Wendy McElroy: The Crypto Revolution Will Not Be Centralized

Wendy McElroy: The Crypto Revolution Will Not Be Centralized

The Satoshi Revolution: A Revolution of Rising Expectations
Section 4: State Versus Society
Chapter 10, Part 2
The Crypto Revolution Will Not Be Centralized

You say you want a revolution. Well, you know,
We all want to change the world.
You tell me that it’s evolution. Well, you know,
We all want to change the world…
But when you talk about destruction
Don’t you know that you can count me out…
You say you got a real solution. Well, you know,
We’d all love to see the plan.
You ask me for a contribution. Well, you know,
We’re all doing what we can…

–John Lennon

Revolutions generally occur when two circumstances converge. State and society are in raw opposition on issues upon which there is no compromise; and the state can no longer contain dissent. Modern states and central banks have pushed the exploitation of average people too far. It is not merely that people are refusing to assist in the looting of their own wealth, it is also that financial systems are in one stage or another of collapse. Cryptocurrency provides an escape route for people to take back their own financial power. It also confronts the state with dissent that cannot be controlled.

Common denominators ensure the continuing success of the crypto revolution. One characteristic: users bypass statist institutions, like central banks and centralized exchanges (Trusted Third Parties, or TTPs), by using peer-to-peer transfers and decentralized platforms. Indeed, the desire to avoid financial TTPs was what created Bitcoin. Satoshi Nakamoto’s White Paper introduces Bitcoin with the words, “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.” In short, without state involvement-without TTPs.

In the political arena, the trusted third party problem dooms most revolutions. A discontented populace relies on revolutionary leaders to overthrow tyranny and to follow through on constructing a better world. The leaders rally the popular support they need in order to grasp power and, then, they are supposed to produce the promised results. But political TTPs do not champion or represent the average person any more than financial ones do, which is to say, not at all. The new leaders become the new boss—same as the old boss, or worse.

By contrast, crypto users control their own reins of power, without a need for leadership. This individual control leads to the second characteristic that ensures the crypto revolution’s success: self-interest. Crypto is driven by the pure and diverse self-interest of millions of people.


Self-Interest: Another Assurance of Revolutionary Success

Response to the word “self-interested” is usually negative, and intensely so. It is seen as a synonym for “greedy,” “selfish,” “amoral,” or “inhumane.”

But self-interest is not a matter of ethics but of praxeology, which is the science of human action. According to praxeology, every human action that is not reflexive, like sneezing, is purposeful. If someone acts, it is in order to achieve a goal that may be consciously realized or not. Even slightly shifting in a chair is prompted by a desire to relieve discomfort, improve a line of vision, relieve boredom… If an action serves no purpose whatsoever, then it does not occur.

Self-interest is simply goal-directed behavior, and the natural, healthy goal of all human beings is to improve their lives. In basic terms, this means procuring food, warmth, shelter, and the other necessities that allow life to continue. In evolved terms, this means securing the means to care for loved ones, to provide safety against hardship, and to build prosperity. When self-interest is pursued through work, merit, and trade, then the cumulative activity of “selfish” people creates a safe and prosperous society in which cooperation benefits everyone. It establishes freedom.

Ethics come into play when the phrase “enlightened” or “rational self-interest” enters the discussion. What constitutes “enlightened self-interest” has been analyzed ever since man knew enough to build a fire around which to sit and talk. Modern cynics conclude that self-interest lies in being powerful enough to screw others over with impunity, but this has not been the consensus opinion of philosophers and average people. Ancient Greek philosophy located self-interest in self-control, honesty, friendship, and the other classical virtues that were essential to happiness. Average people locate self-interest in self-respect, family, meaningful work, community, and the other reasons they get up in the morning. If a person defines his “enlightened self-interest” by how much pain he can inflict or how many cars are in his garage, then it is a comment upon his failure as a human being, not upon the value of self-interest. If he attempts to attribute his personal failure to the nature of mankind, it is no more than a moral sleight of hand by which to escape judgment.

A reasonable question arises; Aren’t all revolutions motivated by self-interest, even the ones that fail? The answer is, “of course.” No one trades the safety of obedience for the risk of uprising unless they are motivated by extreme self-interest. The motive can be material, such as a demand for land or food; it can be an injustice, such as racial or religious persecution. The existing violation of self-interest must be strong enough to make people gamble on being arrested, harmed, or having their families punished.

By contrast, crypto users who spurn the system do not need to take to the streets, to sign manifestos, or to confront the military. Their revolution of self-interest can occur in the comfort and relative safety of homes, behind closed doors.

The follow through is when self-interest breaks down in most revolutions. The old regime has been swept away; the new order prepares to govern. With eerie predictability, the new order issues the same demands that caused people to rebel against the old one: obedience, unquestioning belief, tribute, and respect for the privileges of the elite. The revolution has become centralized, and it is no longer responsive to the decentralized needs of the people whom it now views as a threat. After all, the people upended the former authority. Most individuals do not invite ideologues or armed guards into their homes and businesses. They do not welcome the “opportunity” to exhaust their lives in fulfilling the ambitions of an elite rather than in attending to their own self-interest. But they do so anyway, and the revolution is dead.

The reasons for compliance vary widely. Fear, peer pressure, respect for the law, weariness, an attempt to curry favor, confusion, hopelessness… The inevitable “moral” campaigns that the new order launches against self-interest are a strong factor, as well. Their highest virtue is patriotism; without it, parents would not send children off to die in wars in foreign lands. The individual must be sacrificed to the greater good; otherwise, people would not sacrifice their time and money—which is their lives—to benefit strangers. It is everyone’s duty to obey the state; this is the veil under which neighbors turn in neighbors, officials imprison children, and soldiers execute those who voice disagreement.

Crypto avoids the lethal pitfalls of centralized follow-through. There is no need to sweep away an old regime; the status quo falls of its own weight when it is ignored and rendered irrelevant. There is no new regime of elites to impose their self-serving demands; if there were, the ever-increasing privacy and anonymity of crypto would make widespread intervention problematic. After the revolution succeeds, users act in the same manner as they did before; they exercise a personal control of crypto that furthers their own self-interests.


Means Versus Ends, Versus Means Are The Ends

The foregoing expresses another difference between crypto and other revolutions. Crypto has no wall of separation between means and ends, between the method of achieving revolution and the end results. Typical revolutionaries proclaim that equality, justice and prosperity will arise when the status quo is destroyed and the counterrevolutionaries crushed. At that point, paradise will emerge. But means and stated ends are vastly separated, with paradise often coming to resemble hell. And it is not always because revolutionary leaders are insincere opportunists.

Gandhi espoused nonviolent revolution because he understood the intimate connection between method and results. The means were the ends in progress. In the weekly journal Young India, Gandhi wrote, “They say ‘means are after all means’. I would say ‘means are after all everything’. As the means so the end… There is no wall of separation between means and end. Indeed the Creator has given us control (and that too very limited) over means, none over the end. Realization of the goal is in exact proportion to that of the means. This is a proposition that admits of no exception.” Violence breeds violence. Lies require more lies. Power grabs result in the exercise of power over others. Equally, the peaceful pursuit of self-interest produces a society in which self-interest is peacefully pursued. A revolution gets what it gives. With crypto, the method is individual control of a financial system that bypasses the state. The goal is individual control of a financial system that bypasses the state.

Another criticism confronts the idea of a crypto revolution. Namely, that the use of crypto is said to be too diverse and dispersed to constitute an real uprising. This is a collectivist view of revolution that postulates the need for a common cause and consciousness. Crypto does not have either. A user in Venezuela, who is desperate to hedge the inflation of fiat, is not politically the same as a user in Germany, who profits from converting one crypto to another. They do not share goals or communicate. How can they form a revolution?

Easily. Consider the printing press. Like crypto, it caused a revolution through technology that allowed people to escape a monopoly of authority; with the printing press, it was the monopoly that state and church held on knowledge. Many technological breakthroughs, like the telephone, do not threaten authority. But the printing press and crypto invaded areas that the status quo considered to be their prerogatives.

When Gutenberg engineered an affordable and manageable means by which average people could mass-produce documents, then opinions, propaganda, and information exploded. The material printed had different goals, and publications often contradicted each other. The books and pamphlets were issued in dozens of nations and languages; often, they had been translated by people who did not know or coordinate with the original author. And, yet, everyone was part of the same revolution that gave birth to the Enlightenment. The revolution was freedom of speech through which average people were empowered by printing and reading material that they deemed to be in their self-interest. The revolution in free speech and knowledge occurred from the cumulative impact of the decentralized self-interest of strangers.

Revolutions do not need to be centralized. Centralization only returns people to the need for trusted third parties called leaders. Revolutions do not need a coordinated or collective consciousness. If collectivism is the means, then it is likely to be the result as well. The most effective revolution may well be a decentralized one that satisfies the uncoordinated self-interest of individuals. It may be what people refer to as “the free market.”

Writing again in Young India, Gandhi compared social change to “a beautiful tree, not one of whose millions of leaves is like any other. Though…they are from one seed and belong to the same tree, there is none of the uniformity of a geometrical figure about any part of a tree. And yet we know that the seed, the branches and the leaves are one and the same. We know too that no geometrical figure can bear comparison with a full-blossomed tree in point of beauty and grandeur.”


Conclusion

Yet another commanding advantage of the crypto revolution is overlooked. Namely, it does not arise as the last option of despair or rage. It comes from hope for a better future. In political theory, this is known as “a revolution of rising expectations.”

[To be continued next week.]

Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.