Bitcoin: Alchemy, saving grace,…or just more of the same?

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I wrote this piece as the issue of Bitcoin, or rather the ‘modern-day alchemy’ that is Bitcoin, has been bothering me lately. This piece was expanded from a post I made on my Facebook account, essentially a lot of unanswered questions, on 20th January 2018 following a sudden upsurge in spam I was receiving on Twitter related to a particular bitcoin account. I haven’t been aware of any other IR (i.e. feminist IPE particularly) takes or research on this…I think this silence is quite worrying. As is the limited awareness or questioning of what Bitcoin actually is…so, lets consider it here.

As this is a money-related post, it would be remiss of me not to remind you of the precarious financial situation PhDs/ECRs and often women and minority-identifying scholars are almost always in – within the neoliberal higher education framework. I would certainly count myself in that embarrassingly vast number…so please, if you can contribute and you appreciated the work and writing here…don’t forget to #TipYourWaitress !


How to Get Rich Quick: the unexpected lessons of Dave Fishwick’s show are in the art of being extremely frugal. Photograph: Channel4

Full disclosure: I know nothing about ‘bitcoin’, even less about ‘blockchain’, and I wouldn’t know a ‘crypto-currency’ if it slapped me around the face with a dead fish, whilst doing Numfar’s ‘Dance of Joy’!

I know so little about crypto-currency, that I genuinely thought (until prepping with minor research for this post) that Bitcoin was the only one we had to worry about…if like me, you know next to nothing about this intangible digital coinage, it may concern you to hear it is not the only one on the open marketplace. I bring you news of ‘Ethereum’, something which sounds like a club drug from the 90s or the Matrix film franchise…


“Ethereum operates differently from Bitcoin in the sense that it’s not confined to a set number of coins, it’s set to a pace of coin production.

So while it isn’t quite like Bitcoin in the sense that there’s a finite number of coins –it isn’t like the Federal Reserve Bank where they have a license to print any amount of US currency they wish. This ensures that it retains value to some extent in a deflationary way. However, it will likely not be as deflationary as Bitcoin. It’s like a more controlled version of the US dollar –what the US dollar probably should have remained as, before they untied it from Gold.” – (Hulleman, 2017)

Bitcoin & Blockchain – explained by IBM:

Blockchains operate on a ‘database’. There is also something called ‘Litecoin’ – which is apparently considered the ‘silver’ to bitcoin (‘gold’).

Though much of my past work and research has been concerned with the feminist IPE critique of the structural violence(s) inherent in the global capitalist (neoliberal…) system, I have thus far been quite uninterested in the ‘goings on’ of the dark web cryptocurrencies and the ‘anarcho-tech’ or ‘hacktivist’ community. Then, in January this year, I was randomly ‘followed’ by a somewhat dubious and vague looking Twitter account, so I took a look out of curiosity…

“Bitcoin, and the world of cryptocurrency, is a boys’ club, say some experts, and that should be cause for concern.

Cryptocurrency is a form of digital currency traded between people or used to purchase goods outside of banks or government regulation — that’s part of what makes it risky. Figuring out exactly who is putting money into this kind of asset is difficult because part of the attraction of investing in the crypto realm is the assurance of anonymity.” – CBC News

Essentially, if I’m understanding this correctly, our global capitalist economic system allows for an alternative ‘crypto-currency’ economy to exist whereby it’s business is simply to turn nothing i.e. the total absence of something (on this site it mentions ‘poverty’ and ‘dead capital’) into something (the crypto-currency) which can be used as capital…what alchemy is this!?

Sound familiar…?
As a feminist political economist and critical scholar, I have many questions, “Your Starter for Ten“:
1) Why, and for whose benefit?

“In the curious case of JP Morgan, the CEO has publicly professed Bitcoin to be a bad investment (read: fraud) while his company has been helping clients invest in the cryptocurrency at a lower price due to the bad publicity their CEO is creating. Other firms are crying foul, and some groups have even filed lawsuits over their practice. Yes, this is the same JP Morgan which played a major part in the 2008 financial crisis, and we can only hope their comeuppance is drawing closer.
China is also taking part in the fear, uncertainty, or doubt (FUD) with almost weekly up and down claims that range from government adoption and regulation to making cryptocurrency exchange illegal for individuals. It’s safe to assume governmental bodies will be testing the boundaries of cryptocurrency –or just kicking its tires, for some time to come.” – (Hulleman, 2017)

2) Who holds the authority to declare nothing something, in this context?

Example: What is to stop me, or any other ‘peddler of nothing’, from seeking to engage in Bitcoin or related financial transactions and turning myself into a trillionaire?

“Making money off Bitcoin speculation is the ultimate libertarian wet dream because you can get fantastically rich without producing anything useful for society.” – Existential Comics, FB Post, Jan 2018

3) If it is an ‘alternative’ economy, surely that means it’s supposed to be an alternative to the patriarchal and hierarchical capitalist economy (and infrastructure: banks, etc.)?

“On the one hand, blockchains empower civil society organizations like charities, individual migrants, and a range of ‘disruptive’ new market actors such as cryptocurrency exchanges. On the other hand, blockchains can also further empower central banks as well as a tech-savvy and largely male transnational elite whose expert knowledge and technological skills enable them to exercise decision-making power as key ‘insiders’ in what appear to be novel governance processes.” (Campbell-Verduyn, 2018)

So I come back to that ‘authority’ issue…and add… it’s also dominated by men!

There was a recent article which said women have tended to avoid the instability of Bitcoin and related economies – so how exactly is this ‘alternative’…

4) Alternative for who?

An alternative, higher risk, faux-economy of ‘nothing’ – for the capitalist who has it all, and isn’t getting enough fly-by-the-seat-of-your-pants risk from our traditional global economy…?

“The most comprehensive study on gender and the stock market shows that women who invest — whether their own money or on behalf of an organization — take a more cautious approach but tend to outperform their male peers in the long run.” – CBC News

5) Is this ‘hyper-risk’, in fact, not for the capitalist – but an attempt at overthrowing the orthodox system, by forcing a ‘mega-crash’ as a result of the increased insecurity/instability of the crypto-currency market (within the ‘host’ neoliberal, capitalist open market)…?

A recent New Scientist article would suggest this attempt to ‘reinvent money’ has already been quite troublesome, resulting in a ‘civil war’ in the world of tech finance.

I know our own (UK at least) printed paper money has that small print about legal tender, that it is essentially an IOU from the bank on behalf of the person, as money replaced the previous ‘barter and trade’ economy in Britain (pre-capitalism); so technically the argument could be made that money is essentially the pre-tech version of blockchain stuff. However, this is usually attached to physical forms of capital i.e. a house, a car etc – so if one defaults on ‘repayment’ (or the follow through from banks on your ‘promisory notes’) then there is recourse for your debtor; but, if crypto-currency is literally nothing besides 1s and 0s on a screen, then…what happens when a ‘peddler of nothing’ defaults? Or when it gets hacked and deleted? Why isn’t hacking irrelevant, if it amounts to hacking nothing? Philosophically, I am confused…🤔

6) How is this economy considered acceptable, by vendors, post-2008 crash and banking crisis when it appears even less secure than all that immoral risk taking and ‘nothingness’ trading? Profiting off the nothingness of the poor and then making them poorer…this story is way too familiar…how can there still be societal and moral outrage about the banks, the establishment, neoliberalist economics etc., but almost no acknowledgement of this thriving, or at least still existent higher risk nothingness alternative trade, which purports to democratize finance…?

Lest we forget, 1987 – not only notable as the year I was born – but also notable for a major global financial crash…

“As the years roll by, it becomes ever clearer that the collapse of Lehman Brothers in September 2008 was not a cathartic event. The sub-prime mortgage crisis was supposed to be the bubble of all bubbles, yet here we are 10 years later watching speculators pile in and out of bitcoin. In two years it will be the 300th anniversary of the South Sea bubble. History has a strange way of repeating itself.
Speculation has thrived in recent years because central banks pumped money into the financial system through record-low interest rates and quantitative easing. This prevented the banks from going bust and ensured that the recession of 2008-09 was not as severe as the Great Depression of the 1930s, but at a cost.
Markets now think that if they act irresponsibly and cause another speculative boom-bust the response from central banks will be zero – or negative – interest rates and another splurge of QE. The monetary authorities have created a huge moral hazard problem for themselves.
Central banks did enough in 2008-09 to prevent the collapse of capitalism. The coming period will show whether that breathing space was used to make good the structural weaknesses exposed by the crisis: debt dependency, rising inequality, under-investment.” – (Elliott, 2018)

Can anyone explain what is going on here? And are feminist peace economists or feminist political economists in general critiquing this madness yet…if they are, how come I’m not seeing that work?
Crypto-Currency & National Security

So far, I’ve covered gender and the political economy of it all…but as a feminist critical security scholar, ‘security’ is also highly important and cannot be overlooked. Ankit Panda at CFR offers this summary:

Dark web markets. Shortly after its inception, Bitcoin became a popular medium of exchange on so-called dark net marketplaces—highly anonymized online markets for illegal goods and services, primarily narcotics. In 2013, U.S. authorities, including the Federal Bureau of Investigation (FBI) and the Drug Enforcement Administration (DEA), shut down Silk Road, the first and largest dark net marketplace, and arrested its owner, Ross Ulbricht. Tens of thousands of users had bought and sold more than $200 million worth of illegal goods and services on Silk Road, according to investigators. U.S. and European law enforcement agencies have since shut down successors to Silk Road, including AlphaBay and Hansa Market.
Terrorist organizations. The self-proclaimed Islamic State saw the benefits of cryptocurrencies as early as 2014, when it first declared its purported caliphate in Iraq and Syria. In 2015, a Virginia man pleaded guilty to conspiring to provide material support to the Islamic State for attempting to teach others how to use Bitcoin to anonymously fund the terrorist group. Although most of the group’s financing still comes through conventional means, there is anecdotal evidence that the Islamic State has used cryptocurrencies to acquire weapons and pay affiliated fighters for carrying out attacks. Analysts say the group’s use of cryptocurrencies [PDF] has been limited to small transactions.
Criminal groups. Criminal groups, including transnational drug cartels and money launderers, are also keen to leverage cryptocurrencies, according to the DEA’s most recent annual assessment. The report highlights Bitcoin’s popularity as a means for such groups to evade capital controls in China. While these organizations once relied on creative methods to smuggle large amounts of physical cash across borders, in cryptocurrencies they have found a frictionless means of virtually transferring ill-gotten wealth.
Sanctioned states. States including Russia and Venezuela have taken an interest in creating their own cryptocurrencies to circumvent international sanctions. In February 2018, Venezuela became the first national government to debut a digital currency, issuing the first $735 million of a planned $6 billion worth of “petro” coins. Russia has not put a state-backed cryptocurrency into use, but a group of Russian banks has started experimenting with Ethereum technology.

Meanwhile, North Korea has turned to hacking tools such as ransomware to coerce victims to pay it cryptocurrency. Ransomware attacks infect a computer or network [PDF], encrypt its files, and demand that a ransom be paid in cryptocurrency to decrypt them. The most prominent and widely damaging ransomware attack in recent times, the WannaCry worm, was attributed to the North Korean government in late 2017. The law enforcement consortium EUROPOL confirmed that WannaCry was the largest ransomware attack ever, infecting systems in more than 150 countries. The U.S. government did not specify what the attackers gained in ransom payments, but the Bitcoin addresses associated with the attack contained about $150,000 worth of the cryptocurrency by August 2017. An independent damage assessment by a cybersecurity firm estimated that the attacks cost $8 billion worldwide.

North Korea is reportedly also experimenting with other malware-enabled means of raising revenue through cryptocurrencies. In January 2018, a U.S. cybersecurity firm found that hackers in the country were hijacking foreign computers and forcing them to mine Monero, the more anonymous alternative to Bitcoin. (The WannaCry attackers could have traded the Bitcoin gained through the attack for Monero.) North Korea has also sponsored efforts to steal cryptocurrency from investors outright.”

Blockchain & Voting:

“Funnily enough, one of the areas where blockchain technology could make the biggest impact has little to do with business, and much to do with politics: voting. Some think the ledger’s decentralised, tamper-proof nature make it safe enough to allow fraud-free online elections: voters would just get vote tokens and transfer them in order to signal their preference. The idea has already been proposed by Ethereum-powered nonprofit organisation Sovereign, and actually piloted and green-lighted in Estonia – although in the apolitical context of e-voting in corporate shareholder meetings. Even the European parliament devoted a short white paper to assessing blockchain-based electronic voting.

More recently, during a talk in Barcelona, bitcoin developer and anarchist firebrand Amir Taaki proposed using blockchain technology for rerunning the Catalan independence referendum online, a method which, he argued, would neutralise the repression of Spain’s central government.

Adding blockchain to the election process could change the way we think about voting, says Michael Mainelli, director of financial thinktank Z/Yen. For instance, he says, blockchain could allow for “continuous voting” – the casting of voting every week or month – and “transferable voting”. “The idea is that I have a vote but I don’t know enough about a topic, so I give my vote to someone who knows a lot about that, and let them make the choice,” Mainelli says. “Of course, this would also work in corporate governance.”” – (Volpicelli, 2018)

One might wonder what this means in regards to the related issue of big data & militarization addressed here.

So this ‘Wild West’-style high risk, insecure economy is operating for a male elite, but is also dominated by criminal gangs, terrorists, rogue states and sundry threats to the stability of the orthodox system. It uses the poverty and hardship of others as collateral/capital. Yet, Channel 4 in the UK – on a ‘get rich quick‘ series presented by a household name (Dave Fishwick, seen at the top of this post looking like the man from the Monopoly board game) – saw fit to propose this as a viable alternative for everyday folk living off food banks, in an episode which featured a mother and two daughters, no less. Fishwick became famous as a local man opening his own independent bank/lender shop, a ‘hero of the highstreet’. Finance historians are highlighting the problematic nature of this alternative economy, on Reddit forums – the ‘watercooler’ place where all the cool tech-heads hang out. Here you will find folks ruminating on creating a ‘new bank‘. If Gifs are your thing, take a gander at this site focusing on the phenomenon of crypto-currency so-called gurus/snake-oil salesmen. Gurus such as James Altucher. You will see some impressive use of gifs to make the author’s point, such as this:

Due to the Trump Presidency and the growing global instability that that event has brought, Europe now seeks a crypto-currency alternative to the US-Dominated financial system. But we also have the journal ‘Nature‘ publishing an article recently, highlighting the risk of Bitcoin and related Crypto-currency emissions increasing the likelihood of missing our global 2% emissions cap, noting the environmental impact. It is also worth noting, in regards to the ‘gender’ point made above, our current economic system (embodied by Wall Street) is already a nightmare for women. This nightmare is worsening in response to #MeToo, making an already largely male-dominated space less welcoming to women – some have referred to a kind of ‘gender segregation‘.

This sums up the ‘sorcery’ quite well…:

“No longer is the old adage “If it sounds too good to be true, it probably is” reason enough to dismiss such get-rich schemes. Even my potential accomplice admitted cryptocurrencies were sort-of Ponzi schemes, albeit legal ones that many have already successfully played. Bitcoins bought for about $1,000 a year ago are worth over $11,000 today. The recent history of international banking and finance has shown us that as long as people believe something is true for long enough, the lucky, the ruthless and the shameless can earn fortunes. There is a perverse rationality in riding the wave of irrational exuberance – if you know when to jump before it crashes on to the shores of sanity.

And yet I remain reluctant. Maybe this is all just too new and weird for me, and this is really the birth of a world-changing, legitimate sector. But I also feel a desire not to be sucked into a world in which ridiculous sums of money are exchanged by a technological and financial elite while everyone else is eyeing up three-for-two deals in Aldi and wondering how to pay the mortgage, if they are lucky; the rent, if they are less so; for the hostel if they’ve completely lucked out. It is a world in which the connection between cash value and intrinsic value is opaque at best, non-existent at worst.

What’s more, I don’t want to get rich through something that is too good to be sustainably true because, as recent history has also shown, ultimately other people will pay for my Dom Pérignon. The recklessness that led to the last financial crisis is still being paid for through the austerity that has hit ordinary people hardest, while the quantitative easing supposed to solve the crisis has increased the wealth of people who already hold the most assets. When the cryptocurrency bubble bursts, there are no prizes for guessing who’ll pay the heaviest price.

Perhaps my greatest fear is the damage that could be done to what Faust would have called my soul. I felt the hypnotic power of unimaginable wealth and the fear of missing out, and I don’t want to fall under its spell.

Then I realised that all that I wanted to avoid, I was already mixed up with. The awful truth is that many of us have got caught up in the unreal world of speculative finance.

It started back in 1985, when Margaret Thatcher presented a vision of society in which “owning shares is as common as having a car”. Thirty-two years later, the share-dealer mentality has turned more and more of us into speculators. Our houses are not homes but investments. When moving we can’t help worrying about whether we’ll end up winning or losing out. Most renters haven’t rejected the game, they just can’t get at the table. We are also forced to speculate with our pensions, as we are faced with many options, all with different risks. Students dependent on loans have to decide if a university degree is a good investment.

After the last crash, many of us railed against “casino capitalism” but we’re all living in the casino now, feeding the slots while complaining about the brash high-rollers at the roulette wheel. Individuals like me refusing to up my stakes change nothing. Somehow, we’ve got to shut this gambling house down.” – (Baggini, 2017)

We, collectively, deserve better than this – don’t we?

Blockchain doesn’t need more women, it needs more feminists.”

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