Cryptocurrencies have traditionally been driven by libertarians. Now socialists are embracing blockchain as a weapon against capitalist states.
Cryptocurrencies and blockchain have traditionally been the preserve of the libertarian right.
A growing number of socialists see blockchain as the weapon their political movement needs, from helping fund protest movements to avoiding sanctions and increasing government accountability.
To many millennials, Adrian’s sharp turn to the left is recognizable.
After graduating from college, he had student debt and a job he describes as shitty, in addition to working as an Uber driver. “I went deeper into left-wing theory during this period,” says Adrian (because Adrian doesn’t want his radical politics to interfere with his life, he asked that we not use his real name). “But I was also searching for ways to make rent. Which made me have a closer look at stocks and eventually cryptocurrencies.”
As Adrian got hooked on blockchain, a whole new world opened up. “It was a wormhole from there,” he says. “I realized we could automate away the capitalists.”
It’s an idea that a small but growing set of left-wingers are exploring. Cryptocurrencies like Bitcoin, blockchain and the underlying technology have traditionally been the preserve of the libertarian right. Many of the field’s leading figures are libertarians, and some of their economic beliefs are foundational for the community.
Socialists, though, are increasingly embracing the potential of blockchain to assist their political plans. This year Cryptocommunism, a book by French philosopher Mark Alizart, was translated into English. Yanis Varoufakis, the former finance minister of Greece and a left-wing icon, has repeatedly mused about the uses of Bitcoin for the left. The socialist government of Venezuelan President Nicolás Maduro started a botched cryptocurrency experiment in 2018 to evade U.S. sanctions. Adrian himself hosts a podcast about cryptocurrencies and has founded a Reddit community called r/CryptoLeftists.
“Leftists often see blockchain as a libertarian toy that’s only good for buying drugs, which I think is wrong,” says Matthew McKeever, executive associate editor of the academic journal Inquiry and a research assistant at the University of Hong Kong. McKeever doesn’t consider himself a socialist, but he has written about the relation between socialism and blockchain. “The technology has elements that deserve attention from the left,” he says.
With blockchain, you don’t need to depend on a centralized authority.
Adrian, a leftist cryptocurrency enthusiast
Broadly speaking, blockchain could serve socialists in two ways. The narrow option is to use blockchain technologies to better organize. A cryptocurrency might be used to allow money transfers to persecuted activists, similar to how Wikileaks received donations in bitcoin after its accounts were blocked for leaking classified information. Nigerian activists have used cryptocurrencies to raise funds for their recent protests against police brutality, after traditional banking channels were shut off. “For socialists, it could be good to organize without taking a detour through large capitalist companies, whose interests are anti-aligned with yours,” says McKeever.
But beyond that, blockchain might also be useful to build a socialist economy. Adrian mentions a hypothetical case in which the government might be able to distribute housing through blockchain and cryptocurrencies.
Capitalism, says Adrian, allows individuals to accumulate infinite amounts of capital, and in turn buy up houses as investments. To transition this to a system based on need, a token, or coin, which gives every citizen the right to a house, could be used. The community would then decide which categories of people are eligible for which houses. A single person, for example, might get a different token, and in turn access to a different selection of houses, than a couple with three children. In this way, blockchain would allow socialists to distribute goods and services without a market. “We need to distribute housing based on need, instead of through the market,” Adrian says.
The Venezuelan experiment with the petro, a cryptocurrency backed up by oil, is the odd one out. The attempt had more to do with evading U.S. sanctions than moving to socialism.
But even beyond Venezuela, traditional libertarians don’t agree with the cryptosocialists’ views. “Cryptocurrency technology is fundamentally libertarian,” says Diego Zuluaga, associate director of financial regulation studies at the libertarian think tank Cato Institute.
For him, libertarianism doesn’t just mean free markets. He argues that cryptocurrencies preserve the ability of individuals to do with their money as they please, instead of centralizing that power. And for Zuluaga, the plans of leftists like Adrian run counter to that fundamental libertarian belief about cryprocurrencies. “Most socialists like hierarchies,” he says. “They just want to replace private sector hierarchies with public sector ones.”
“They don’t know what they’re talking about,” responds Adrian, noting how capitalist economies are still highly centralized. Cryptosocialists argue that turning to blockchain could eliminate bureaucrats from the equation. “With blockchain, you don’t need to depend on a centralized authority,” Adrian says, returning to his housing example. “The alternative is for a socialist government to organize the housing supply, which creates technocratic dependencies.”
Blockchain would also be open source, allowing citizens to review the software underlying government decisions. In a sense, it would help avoid an age-old problem for socialism: that its utopian sentiments tend to get bogged down in stale bureaucracies. To back this up, Adrian references socialist philosopher Friedrich Engels: “He said that we need to transition the state from a government of people, to the administration of things.” Perhaps blockchain is the revolution that socialism needs.