Crypto as a Democratizing Force
As much as one might be loath to dwell on the carnage of the 2008 financial crisis, its lessons cannot, or at least should not be ignored. The tyrannical reign of the big banks looms like the sword of Damocles over the heads of American taxpayers, ready to fall at any moment, simultaneously crippling the everyman’s life and asking him for an incalculable bailout.
Centralized control of markets and the proliferation of ever expanding abstractions of those markets into derivatives have left the modern retail investor at the mercy of a small number of market makers. To speak of an invisible hand that divines the optimal distribution of market resources is to appeal to a fictional abstraction that serves only those who benefit from the control of that hand. Much has been said about shortsighted libertarian philosophies that abound in the crypto space, but in reality these ideologies do little more than undergird large corporate interests as the most important facet of the modern social structure. Yet little to nothing has been said about the inherent social, political, and obvious economic value that inheres in decentralized financial modes that have given new life and meaning to Adam Smith’s most famous metaphor.
The world of digital assets has become radically illuminated in the past year or so and us crypto evangelists should welcome and praise this illumination. As many people have begun for the first time to earnestly inquire about Bitcoin, Ethereum, and all of the various DeFi projects that we use on a daily basis, the community we have built has (or at least should) become something different — a movement, a crypto-demos.
More important than speedy transactions, the elimination of clearinghouse intermediaries, and unimpeachable ledgers, is the decentralized democracy that cryptocurrencies/digital assets have brought to the retail investor. The central philosophical animus that should drive the adoption of crypto on a large scale is its potential to wrest control of the global economy away from those few market makers who seek only to drive it in their favored direction without a thought given to those of us who may or may not benefit from their preferences.
Wall Street bankers, hedge fund managers, and traders often think of themselves as the “masters of the universe,” and given this piece’s acknowledgement of their market making capacities, there is a sense in which that moniker rings true. However, in the words of The Blow Monkeys, “it doesn’t have to be this way.”
For those of you that are new to the vast and sometimes incomprehensible world of crypto, I ask that you answer the often heard quip that “crypto isn’t backed by anything” with the truth that “crypto is backed by the people, it is made by the people, and it is made for the people.” Whenever you spend fifty dollars on Bitcoin, or some new altcoin that piqued your interest, you should envision each one of those dollars as a vote for a new economic hierarchy that is independent of centralized control and top down hegemony. Crypto assets are censorship resistant tools that have the power to democratize the globe in a manner that has never before been experienced — investment in crypto is investment in global financial democracy.
One can find a multitude of articles and literature about cybersecurity, privacy, and the social value inherent in the structural support of both (think of the fallacy in the dystopian statement that “you have nothing to fear if you have nothing to hide” — we all have something to hide). Similarly, much has been said about the politico-economic value of crypto as a powerful force for supporting privacy in a world that is wrought with invasions of privacy. One only has to look at entities like the NSA, the FISA courts, and the market for bulk metadata transactions to understand how pervasive threats to personal privacy are.
Rather than anchor crypto philosophy in a node of personal Internet privacy, this work can and should be grounded in a direct appeal to crypto as the most powerful democratizing force in the modern world. As more and more people wade into a space that is still relatively niche, it is important that there be a set of principles or values to which itinerant newcomers can adhere. I submit that at least one of those principles or values should be democracy.
