You Know Forking Critique: Alternative Cryptocurrencies 2021

Hi Friends, 

You can see One phenomenon within the cryptocurrency space is the use of the underlying source code of Bitcoin to create alternative cryptocurrencies—or alt-coins—with slightly different characteristics to Bitcoin (Ong et al. 2015). While some of these “forks”21 have been opportunistic attempts to make speculative profits, others are explicitly designed to address problems the designers see in Bitcoin, and thus often embed critiques of the Bitcoin model. 

 

For example, Freicoin22 was an attempt to deal with the tendency for people to hoard bitcoins by introducing deliberate inflation (via “demurrage”) into the system. Others have less intensive mining processes, or have explicitly attempted to build a different culture around their currency, as in the playful non-competitive culture of Dogecoin. 23 Regardless of these alterations, cryptocurrencies in general have become associated with free-market thought. 

In particular, they have become associated with the hyper individualism of conservative libertarian ism, some adherents of which see cryptocurrency as a more efficient means to facilitate trade within a pure capitalist model (Golumbia 2015). Such champions of cryptocurrency may argue that the financial sector rips off customers, but rather than viewing this as a normal feature of profit-driven business within a naturally political marketplace (constructed over time in incremental fashion by politicized human institutions), the problem is often seen to be the infringement of the political into an imagined apolitical (and ahistorical) realm of the market: banks are abusive because they are too intertwined with the political system, which stymies the workings of what would otherwise be a neutral free-market. 

The way to solve this is thus to disintermediate them via apolitical cryptocurrency technology. To those with a more left-wing libertarian impulse, though, cryptocurrency is interesting because it has features that potentially allow for non-hierarchal self-organization and peer-to-peer collaboration within a communitarian network structure. There are thus emergent attempts to build cryptocurrencies that can be used as a means of exchange for explicitly cooperative and collaborative enterprises that exist outside the logic of normal market processes (see De Filippi 2015). One example of this is Faircoin, 24 spearheaded by Fair.Coop, an initiative started by Spanish activist Enric Duran. The project is still at an early stage, but Fair.

Coop is seeking to establish Faircoin as a global cryptocurrency to be used for transfers among a global cooperative network. Once established, it is believed that the global currency can also be used as the backing for more local mutual credit systems. As a hypothetical example, imagine a commune in Barcelona sending Faircoin tokens in solidarity to a farmer’s cooperative in Moldova, who in turn can use that as the basis for a more local mutual credit system to help individual farmers within the cooperative. 

In seeking to utilize cryptocurrency technology outside of a capitalist model, Faircoin is explicitly aligned with principles found within left-wing anarchism and autonomism. It has a much stronger focus on collaborative solidarity and autonomist self-governance, viewing equality and redistribution as more important than rigid protection of historical property rights. 

Such an approach runs contrary to many financial inclusion narratives that suggest that economic inequality is due to external factors that stymie the efficient workings of markets, thereby creating market failures. For example, market-based approaches may identify poorly defined property titles as a cause of market exclusion, and therefore of poverty. The financial inclusion practitioner operating within this framework may seek to rectify that, in order to extend market systems into areas where they do not currently operate well. The theory is that this will give individuals within that situation a better chance of competing within the normal market. 

A project like Faircoin, on the other hand, starts from the assumption that, while formal market systems may be a source of economic growth and individual enhancement, they are simultaneously the source of social inequality, individual alienation and community disintegration. Thus, rather than trying to find narrow solutions to individual hardship, initiatives like Faircoin seek to create alternative economic systems that bypass normal markets, and that rewrite the deep level rules of economic engagement. In particular they place heavy emphasis on the basis of economic life being mutual cooperation and solidarity, rather than individual competition for narrow economic success. What makes the cryptocurrency element of this interesting, is that—traditionally— autonomist communities have often retreated to small-scale localism as a means to foster close human relationships. 

The vision of projects like Faircoin, on the other hand, is to build large-scale networks of solidarity-based collaboration using technology. It is in potentially enabling such “collaboration at scale” that cryptocurrency technology begins to look like a force for radical economic alternatives.