A lot of these thoughts are inspired by or based on a lecture given by Torbjørn Bull Jenssen, Senior Economist at Menon Economics. He completed his MSc in Economics at University of Oslo in 2014 with the master thesis "Why Bitcoins Have Value, and Why Governments are Skeptical" (available here). The lecture was titled "Blokk-kjede: Et nytt teknologiparadigme" ("Blockchain: A New Technological Paradigm").
Now this is of course way off the area of my expertise (rhetoric), but at the same time I found a lot of implicit and explicit rhetoric going on in the discourse concerning blockchain and Bitcoin. Here are four of the impressions I took away from the presentation:
1. Blockchain is essentially a conservative technology
The technology is described very briefly in the video below.
According to Wikipedia, " A blockchain, originally block chain, is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a cryptographic hash of the previous block, a timestamp and transaction data. By design, a blockchain is inherently resistant to modification of the data. It is 'an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way'. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.
So in a sense, the blockchain technology is an attempt to create permanence in a fluid online universe, but without a centralized source guaranteeing that permanence. At its base, the technology is a ledger, but one where the credibility of the ledger has been transferred from the bank clerk to the technology. In that sense, blockchain is a modern museum archive or vault. The technology is designed for the conservation of information in the same way as the archive or vault is designed to conserve precious texts or artifacts. The difference is that the menace is not rust or mice, but rather hackers and government agencies who can usually steal or corrupt data. The blockchain solution to this threat is rather ingenious. Rather than retaining the original information in a safe place, the information is protected by active usage and proliferation, requiring all future transactions to repeat the original information of every transaction that has been made so far.
Of course, this does not guarantee that the blockchain cannot be changed, but it is increasingly costly to do so for every transaction (because the encryption chain gets longer). And that brings me to point number two:
2. Safety lies not in the impossibility but rather the costliness of the attempted hacking.
Safety is never complete, it is never absolute. Any wall that is built can be climbed or breached, any rules set up can be bent or broken. Asking "how do you prevent theft?" can be compared with the question "how do you prevent war?" The answer is that you can never be certain of preventing either, but you can do your very best to discourage it by making it an extremely costly endeavour. The claim is that the amount of computing power and resources needed to breach the blockchain system is so costly that the attempt simply does not make financial sense (the computing power alone to breach Bitcoin is estimated to cost upward of 2 billion dollars). This supposes some things of course, and makes some assumptions that can be challenged (for example, it does not account for a radical increase in computing power that could come with quantum computers etc.) but it is similar to the argument Alfred Nobel (inventor of dynamite), Orville Wright (co-inventor of the airplane), and Niels Bohr (inventor of the trigger for the plutonium bomb) made for increasing the costliness of war: once the object to be gained (victory) is no longer worth the transaction cost (the destruction of all major cities on both sides), the incentive for that act is gone.
3. Bitcoin (one of the products using the blockchain technology) is more than a technology, it has in some ways become a sovereignty unto itself, with its own form of governance and government (with power divided and in some way balanced between developers, miners, and users). When it comes to Bitcoin, the system and its safety cannot be reduced to the blockchain technology. Rather, there is a complex web of ideologically motivated people, exchanges, and other systems and actors with diverse incentives, who make this work. Bitcoin, exactly because it is all online, generally has to fend off or sustain more attacks than other currencies, but there are significant computing and brain power invested in its security and success. Rather than having a one-time technology (blockchain) that forever will have solved the problem of security, the Bitcoin community is all about further development and innovation. In some ways, this is similar to Alexis de Tocqueville's argument about monarchy and democracy. Monarchies are inherently stable, but then have to go through violent crises of succession whenever the king dies. Democracy is the crisis of succession made permanent, where "a king dies" every 2 or 4 years. This makes the peaceful transfer of power possible, because the people have been well trained to handle this kind of crisis. The system of world finance many in the Bitcoin community envision is also reminiscent of H.G.Wells' vision in The Open Conspiracy (written and published in 1928) where he describes a world system more governed by scientific criticism and merit than politics. Rather than resembling older forms of governance, he the World Republic would be something altogether different, and envisions a decentralized meritocracy where facts and scientific criticism of ideas (comparable to the mechanisms driving physics) will be the main forms of influence.
(You can follow the cryptocurrency market development here https://www.worldcoinindex.com/)
4. Implicit in both blockchain and bitcoin is an inherently libertarian ideology. How can a technology be ideological? Well, Freeman Dyson says a technology is ideological in the sense of what it makes easier or more difficult. For example, the atomic bomb makes offense the best defense, and in that sense it strengthens a hawklike aggressive military ideology. Bitcoin is inherently libertarian because it makes easier (almost inevitable) the libertarian choices and preferences for governance, and relationship between the government and the governed. Individual freedom and privacy are inherently made easier than oversight and control.
This of course leads to all kinds of abuses, with Bitcoin being used to pay for illicit activities, but it also makes it the preferred method to donate to many human rights activists and campaigners in countries with oppressive government control of the financial system. It opens up banking to the 2-4 billion people who do not currently have access to a well-functioning banking system, and it opens up payments to people and countries currently under sanctions by the US. In a way, it opens the way for "economic freedom" and removes barriers for parties who for whatever reason want to exchange money. According to libertarian ideology, this (although it can have some negative effects) overall is a good thing for human creativity and happiness. Left to themselves, without heavy oversight or intervention from state powers, humankind is most likely to be happy and prosperous.
Now this is of course way off the area of my expertise (rhetoric), but at the same time I found a lot of implicit and explicit rhetoric going on in the discourse concerning blockchain and Bitcoin. Here are four of the impressions I took away from the presentation:
1. Blockchain is essentially a conservative technology
The technology is described very briefly in the video below.
According to Wikipedia, " A blockchain, originally block chain, is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a cryptographic hash of the previous block, a timestamp and transaction data. By design, a blockchain is inherently resistant to modification of the data. It is 'an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way'. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.
So in a sense, the blockchain technology is an attempt to create permanence in a fluid online universe, but without a centralized source guaranteeing that permanence. At its base, the technology is a ledger, but one where the credibility of the ledger has been transferred from the bank clerk to the technology. In that sense, blockchain is a modern museum archive or vault. The technology is designed for the conservation of information in the same way as the archive or vault is designed to conserve precious texts or artifacts. The difference is that the menace is not rust or mice, but rather hackers and government agencies who can usually steal or corrupt data. The blockchain solution to this threat is rather ingenious. Rather than retaining the original information in a safe place, the information is protected by active usage and proliferation, requiring all future transactions to repeat the original information of every transaction that has been made so far.
Of course, this does not guarantee that the blockchain cannot be changed, but it is increasingly costly to do so for every transaction (because the encryption chain gets longer). And that brings me to point number two:
2. Safety lies not in the impossibility but rather the costliness of the attempted hacking.
Safety is never complete, it is never absolute. Any wall that is built can be climbed or breached, any rules set up can be bent or broken. Asking "how do you prevent theft?" can be compared with the question "how do you prevent war?" The answer is that you can never be certain of preventing either, but you can do your very best to discourage it by making it an extremely costly endeavour. The claim is that the amount of computing power and resources needed to breach the blockchain system is so costly that the attempt simply does not make financial sense (the computing power alone to breach Bitcoin is estimated to cost upward of 2 billion dollars). This supposes some things of course, and makes some assumptions that can be challenged (for example, it does not account for a radical increase in computing power that could come with quantum computers etc.) but it is similar to the argument Alfred Nobel (inventor of dynamite), Orville Wright (co-inventor of the airplane), and Niels Bohr (inventor of the trigger for the plutonium bomb) made for increasing the costliness of war: once the object to be gained (victory) is no longer worth the transaction cost (the destruction of all major cities on both sides), the incentive for that act is gone.
3. Bitcoin (one of the products using the blockchain technology) is more than a technology, it has in some ways become a sovereignty unto itself, with its own form of governance and government (with power divided and in some way balanced between developers, miners, and users). When it comes to Bitcoin, the system and its safety cannot be reduced to the blockchain technology. Rather, there is a complex web of ideologically motivated people, exchanges, and other systems and actors with diverse incentives, who make this work. Bitcoin, exactly because it is all online, generally has to fend off or sustain more attacks than other currencies, but there are significant computing and brain power invested in its security and success. Rather than having a one-time technology (blockchain) that forever will have solved the problem of security, the Bitcoin community is all about further development and innovation. In some ways, this is similar to Alexis de Tocqueville's argument about monarchy and democracy. Monarchies are inherently stable, but then have to go through violent crises of succession whenever the king dies. Democracy is the crisis of succession made permanent, where "a king dies" every 2 or 4 years. This makes the peaceful transfer of power possible, because the people have been well trained to handle this kind of crisis. The system of world finance many in the Bitcoin community envision is also reminiscent of H.G.Wells' vision in The Open Conspiracy (written and published in 1928) where he describes a world system more governed by scientific criticism and merit than politics. Rather than resembling older forms of governance, he the World Republic would be something altogether different, and envisions a decentralized meritocracy where facts and scientific criticism of ideas (comparable to the mechanisms driving physics) will be the main forms of influence.
(You can follow the cryptocurrency market development here https://www.worldcoinindex.com/)
4. Implicit in both blockchain and bitcoin is an inherently libertarian ideology. How can a technology be ideological? Well, Freeman Dyson says a technology is ideological in the sense of what it makes easier or more difficult. For example, the atomic bomb makes offense the best defense, and in that sense it strengthens a hawklike aggressive military ideology. Bitcoin is inherently libertarian because it makes easier (almost inevitable) the libertarian choices and preferences for governance, and relationship between the government and the governed. Individual freedom and privacy are inherently made easier than oversight and control.
This of course leads to all kinds of abuses, with Bitcoin being used to pay for illicit activities, but it also makes it the preferred method to donate to many human rights activists and campaigners in countries with oppressive government control of the financial system. It opens up banking to the 2-4 billion people who do not currently have access to a well-functioning banking system, and it opens up payments to people and countries currently under sanctions by the US. In a way, it opens the way for "economic freedom" and removes barriers for parties who for whatever reason want to exchange money. According to libertarian ideology, this (although it can have some negative effects) overall is a good thing for human creativity and happiness. Left to themselves, without heavy oversight or intervention from state powers, humankind is most likely to be happy and prosperous.
