Bitcoin: the utopian conspiracy

As they say, Bitcoin might well be our future. It would allow us to get richer just by having it, and we would be able to transfer it anywhere in the world for free. We would never depend on governments again, banks even less so, and we would no longer be subject to our politicians’ and central bankers’ errors. However, have they understood, these enthusiastic and unconditional speculators, these libertarian idealists, that money is not just a value to be hoarded away, but a medium that also allows us to exchange and trade?

In these circumstances, the Bitcoin payment tool seems compromised at the least since no one would want to leave it if it were to appreciate greatly, whereas no one would want to have it if it were to collapse! So why spend a value whose unit price has taken off like Bitcoin’s has, from 900 to 19,000 dollars in one year? Transposing this logic to the dollar or the euro would in turn literally paralyse the economy since no one would spend their money anymore in the hope of becoming rich! Or at least of massively increasing the supply of Bitcoin, as the central banks do with great dexterity when they activate their money printing presses. It’s an idea that is batted away with disgust by “Bitcoiners” whose raison d’ être is precisely to reject state intervention, and whose deep, even existential anxieties are sourced from the hyperinflationary folklore of Weimar and Zimbabwe…

Might Bitcoin be the ultimate refuge from governments unworthy of our confidence and whose only recourse is to devalue money? In my opinion, Bitcoiners can be split into two categories: the naive newbies, and the revisionists keen on revolutionising the rules of the financial system to make it independent and unconnected to the stock market and politics, and therefore invulnerable. Those adept with Bitcoin are in fact a kind of agent Mulder from the X-Files, exhorting us not to believe anyone, who has clearly not understood that the economy only functions thanks to one ingredient: confidence. However, this ideological obsession that Bitcoin prospers from is being pushed to the pretty unhealthy extreme, fundamentally harming its development. As it currently stands, it only processes 7 transactions per second whereas Visa and MasterCard do 55,000! Unless it increased processing memory, which Bitcoiners categorically refuse to do, or introduced transaction fees which would be a blatant contradiction to a major attribute of this tool, renowned for eliminating all exchange costs. It’s the height of ridiculous and ultimate proof of the world’s amateurism in Bitcoin’s eyes: the conference planned for last weekend in Miami that was meant to symbolise its apotheosis had to refuse all payments in Bitcoin due to increased fees and an outdated system relative to number of transactions occurring.

With Bitcoin’s raison d’ être being to short-circuit the system, any considerable increase in bandwidth to accelerate transaction processing would open the door to gamesmanship between Bitcoin producers, who would henceforth become an enormous market that favours the rise of big players, in the very image of the current market and system that are so reviled by Bitcoiners. They basically intend on keeping Bitcoin’s “purity”, sheltering it away and immunising it against a system that is centralised, corrupt, and for the least part mismanaged. However, what should we think of Bitcoin’s gigantic consumption frenzy, whose potential to cause harm to both the planet and society is so enormous? How can we brush aside the fact the few Bitcoin mined are already using 0.1% of the world’s electricity? And that the appreciation of its unit price will lead to a fatal acceleration of its production, and therefore a dangerous aggravation of electricity consumption? It has indeed been predicted that in 2018 no less than 0.6% of the world’s electricity consumption will be for Bitcoin mining. Mining involves carbon, and is therefore no less polluting than a chemical manufacturing plant or a diesel vehicle, and it might even be responsible for the recent surge in petrol prices!

Bitcoin technology – albeit revolutionary – is no less reactionary. It is now drearily masking the inevitable implosion of its speculative bubble which has already lost more than 50 billion dollars of capitalisation in a few hours! The internet was at least already being used by half of all US households when technology shares were liquefied in 2000. Google, Amazon and AOL already existed at the time, and it was relatively easy to see the gigantic potential of this tool at the same time the bubble was imploding. It’s impossible to say as much for Bitcoin now, and also Blockchain, whose even most ardent defenders struggle to discern what sort of tangible systems might be needed for the mass consumption of tomorrow.