Home TRENDS & HAPPENINGS The socio-politics of crypto

The socio-politics of crypto

The socio-politics of crypto
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Image: Blockchain illustrated – courtesy Simply Explained – Savjee You Tube channel

By Charles F. Moreira, Editor

Let me say upfront that I have stayed clear of the exuberance and hype over cryptocurrencies such as Bitcoin and the over 2,000 others called “altcoins” currently listed on CoinMarketCap.com and others listed on other sites. Also, I have never owned nor traded any cryptocurrencies.

On the other hand, I recognise the value and potential uses of blockchain technology, originally described by Stuart Haber and W. Scott Stornetta in 1991, as a means to cryptographically secure a chain of blocks to timestamp digital documents so they cannot be backdated or tampered with.

Blockchain technology remained mostly unused until 2009 when “Satoshi Nakamoto”, the mysterious individual or group which developed Bitcoin and adapted blockchain technology coupled with “Satoshi’s” proof-of-work data to create a secure, distributed, robust, digital ledger used to record all Bitcoin transactions, which makes detection of any compromised blocks easy and makes it extremely difficult for hackers, even with the most powerful and fast computers to compromise all the distributed blocks across the network of participating computers.

The socio-politics behind alternatives

Would it shock readers when I say that the primary objectives behind Bitcoin and the altcoins are socio-political and that these have similarities with those of the hippie counterculture of the 1960s?

The quest to create alternatives to established lifestyles, societies, economic relationships, cultures, mores and so forth is as old as civilisation.

Aside from their outward manifestations such long hair, tie dyed clothing, permissive attitudes towards sex,  consumption of marijuana and LSD and so forth, the core of the hippie movement was to create a communitarian, environmentally sustainable mode of living close nature based upon cooperation, sharing and democratic communal living, adoption of eastern religions, New Age, mysticism and other spiritual beliefs; all as an alternative in opposition to the “establishment” values and mode of existence of mainstream society of their time.

A similar countercultural movement which preceded the hippies of the 1960s was the Wandervogel (Wandering Free Spirits or Wandering Birds) movement in Germany from around the end of the 1800s to the early 1900s up until the time of Nazi Germany before World War II.

This movement arose along with the opposition amongst farmers, rural people, the landed aristocracy, nobility, artists, intellectuals and others to the rise of industrialisation in Germany at the time, and it was during this period that the “Green” movement started in Germany, leading up to the environmental movements today.

It’s believed that the Wandervogel movement in Germany influenced the hippie movement in North America and Europe in the 1960s, and whilst the hippies are very much off the public’s radar screen today, besides some surviving hippie communes and individuals living an alternative lifestyle; however the alternative hippie spirit and ethos of the 1960s continues even until today, amongst countercultural youth of the 1960s who later became part of mainstream “establishment” society.

Manifestations of that countercultural hippie spirit and ethos can be seen in movements such as Free and Open Source Software, which sought to communally and cooperatively create alternatives to proprietary software.

It can also be seen in the idealism amongst some early Internet pundits back in the 1990s who saw the Internet and the World Wide Web as providing them with another shot at creating an alternative, borderless society with a perfectly free market environment in Cyberspace, in which any enterprising youth with a computer and Internet access in his or her bedroom could compete on par with established large corporations across borders and even beat them “David versus Goliath” style.

Bitcoin counterculture

It should be noted that “Satoshi Nakamoto” created Bitcoin around 2008, when there was a crisis within the “establishment” financial system, when there was much public anger over the U.S. government’s bailout of the “too big to fail” banks in the United States whilst banks there were foreclosing the homes of people with low credit ratings who had taken out generous sub-prime mortgages only to find that they could not pay and were turfed out into the street.

There also was much public anger against the Federal Reserve system comprised of 12 non-governmental, regional Federal Reserve banks the U.S. which serve as that country’s central bank and much public anger directed at the “banksters” at the time.

It was within this atmosphere of anger and mistrust of the “establishment” banking and financial system that “Satoshi Nakamoto” created Bitcoin, intending it to be a viable, alternative currency system which people can use to buy and sell goods and services across borders privately and in a parallel universe to and independently of “establishment” currency systems, which it also would undermine and hand “power back to the people”.

However, most of the narrative online about cryptocurrencies today does not mention blockchain at all nor does it mention much about cryptocurrencies being use to buy and sell. Instead, the narrative is mostly about Bitcoin’s and altcoins’ exchange rates with the very much established and regulated, “establishment” currencies, such as the U.S. dollar and others which Bitcoin was originally developed to circumvent.

Today, instead of being used as alternative currencies in Cyberspace, Bitcoin and the altcoins which followed in its wake, are treated as asset classes to be speculated upon and traded on cryptocurrency markets, just like stocks and shares are traded on stock markets, and exactly the same technical indicators and tools used to analyse stock price trends and likely price movements are also used to analyse Bitcoin and altcoin stock price trends and likely price movements. Look no further than the CoinMarket Cap and Coinbase sites.

Whilst this is not investment advice, however readers who are interested to further understand the technical indicators mentioned in the above paragraph may want to follow the daily You Tube videos on Bitcoin and altcoin price trends and likely future price movements by professional trader Crypto Kirby.

Bitcoin price analysis on 2019-02021 – courtesy Crypto Kirby You Tube channel

Once again we emphasise that the above is not investment advice but only for readers’ knowledge and that neither this writer nor Enterprise Trade Views suggests that readers invest or not invest in Bitcoin or altcoins.

If readers choose to invest, they do so at their own risk, as the prices of Bitcoin and altcoins are highly volatile, being largely driven by market sentiment and have been observed to be subject to suspected manipulation by the “big boys” a.k.a. “whales”.

This is because unlike listed companies’ share prices, market prices of commodities or the exchange rates of national currencies (despite being fiat), the prices Bitcoin and most altcoins lack strong underlying fundamentals, such as revenue and profit track record, expectations of future profitability, expectations of future demand for commodities, the health of national economies and so forth, which ensure likely continued market demand for them and a greater likelihood of medium or long term share price, commodity price or currency exchange rate appreciation, despite short term fluctuations driven by speculative buy and sell forces acting upon prices and exchange rates.

Heading for a crypto bust?

This does not mean that the prices of Bitcoin and some altcoins may not rise to respectable levels again and provide respectable returns for investors, or that investor and speculator enthusiasm for them has petered out.

After all, a few of those Internet startups such as Amazon.com, Uber, Grab, Airbnb, independent bloggers and so forth did manage to undermine “establishment” retail stores, taxi companies, hotels, news media, music publishers and so forth, however a handful startup social media sites, including and video hosting startups, as well as startup search portals back in the 1990s and 2000s have grown into giant corporations dominating cyberspace today, whilst most have fallen by the wayside.

Likewise, this writer expects that like the massive dotcom shakeout and consolidation of 2000 – a.k.a. the “dotcom bust”, the several thousand listed cryptocurrencies out there are heading for a “crypto bust”, with the weaker ones dropping out, leaving a handful of the more well established and popular ones including Bitcoin filling the void left behind and grow to dominate “cryptospace”.

Already today, many content creators hosted free-of-charge on these giant social media sites are complaining about how these sites are now censoring and even excluding creators of content deemed “inappropriate” or “fake” from their sites, whilst such content creators, not having signed any binding contract or agreement with their host, have no legal recourse against being restricted or evicted. He who hosts creators’ content for free calls the tune.

If that’s anything to go by, and if indeed, a handful of remaining cryptocurrencies grow to dominate “cryptospace”, we may well hear complaints about their market power and dominance.

Already, Bitcoin and altcoins which were conceived to challenge the financial “establishment”, have now become de-facto, part of that “establishment”, to use that old hippie term.

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