The bitcoin innovation, crypto currencies and the Leviathan

Abstract

The advent of crypto currencies like bitcoins has raised questions about the continuing relevance of fiat money and centralized financial institutions run by Leviathan States. Bitcoin is a crypto-currency engendered by new computation technology which relies on a distributed network of peer-to-peer computing agents referred to as ‘miners’. These agents earn bitcoins by successfully settling and securing economic transactions in electronic ledgers called blocks. Successive blocks are stringed together to form blockchains. This radically different world of alternative currencies heralds a change that leaves Leviathans nonplussed for four reasons. First, bitcoin miners, who function as neo-Spinozian multitudes, squarely challenge the prerogative of the State to issue fiat money. Second, these distributed communities usher in a new philosophy of time in order to measure their mining efforts objectively. Third, these communities change the existing state of affairs by linking bitcoin earnings to ‘proof of work’. The fourth contribution of this unique community lies in the ideas of consensus they embrace. However, in recent times, crypto currency miners, who are forced to ramp up their mining operations, are constrained to depend on the world of fiat money in order to mobilize resources. What was primarily designed as a digital means of payment has turned into a speculative asset undermining its ability to replace fiat money. This paper argues that the future of distributed networks will depend on whether they can obviate their pernicious dependence on the Leviathan by adopting rigorous codes of conduct for conducting their operations both autonomously and more sustainably.