Is Bitcoin a Political Tool? Image credit: AdobeStock
Some people describe Bitcoin and blockchain as fundamentally complex technology that even competent and intelligent people find hard to understand.
And Bitcoin is not easy to grasp since some people see it like an alien civilization’s technology. While people use platforms like the bitcoin revolution to purchase and sell this cryptocurrency, there’s more to it than many individuals think. Essentially, these platforms enable people to trade Bitcoin for profits. But Bitcoin is more than an app or platform. Learning about this virtual currency requires you to understand the political assumptions inspiring it.
Essentially, Bitcoin represents radical technological libertarianism. And this is a school of thought with several names, including market anarchism, libertarian anarchy, and anarcho-capitalism. State distrust in favor of persons is at the core of this philosophy. Essentially, Bitcoin enthusiasts believe that society facilitates trade between individuals within a free-market economy with individual property owners driving it, not corporations or governments trading private property.
Globally, many people support individuals’ independence and freedom to engage in a free-market exchange. That means no corporations or states should act as intermediaries. And this creates a market with individuals, their property, and contracts for their trade.
Ordinarily, most people think fiat money is sufficient. However, the traditional currency has troubles that promote anarchy. For instance, states use central banks to control fiat money’s supply. Visa, MasterCard, and other payment networks are corporations. And these aren’t better than states-controlled central banks.
And this is where Bitcoin comes into the picture. Satoshi Nakamoto created Bitcoin to introduce a technological alternative to banks and fiat currency. This alternative would prevent tainting the Encap ideal’s pure individualism.
How Bitcoin Differ from Other Financial Technologies
Bitcoin is different from technology-enabled payment systems like Apple Pay and PayPal because it doesn’t depend on intermediaries like banks. Other payment methods provide a convenient interface for payment cards and bank accounts. Therefore, anarcho-capitalism divorces bank transactions completely to function in earnest. Thus, it doesn’t rely on traditional financial organizations and monetary systems.
Corporations and central banks can interfere with fiat money transactions because they control the financial system. And if only individuals maintain currency records, they may use money fraudulently.
To solve problems that most people relate to traditional money, Bitcoin uses mathematics. Blockchain technology provides a digital, shared record of every Bitcoin transaction. Each transaction has a cryptographic history with details of the previous successions of the exchanges. Thus, people can mathematically verify each transaction to ascertain its validity.
The Bitcoin users’ community verifies all transactions. Bitcoin protocol awards miners to incentivize the complex task of proving the transactions cryptographically. Thus, the user that validates the transaction first gets the reward. And this process is called Bitcoin mining. Bitcoin’s network distributes the record of transactions to all nodes or computers that people use to mine this virtual currency.
Bitcoin could force governments and corporations to decentralize control. That’s because no single entity controls this virtual currency. What’s more, anybody participating in the Bitcoin network’s activities can monitor the transactions in the public ledger. Nevertheless, the success of this virtual currency is mainly dependent on speculators or investors who use it as a tradable asset or investment. What’s more, the potential applications of the technology behind Bitcoin will also enable it to succeed as a political tool for decentralizing governments and large corporations.