Bitcoin is Absurd, Part I: Volcano Mining and the Banana Republic
An ongoing series exploring a sovereign future, the politics of bitcoin, and the absurdity thereof
Barely more than two weeks ago I listened live along with more than 20,000 others to President Nayib Bukele of El Salvador and his brother/campaign manager Karim discuss their country’s decision to officially make bitcoin legal tender. Celebrities, billionaires, developers, intellectuals, politicians, and anonymous plebs listened in while the president answered questions from people that had the niche expertise to know exactly what to ask and what to go on impassioned rants about.
It was living history on what was essentially a giant Twitter-enabled conference call. Those listening heard the floor debate in the background and cheers ringing out when the legislation passed with overwhelming support. As curious yankee bitcoiners peppered him with questions, Karim Bukele was overwhelmed with the moment. The good and the bad, the opened possibilities for the people of El Salvador and the known-unknowns of an anticipated international reaction. The very real life consequences of adopting open-source code designed by crypto-anarchists as money.
El Salvador is a country that’s seen extremely difficult and violent times for several decades, now add to that the crises of 2020 and the pandemic. When President Bukele spoke about bitcoin, he didn’t talk about the price. He contrasted the dystopic vision of the future young Salvadorans (plus many nihilistic millennials and zoomers worldwide) believe will be manifested — a precarious future of decline, climate catastrophe, migration, war, and poverty — with a hopeful vision of a prosperous El Salvador built on the Bitcoin Network.
A nation-state legalized, embraced, and mandated bitcoin as currency alongside the US Dollar. Legislation is also planned promising permanent residency to anyone that invests 3 bitcoin in El Salvador. There will be no capital gains tax on bitcoin, and no property tax. Existing debts can be paid in bitcoin. Utilizing the Lightning Network bitcoin will see its potential as a true medium-of-exchange and unit-of-account. To pull it all together into a perfect meme sent from heaven, work is already beginning on infrastructure to use El Salvador’s plentiful, 100% renewable geothermal energy from volcanoes for bitcoin mining. Elon can STFU.
This is the opening shot of a Bitcoin Revolution. Or, that’s at least how the revolutionaries see it.
That sounds absolutely absurd. Maybe the whole crypto thing is just a curiosity not worth any further thought. A corrupt wanna-be Pinochet in a small, insignificant country using magic internet money to launder cash for local El Chapos and corrupt politicians. The tulip-bubble-ponzi found it’s next victims. Sure, some people got rich buying this thing while nearly everyone around them said they were an idiot. They got lucky™. But really though, the idea that bitcoin can be a world reserve currency is insane. Bitcoin definitely is not the spark for revolution on the scale of the Renaissance, the French Revolution or the Industrial Revolution. It’s a scam and all these dumb people who bought into it will learn a painful lesson, tbh they deserve it for being so dumb.
The *idea* of bitcoin. The existential question: *What is bitcoin?*. What do *you* think bitcoin is? What does its existence *mean* for the world? For you and your family? For your neighbors and community? Because whatever diverse and contradictory answers individuals may have for those questions, there is at least one answer that everyone agrees on. Bitcoin exists, and there will only ever be 21 million.
Any idea is meaningless without human beings acting out its consequences in real life. Essentially all ideas are based on an *absurdity*, on meaningless ideals in some poor soul’s head, passed on generation-to-generation, peer-to-peer as our ancestors taught us. Ideologies — systems of ideas — are the *highest form of absurdity*. As clearly evidenced by the entire history of Church and State from the Oracle of Delphi to Donald Trump, from the Inquisition to the Gulag Archipelago.
Revolution is absurd, right up until the moment it happens. A true revolution is a paradigm shift in ideology, a change in the ideas which shape how human beings assign meaning to the situation we all find ourselves in. With this, social structures are shaken to the ground and rebuilt in entirely new forms, or left to deteriorate and crumble. States are overthrown, reorganized, and founded. Power is reshuffled and wealth redistributed among ethnicities, classes, and cliques. Kings lose their heads. Mobs lose their minds. The daily life of the common plebian is forever changed by a new sovereignty, and the old way of looking at the world no longer makes any sense. The old way falls back into total absurdity.
Bitcoin is absurd, right up until the moment of hyperbitcoinization. Bitcoin is meaningless without the involvement of people and the social consequences it has in the real world. It’s often said that bitcoin is a religion and its supporters cult members. But a word that is more fitting is *ideology*. Bitcoin is an ideology still in its childhood, and the infamous toxic behavior of plebs resembles radical political activism as much as fundamentalist religion. For millions of millennials around the world bitcoin is an attractive ideology at that. Just so happens one of those millennials is the popular young president of a small yet politically significant country to US interests.
20th-century ideology has grown stale and discredited with nothing to offer the world.
Consider the alternatives. The previous century was dominated by warring ideologies: capitalism, socialism, and nationalism. Old World Empires collapsed world-wide. Dozens of new nation-states were born. Two massive World Wars left the European continent a pile of bloody rubble. Multiple genocides happened at unprecedented speed and scale. Violent revolutions and civil wars shook the world. Hundreds-of-millions died.
When the Berlin Wall fell, the end of history was declared with capitalism triumphant. Time continued to progress anyway. Socialism maintained a precarious-but-real position as ideological opposition to Pax Americana, notably in community activism, academic institutions, and importantly, Latin American countries. Nationalism and traditional religious movements claimed space in the abandoned working classes and many former Soviet bloc countries. As regional conflict, migration, economic inequality, and financial crises escalated in the new millennium, reactionaries reacted and varying degrees of what could be categorized as neo-fascism reappeared.
Salvadoran history is filled with neo-liberal military dictatorships, communist guerrillas, right-wing death-squads, and corrupt politicians. It’s a microcosm of 20th-century ideological conflict. On top of that, El Salvador also exemplifies major challenges of the 21st-century: the continued sociopolitical reckoning of decolonization, globalization, mass migration, lack of opportunity, climate instability, economic inequality, and access to technologically-enabled abundance.
El Salvador’s sudden move to make bitcoin legal tender might be the seed that grows into a major ideological camp in global politics. A new frame-of-reference to measure the world against and try to make sense out of it. A world in which the battles of capitalism and socialism are transcended by a competing system built on Bitcoin. A system providing historically unique property rights, capabilities, and power to the individual as well as communities alienated by centuries of colonization and imperialism. And doing so while at the same time strengthening the hard fought gains of the Enlightenment currently under attack from the radical Left and Right.
If bitcoin is hope it needs to prove it in the developing world, not on Wall Street.
Creating new property rights that do not require a State to enforce is a revolutionary act. What impact such a revolution can have on politics, economics, and the daily lives of people is to be determined. Developing nations around the world will be watching to see if the Bitcoin experiment in El Salvador is successful. If it is, a spark may well be lit that leads to an upending of the financial system as we all know it. Bitcoin domino theory.
Nothing about the future can be predicted with certainty. Just like the price of bitcoin, revolutions are unpredictable and volatile events with drastic moves in all directions. When revolutions happen it’s often the revolutionaries themselves that are most surprised where, when, why, and how the spark is lit. And how far things go.
In 1789, Maximilien Robespierre was a 31-year-old provincial lawyer that carried a copy of The Social Contract by Jean-Jacques Rousseau with him at all times. He was vocally against the death penalty and supported a constitutional monarchy. As a 36-year-old kingslayer in 1794, he declared “Terror is the Order of the Day” executing his political opposition on both the Left and Right, chopping heads off counter-revolutionaries by the tens-of-thousands, and was finally shot in the face and met Madame la Guillotine as a tyrant. The tipping point was not the blood-drenched streets of Paris or the quarter-million dead in the Vendée. It was the absurdity of the Festival of the Supreme Being.
If events such as the Fall of Robespierre seem far outside the possibilities of magic internet money, consider the impacts of a protocol that Bitcoin is often compared to: the internet itself. Only a decade ago the Arab Spring began and the concept of the ‘Twitter Revolution’ was born. Protests raged, regimes fell, and civil wars ignited as images of rebellion were liked, shared, and retweeted. Social media disrupted the status quo. The social media of money, Bitcoin, could have impacts just as profound.
It wasn’t only dank memes that rocked the Arab world. Still in the wake of the 2008 financial crisis, food prices in the region were rising fast. The spark was lit when a Tunisian street vendor set himself on fire in a suicidal act of desperation against petty local corruption destroying his business. Social media and the internet gave regular people new power to organize and change their circumstances. Within months, decades-old authoritarian regimes were overthrown.
In a similar way, a Bitcoin Revolution will be shaped by the new power available to the individual and the circumstances it exists in. Instead of rising food prices, it could be inflation. Instead of a crisis in mortgage-backed securities, it could be a war in Taiwan or Ukraine. Or a global pandemic. Circumstances in some countries will lead to attempts to ban, criminalize, and control. Other countries will make another choice.
El Salvador chose to embrace the Bitcoin whirlwind. And others will follow.
The reason this series is titled ‘Bitcoin is Absurd’ is simply that the idea of Bitcoin becoming a world reserve currency seems ridiculous, fanciful, and totally absurd. Certainly not something to be thought-out and debated as a inevitable outcome. Writing tomes on the revolutionary political implications of magic internet money could turn out to be a meaningless waste-of-time based on pure Moonism. That doubt will persist until the very last moment before a Bitcoin Revolution. Then it will just be common sense.
Post-World War I & II philosophy hit a giant brick wall of nihilism and despair that made Nietzsche seem downright optimistic. The Great Wars revealed any appeals to civilized behavior and human progress as illusory. Then another revelation: ‘On the Cult of Personality and Its Consequences’, a speech by Soviet Premier Nikita Khrushchev denouncing Stalin and his regime of Terror.
For many intellectuals, philosophers, revolutionaries, and idealists in the first half of the 20th century, a glimpse of hope existed in socialism and the Russian Revolution. Tales of repression, starvation, show trials, and concentration camps were easily brushed aside as imperialist propaganda until Khrushchev’s not-so-secret speech. The illusion of a worker’s paradise became a nightmare, and the last ideological hope for an idealist concerned with the truth was exposed as a fraud. Everything people could believe in was exposed for the absurdity it was.
One of those disillusioned intellectuals fought in the French Resistance against the Nazis and subsequently became famous writer. Albert Camus thought long and hard about his experiences during the War and watched as the Soviet Union was exposed. His conclusion: life is absurd and if any meaning exists, it’s clearest manifestation is the rebel. A rebel who decides they will no longer accept the conditions of their life and creates meaning in the act of rebellion itself. The individual rebel not only acts in defense of their own human dignity, but implicitly for the dignity of all people.
Bitcoin may be absurd but it is also an act of rebellion against the global monetary system. It is already the decentralized central bank of the internet, and in less than 3 months it will also be legal tender in a sovereign nation. During the Twitter Spaces with President Bukele, he responded to a question about criminals using bitcoin and said: “Weapons are bought in US dollars right now. Money laundering is done in US Dollars. The drug cartels use US Dollars.”
The contrast could not be greater. In President Bukele’s mind the US dollar is the worn-out, violent status quo and Bitcoin is a tool to create a new path forward for the country he leads. A rebellious push through the decades of tragedy that have befallen El Salvador. A counter-narrative to the dystopic future many young Salvadorans accept as inevitable. Life is absurd, no matter the narrative. Camus saw that and chose to rebel, because rebellion in the face of oppression is the only real choice. President Bukele, whether he knows it or not, chose to rebel and brought a nation along with him.