunhoff claims: ‘these attempts are founded on the fallacious proposition that a form of credit can function as the ultimate measure of value. No way yet has been found to guarantee the quality of national moneys except by tying them to the production of some specific commodity.’[26] Traditionally, the ‘specific commodity’ was gold; used as a yardstick by which to measure the socially average labour-time it took a miner to mine a specific amount of gold and thereby allowing comparable wages to be calculated. That said, gold is an austere measure of value, highly illiquid and was by the ’70s politically contentious. However, Golumbia observes that it’s not by accident that Bitcoin markets itself as a scarce ‘mined’ commodity that supposedly rivals gold as the backstop of value.

Karl Marx himself rejected the notion that central banks sit in an all-powerful position in the economy, despite controlling the circulation of money. Instead, he considered their power be ‘extraordinarily limited’.[27] As such, the central bank’s ability to refuse to convert the lower-order private monies of other banks is seen to be a merely repressive power: a ‘power of negation rather than creation’ and therefore has very little influence on value-creation beyond the sphere of exchange.[28] Overall, this nested hierarchy of banking institutions is only necessary because of the displacement of the incommensurability of money as measure of value and medium of exchange at higher and higher levels, a contradiction that is generated and originates in the sphere of production. Yet, ultimately the central bank has very little traction over the chaotic production of commodities and consequently cannot be considered the tyrannical nexus of power that both Bitcoin enthusiasts and right-wing conspiracists claim it to be. In short, the central bank is merely the ‘real rival’ of private banks, yet doesn’t have ‘absolute control’ of the money market.[29] David Harvey makes the following comment on this inherent tension between private credit money and state-backed ‘real’ money:

[We] can best interpret the different forms money takes – the money commodity, coins, convertible and inconvertible paper currencies, various credit moneys, etc. – as an outcome of the drive to perfect money as a frictionless, costless and instantaneously adjustable ‘lubricant’ of exchange while preserving the ‘quality’ of money as measure of value.[30]

In the innovative upswing of the economy, private credit money proliferates, yet in the creative destruction of the crisis – and we are certainly in an almighty crisis – investors cease to invest and instead seek auric safe-havens, since bad quality money is refused. Gold is perhaps the most popular and time-honoured store of value, yet Bitcoin has also been proclaimed a rival store of value to gold. However, there is an insuperable tension within Bitcoin itself, something ignored by the currency’s propagandists, who assert that it performs the function of both store of value and frictionless medium of exchange. This is an illusion that Golumbia labours to dispel in his analysis of Bitcoin as money.


Value is an illusion, man: Ethereum's Vinay Gupta journeys inwards 


What’s the Function of Bitcoin?

Whilst it is possible to describe Bitcoin as a currency, Golumbia casts suspicion on whether it is money at all, providing exclusive definitions of both currencies and money. Accordingly, Bitcoin doesn’t conform to any standard definition of money as a store of value or unit of account. It could arguably be described as a medium of exchange, yet this is merely the ‘currency function of money’.[31] Literally anything might serve as a medium of exchange: cowrie shells, cumbersome iron bars, artworks or even signifying pixels on a screen. However, if Bitcoin is unable to function as a store of value and unit of account, its utility as money is questionable. Bitcoin is only viable, because it is supported by existing world currencies, such as the Federal Reserve-backed dollar, on which it relies for its other functions. Consequently, virtual coins can only stand as a placeholder for goods on Silk Road in relation to their dollar price (which itself stands in relation to labour, wages and the price of particular commodity bundles). To this extent, however much we might idealise it, Bitcoin cannot be cleanly delimited from the really existing economy. Therefore, at this point we might pause and rhetorically ask: who realistically holds Bitcoins in their desktop wallet, without continually thinking of the rate of convertibility to the paper dollar?

Furthermore, Bitcoin can hardly be considered a useful store of value on the grounds of its famous volatility and susceptibility to hyperinflation. Subsequently, given Bitcoin’s historical performance, no one has any reason to ‘reason to expect that value will be maintained over even a short time frame’.[32] Golumbia states that in considering whether Bitcoin is a store of value, we begin to see where the ideology is coded into its architecture, especially when Bitcoin is presented as a scarce resource that is euphemistically ‘mined’. To this extent, Bitcoin is frequently championed as a safe-haven comparable to gold and in contradistinction to ‘debased’ national currencies. It is not coincidental that this view is often promoted by exchanges that sell gold to Bitcoin enthusiasts (and here we might presume that this is the real name of the game – an attempt to rally the price of ‘real money’). Swapping out coins for gold at the top of this volatile market is therefore a means of realising ‘real value’. Of course, this conveniently ignores the fact that central banks correct the price of gold in moments of volatility or that precious metals are themselves also subject to illegal price-fixing, as with the Libor scandal.

Additionally, on the question of value and quality of money, Golumbia undermines Bitcoin enthusiasts’ obsession with government-backed ‘fiat money’. He explains that, fiat by any common definition refers to the fact that central-bank money is printed on a worthless paper substrate – that is to say the medium is arbitrary. Yet amongst proponents of Bitcoin it is speciously understood that central banks print money ‘by fiat’, meaning by formal decree. This would appear to be a willful misreading. Despite all of these contradictions, Bitcoin enthusiasts remain in thrall to the cryptocurrency’s foundational myth as outlined by the oracular and perhaps fictitious crypto-person, Satoshi Nakamoto in 2009.[33] Given that Bitcoin has been subject to a ‘brutal destruction of value’ over its short lifespan, Golumbia argues that it would be absurd to uphold Nakamoto’s claim that only electronic currencies unregulated by central banks can be trustworthy in the face of uncertainty and therefore capable of resisting inflation.[34]


The Mining of Fools

Although familiar with the technical operations of Bitcoin, Golumbia states from the outset that he’s not expressly concerned with their intricacies. Instead his intention is to demonstrate exactly where Bitcoin falls short of its political ambitions. Much is made of Bitcoin’s ability to ‘decentralise’ and ‘democratise’ currency operations.[35] It is these qualities that are perhaps most appealing to left-wing advocates of the cryptocurrency. However, in terms of decentralisation, at least once in Bitcoin’s short history a single investor has controlled over 51 percent of the market (this monopoly giving them the theoretical ability to ‘change the rules of Bitcoin at any time’).[36] Similarly, when it comes to the ‘democratisation’ of access to Bitcoin, the amped-up computing power now required to laboriously crunch the algorithm and mine bitcoins exceeds what many could afford in what is obviously a ‘pay to play’ market.

This problem is not limited to Bitcoin alone. If Bitcoin is a software then it is software based on a model, and that model is the blockchain which serves as the basis for a whole ecology of cryptocurrencies. According to its advocates, the blockchain’s primary virtue is that it is decentralized. However, observably the blockchain operates through a combination of centralisation and decentralisation, depending on what aspect of the machinery you are analysing. The ledger may well be (rather unevenly) distributed, yet the sale of coins must pass through highly centralised and vulnerable exchanges. Furthermore, over and above the claims of decentralisation, ‘Bitcoin functions as a centralised and concentrated locus of financial power’.[37] This practical observation raises severe doubts about any supposed ‘democratisation’ and is clearly at odds with the cryptocurrency’s anti-regulatory ideology. However, the uptake of Bitcoin does at least guarantee one thing: the spread of the ideas of the anti-democratic John Birch Society, an ideology that would grant capital more power than it already has. The ironic consequence of this is that Bitcoin bolsters the exact same ‘political power that the blockchain is specifically constructed to dismantle’.[38] Consequently, uncertainty about its role as currency or investment has led to exorbitant claims, allowing Bitcoin zealots to ‘simultaneously advocate for two diametrically opposed ends’: disintermediation and mediation both at once.[39]

In the final section of his book, Golumbia establishes that Bitcoin – exactly because it lies outside regulatory structures that govern basic economic civil liberties – is ‘particularly prone to the kinds of hoarding, dumping, derivation, and manipulation that characterise all instruments that lack central bank control and regulatory oversight by bodies like the SEC’.[40] As such, hoarders and big players can manipulate the market and infamously, in the case of the Mt. Gox exchange, steal huge amounts of Bitcoin.[41] As a result, Bitcoin holders have often been victims of sharp practice, leaving them in the crestfallen position of calling for the very regulations they once considered themselves oppressed by:

Many economists recognise something that appears to have been beyond the inventors and advocates of Bitcoin. Without direct supply-based regulatory structures that discourage an instrument from being used as an investment (aka ‘hoarding’), any financial instrument (even gold) will be subject to derivation, securitization, and ultimately extreme boom-and-bust cycles that it is actually the purpose of central banks to prevent. In fact, there is an underlying general proposition that applies not just to Bitcoin but also to other tradable commodities: ‘investment’ and ‘currency’ functions oppose each other. Despite this, it becomes increasingly clear that a majority of Bitcoin enthusiasm emerges not from its utility as a currency but as a highly speculative investment (Glaser et al. 2014), despite the arguments in its favor focusing almost exclusively on Bitcoin’s currency-like characteristics.[42]

Under such investment conditions, what becomes clear is that Bitcoin’s key feature – ‘the market’s unenforceability of governmental rules’  – is exactly what allows ‘cheating of some kind [and] a breaking of the social contract.’[43] Consequently, this gives Bitcoin the complexion of a peculiar post-2008 speculative investment instrument. In fact, one might say that its structure is a quasi-feudal paradigm in which lower order Bitcoin miners toil to create market activity, speculated upon by powerful masters in an unregulated system. In this light, Bitcoin and other species of cryptocurrency begin to appear Ponzi-like in structure, or even worse, a disguised ‘work-at-home’ get-rich-quick scheme, the complexity of which obscures and even flatters those it exploits. Appropriately, Golumbia leaves the left-wing users of blockchain technologies with a warning:

This is not to say that Bitcoin and the blockchain can never be used for non-rightist purposes, and even less that everyone in the blockchain communities is on the right. Yet it is hard to see how this minority can resist the political values that are very literally coded into the software itself.[44]

While artists, theorists and curators have promoted Bitcoin and blockchain technologies as emancipatory, finding content, cultural capital and indeed economic rewards in playing the blockchain avant-garde, as Golumbia’s analysis reveals, these aestheticized (monetary) politics carry an ideologically right-wing payload – and value is always accompanied by values. Despite the claim to liberate us from austerity and centralised power, the Bitcoin and the blockchain reinforce the dream of a monetary solution to capitalist crisis, deflecting attention from alternatives – actual social struggle against the conditions capital now imposes upon us – that are perhaps more arduous but certainly less bogus. This has the effect of reducing art’s utopian critical function to a historical nadir: art totally subordinated to retailing the brutal story capital now demands, while blocking off (as it were) all more antagonistic desires.



The Politics of Bitcoin: Software as Right-Wing Extremism by David Golumbia, University of Minnesota Press, 2016



Andrew Osborne <andrew.osborne AT> is a Sociology PhD candidate at Goldsmiths studying migrant worker organisation in the US and currently works at the Royal College of Art




[1] ‘Blockchain as Gosplan 2.0’ by Izabella Kaminska:

[2] Press release for Simon’s Denny Blockchain Future States at Petzel Gallery, 8 September – 22 October, 2016:

[3] Oscar Lopez, ‘The Tech behind Bitcoin Could Help Artists and Protect Collectors. So Why Won’t They Use It?’, Artsy:

[4] Rebecca Campbell, ‘Simon Denny: Exploring the World of Blockchain Through Art’.

[5] Ibid.

[6] David Golumbia, The Politics of Bitcoin: Software as Right-Wing Extremism, University of Minnesota Press, 2016, p.7.

[7] Ibid.

[8] Ibid, p.8.

[9] Ultra-libertarian Peter Thiel has been described by Southern Poverty Law Centre as explicitly ‘white nationalist friendly’:

[10] Langdon Winner, ‘Cyberlibertarian Myths and the Prospects for Community’, 1997.

[11] For a thorough treatment of exponential compound growth and the ideology of ‘bubble economics’, see Michael Hudson’s article: ‘The Mathematical Economics of Compound Rates of Interest: A Four-Thousand Year Overview Part I&II’. (2001):

[12] This is well documented in the work of economic historian Phillip Mirowski who deals with the overlap between digital economy and neoliberal ideology: Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown, Verso 2014.

[13] In his 1992 essay ‘Right-wing Populism: A Strategy for the Paleo-movement’ Rothbard is infamously vocal in his support for David Duke’s presidential campaign: ‘It is fascinating that there was nothing in Duke’s current program or campaign that could not also be embraced by paleo-conservatives or paleo-libertarians; lower taxes, dismantling the bureaucracy, slashing the welfare system, attacking affirmative action and racial set-asides, calling for equal rights for all Americans, including whites: what’s wrong with any of that?’ M.N. Rothbard, Right-wing Populism: A Strategy for the Paleo-movement, 1992.

[14] ‘One gratifying aspect of our rise to some prominence is that, for the first time in my memory, we, “our side,” had captured a crucial word from the enemy. “Libertarians” […] had long been simply a polite word for left-wing anarchists, that is for anti-private property anarchists, either of the communist or syndicalist variety. But now we had taken it over.’ M. N. Rothbard, The Betrayal of the American Right, p.83.

[15] For a fanciful treatment of abstract scarcity economics, see Rothbard on eating a ham sandwich in Man, Economy and State, Ludwig Von Mises Institute 2009.

[16] Golumbia, p.10.

[17] Ibid, p.11.

[18] It could be said that Bircherism and its attendant conspiracism is the political bedrock of Trumpism, see ‘The John Birch Society Is Back’:

[19] Eustace Mullins was a notorious anti-semite and originator of ‘Jekyll Island’ theories about the ownership of the Federal Reserve. His literary output includes Secrets of the Federal Reserve (1952), The Biological Jew (1967), The World Order: A Study in the Hegemony of Parasitism (1985) and the article ‘Hitler: An Appreciation’ (1952) that compared Hitler to Jesus.

[20] Golumbia, p.14.

[21] Ibid, p.15.

[22] Ibid, p.26.

[23] Ibid, p.27.

[24] See John Matonis, ‘Bitcoin Prevents Monetary Tyranny’, Forbes 2012:

[25] For a fuller account of a how the neoliberal free economy requires the state monopoly on violence to privatise public assets and police the market, see Werner Bonefeld’s work on the origins of neoliberalism, The Strong State and the Free Economy, Rowman and Littlefield International, 2017.

[26] Quoted in David Harvey, The Limits to Capital, Verso 2006, pp.48-53.

[27] Karl Marx, Grundrisse, Penguin 1993, p.124.

[28] Harvey, p.250.

[29] Marx, p.125.

[30] Harvey, p.251.

[31] Golumbia, p.31.

[32] Ibid.

[33] Satoshi Nakamoto, ‘Bitcoin: A Peer-to-Peer Electronic Cash System.’ 2008.

[34] Golumbia, p.20.

[35] Ibid.

[36] Ibid, p.20.

[37] Ibid, p.38.

[38] Ibid, p.43.

[39] Ibid, p.37.

[40] Ibid, p.35.

[41] More recently, a supposed ‘hacker’ stole $31m of Ether, partly due to the fetishisation of open-source, meaning that ‘innovative’ smart-code contracts were able to be rewritten:

[42] Golumbia, p.36.

[43] Ibid.

[44] Ibid, p.43.