Bitcoin: it’s political!

An student issue analysis for MIS41240 at University College Dublin.

Written by Tara Merk, Summer 2019. Dublin.

As Bitcoin increases to grow in value and importance, claims involving its social, political and normative character have started to enter the discussion. While Bitcoin has previously been heralded as the ultimate means towards a new economic order in which corrupt individuals and institutions are replaced with unyielding, ideologically neutral technical code; today many take a more nuanced stance.

Although the notion that Bitcoin is, in fact, a highly political technology has gained increasing support, the arguments backing this support vary considerably. Where some claim that the libertarian tradition of the Cypherpunks is what informs the political nature of Bitcoin, others emphasize the role of ongoing power struggles between users, miners and developers. As such, the question arises: what makes Bitcoin political and how can Bitcoin’s political nature be analyzed?

Bitcoin may be political either by way of design or inherently due to practical necessity

To try and assess what makes Bitcoin political, it is important to begin by asking what it means to be political. Although a number of definitions exist, influential scholars such as Foucault and Giddens often associate politics with the exercise of power. While power itself remains a tricky construct, for the purpose of this blog post, we assume that exercising power is an ongoing process by which the structures defining our social world are created, reinforced and challenged. Consequently, to say that Bitcoin is political is to say that it has the power to create new social structures and hierarchies as well as reinforce or challenge the existing status quo.

When it comes to what makes technologies political — i.e., where to look in order to understand the power that technologies are exercising — Langdon Winner offers a useful classification. He challenges the idea that what makes technologies political is solely determined by the wider social and economic context in which they are embedded, by showing that there are at least two distinct ways that technologies can be political in themselves.

Firstly, technologies can be political in their design, which may privilege the needs of one user group and completely neglect those of another. To assess the politics of Bitcoin from this perspective, we must ask: who invented Bitcoin? Who maintains it? Who doesn’t? What motivations power the design and maintenance? And what intended and unintended consequences might arise for our social order? 

In the context of Bitcoin, such questions are interesting — but alas, hard to explore. For one, the identity (or identities) of Bitcoin’s founder Satoshi Nakamoto remains unknown and any communications from him, her or them have completely disappeared from the project since late 2010. Moreover, being developed as an open source software project, the background and motives of the many contributing developers are similarly hard to grasp in detail. While demographic analyses of Bitcoin developers, users and miners may help to follow the traces of some politics in Bitcoin (i.e., what consequences may Bitcoin have in the social realm given that currently a majority of Chinese miners maintains the system for a class of users made up of predominantly white males around the age 35?), analyzing the political nature of Bitcoin from a design perspective, poses a rather speculative undertaking.

Fortunately, Winner suggests a second form in which one might interpret and understand a technology’s political character. Here, he suggests that technologies can be inherently political in the sense that they demand a particular social order for them to function effectively. Saying that a technological artifact requires a specific social organization (be it in a contained space or society at large), asserts that technologies are inherently political due to practical necessity rather than ideological issues.

Applying this approach to the case of Bitcoin offers a way to characterize the digital currency’s politics without requiring detailed knowledge of the people and history of the project. This view posits that Bitcoin is political simply by requiring people to organize themselves in a particular manner to make the system work. This type of analysis may be able to generate insights into issues surrounding the increased centralization of Bitcoin mining or the somewhat hierarchical structure of decision making amongst Bitcoin developers.

Returning to the question posed at the beginning, i.e., what makes Bitcoin political and how can Bitcoin’s political nature be analyzed, the introduction of the two frameworks proposed by Winner and subsequent discussion offers some interesting insights. For one, Bitcoin may be political either by way of design or inherently due to practical necessity. While both frameworks offer rich bases from which to conceptualize Bitcoin’s political nature, the preceding discussion has shown that the latter may be the more promising path of research in the future as data is openly accessible.