Bitcoin’s Path. From Insurgents to Tool of Big Tech in a Few Years

Blockchain technology was designed to thwart big institutions. Now the likes of Facebook and Twitter are co-opting it.

Initially, you did not even need a pickax. The first Prospectors of the California gold rush ventured to the Sierra foothills as a solo traveler, splashing out streams in search of nuggets dislodged from the present. That, at least, is the prevailing picture: The person renegade who headed west to hit it rich by his own initiative. But soon there were too many prospectors and also little simple gold. The job became more resource-intensive, requiring water to blast from the hills. That meant dimensions and scale, to create aqueducts and pipes out of reach to all, but a couple. 

I thought of the history whilst reporting this month on the alleged pyramid scheme between the digital gold rush of the 2010s, where individuals were sold on the idea that mining bitcoin was a way to self won bounty. Early in this decade, had I possessed the foresight, I could have set up my home computer as a bitcoin miner and reaped rewards. The key was openness. Bitcoin wasn’t worth all of that much then, but anyone could do it. The underlying technology, blockchain, seemed to make sure of this, by eliminating the need for intermediaries. The stage would maintain our independence, our nation of decentralization. 

Then bitcoin went the method of gold. Why?. Since it started making people wealthy. With more miners mining becoming more expensive. Demand for electricity meant you needed longer efficient servers to give a profit and, soon, savings of scale. Corporations took an interest. Today mining farms are an enormous, government business. Bitcoin became a fiscal tool. The banks invested, with the pension funds. The Commodity Futures Trading Commission announced it a commodity, exactly. How do you get bitcoin these days? . Once I purchased a very small fraction of one bitcoin the other day, following Years of stubborn resistance, I did it via a favorite investing application that sells my information to hedge funds who utilize it to better inform their bets. 

Governments can track Bitcoin transactions easily, which means you cannot even use it to get political dissent or offense. But the myth endures. The concept is that bitcoin, by virtue of its technical underpinnings, is something that sits outside of our planet, a tool for individuals left from the system. That, at least, was the pitch of the pyramid scheme scammers, that preyed on vulnerable individuals with the concept that shares in a bitcoin mining operation would save them when the traditional financial system couldn’t. Many were taken in by this assurance. So Bitcoin has strayed a bit from its cypherpunk origins. 

But not blockchain, right? The underlying platform offers a Platonic kind of decentralization, the cryptographic guarantee of trusting no one, of shrugging off authority. It looked like the perfect remedy on the centralized internet, a weapon of war against Large Tech.

This year, Large Tech made its move to blockchain, in what might looks like a hostile takeover. It had been convenient, as our national conversation moved, threateningly, to antitrust and solitude. Previously Twitter announced this month that it is decentralizing, with blockchain, despite long ignoring a shouts of individuals asking it to do just that. Critics noted that more private tweeting would help it dodge concerns about content moderation. Facebook has developed a cryptocurrency, Libra, which it claims it does not control, but that will entrench its power. That move helped spark China to quicken its own drive into electronic currency, which would become a surveillance tool. 

It is uncertain what role blockchain will play in that endeavor, but whatever the case, Xi Jinping is trumpeting investments in the technology for other purposes. The co opting of blockchain, its inevitable centralization, shouldn’t have come as a surprise. It is a lesson we have learned over and over again! We bestow our social values upon technology, not the other way around. We have been through this before. Take the World Wide Web. First came the guarantee that it’d unlock knowledge and make us free until a dictator cuts the cord and businesses monitor and control our behavior. To get blockchain, using words such as decentralization, and self sovereignty doesn’t simply make it. 

This take work: protections for privacy and security, assurances that networks operate as planned. Like the internet, that does not signify the initial expectation and promises were false, we were only blind, at first, to alternate interpretations, to manipulations of ideals. I might be underselling the effect of blockchain, the subtle nudge at least that technology could be better for users, a reminder of what the early net guaranteed. For most users of blockchain at the moment, decentralization might be understood as a collaboration between suspicious business partners. That is not, I imagine, what Satoshi intended. But maybe technology will allow Twitter and Facebook and Goldman Sachs to adopt at least a few ideas on willingness, the belief in the power of the individual user. How that plays out will probably be the story to see in the 2020 s.