Hope, reality and compromise

photo by Paul Csogi on Unsplash
photo by Paul Csogi on Unsplash

“Governments derive their just powers from the consent of the governed. You have neither solicited nor received ours. We did not invite you. You do not know us, nor do you know our world. Cyberspace does not lie within your borders.”

John Perry Barlow’s strong words echoed through the caverns of young minds high on the possibility of borderless connection. They spoke to the eternal desire for a better world, and dangled the tasty promise of empowerment.

The honeymoon was brief. We ended up finding out that, yes, the internet can be regulated. Yes, it can be centralised. And yes, the hierarchy that we hoped it would overthrow is still in control, just with different faces.

We heard similar anthems when bitcoin emerged. “Bitcoin will change everything”. “The end of the tyranny of bankers”. “Bitcoin is the currency of resistance”. And so on.

Will the same thing happen?

It already is. Bitcoin’s disruptive potential is getting channelled into a structure remarkably similar to the pre-existing one. Exchanges are becoming more and more like banks, storing our bitcoins, lending them out and collecting information. A handful are accumulating increasing amounts of clout, becoming the new “financial giants”. The promised independence and anonymity is being subsumed by, yes, the regulators, who insist on user identification. On- and off-ramps – recognizing that, on the whole, they need official permission to exist – are complying.

While this is disappointing to those of us to fell in love with the concept because it showed us a glimpse of a new structure for society (which of course would solve all of our current problems), it is not a bad thing.

To see why, let’s go back to Barlow:

“Your legal concepts of property, expression, identity, movement, and context do not apply to us. They are all based on matter, and there is no matter here.”

With affection and respect, this is one of many instances in the declaration which is factually incorrect. The internet runs on wires and nodes and packet switchers – “matter”. There is plenty of matter here. Just as your mind needs your body to carry it around, internet – and free exchange of information – relies on the physical world to make it work. Ideas may be slippery, but their flow can be influenced.

And anyway, regulation has never been based exclusively on “matter”.

We have seen that rules can divert the original intention of free communication (in both the “free beer” and “no limits” sense). Some areas can restrict what is accessed. Others enact policies that give bandwidth preference to more powerful websites. And a growing cohort of regulators is insisting on strict controls over the data that websites can collect. The next step is to influence business models.

Wait, how is this a good thing?

I’m not saying that restrictions are good. They can stifle innovation and communication, holding back the progress of ideas. They can also lead to direct oppression.

But, rules also protect us. And in so doing, they relieve us of the need to spend most of our energy worrying about defence, giving us freedom to pursue life, liberty and happiness.

How much regulation is ideal? That is the eternal political debate – and I doubt there is a “right” answer to that question. Most societies, communities and organisations struggle with the balance between not enough and too much centralised control. Most individuals, too (myself included) – poke away at someone’s personal map of their “natural rights”, and you uncover a nest of confusion and contradiction.

What is a good thing is the awakening – at “mainstream level” – of constructive questions around governance and freedom. This could lead to a broader acceptance that the answers are not clear cut.

How far should regulatory reach extend? How much power do we have to resist? What price are we willing to pay? What do we want, and where will we compromise? What works?

While bitcoin was created to circumvent the influence of the centralised financial system, it is slowly being absorbed… perhaps not by the establishment, but by one that looks like it. And with banks increasingly sniffing around and tentatively dipping their corporate toes in disruptive waters, the new bitcoin finance world and the pre-existing one may end up merging.

The end of the libertarian dream? Probably.

And that may end up being bitcoin’s biggest victory. When even blue-chip representatives of the “old order” give it a veneer of respectability, it moves closer to mainstream recognition. When growth and increased scrutiny of new participants bring a welcome degree of professionalism to the services that are necessary for its use, it comes closer to realising its initial ambition of being a “world currency”.

Just not as a borderless substitute for fiat currencies. Again, that’s not a bad thing. Compromise is not conceding to the enemy. It’s a step forward, from which the battle against oppression and inequality can continue to be fought.

As we have seen with gunpowder, radio waves and the internet, a powerful technology rarely ends up being used for its initial intention. Bitcoin is already heading the same way.

And by leaving its original idealised constraints and taking on a form different from the original purpose, bitcoin underlines the freedom of ideas. Even core constituents have been unable to control the evolution of its acceptance and use. Is the establishment smothering it, or giving it life? A bit of both? And was that not inevitable?

In that, John Perry Barlow was right:

“We cannot separate the air that chokes from the air upon which wings beat.”

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