Lukas Z's Blog

What Bitcoin and Communism Have in Common

This is basically a shower thought. Let me explain..

In a way Bitcoin is a huge brake, like a brake that stops a car, that we are building to reach our ideal of a decentralized democratic digital currency. Why is it like a brake? Because we have to spend energy, a very large amount of energy, to prevent something to happen that is natural. Just like it’s natural for the wheel of a car to continue spinning, and for the car to continue to move forward, we need to spend energy to apply a counter force to slow it down again.

So spinning is natural for the wheel, but what is natural for computers? The answer: Copying data. And performing operations on it. With just a little imagination and the right tools, anyone can make a computer do anything. (Remember Steve Jobs’ “Bicycle for the mind” metaphor.) The state of computers in malleable. So much so, that we invented error correcting codes, checksums and hashes to ensure that the data is unchanged. (These techniques of course play an important part in the technology that is Bitcoin.) But fundamentally, the computer remains a very malleable thing. It’s boundless and anarchistic in nature. Because the basic material it works on is information itself. And information seems to want to flow, just as a river wants to flow downstream. (For example, remember the last time you had to exercise willpower so you don’t tell a juicy secret to someone else?)

Bitcoin relies on having a lot of people agree on one set of data and for that data to be unchangeable (plus some other interesting qualitites). For this to work a mechanism called Proof of Work was invented, but in my metaphor it’s just a huge brake that prevents data from changing. And just as the brake on the car gets hot when it slows down the car by applying pressure and causing friction, the big Bitcoin brake of course also get’s hot and produces all that heat caused by CPUs and GPUs and other hardware calculating all those hashes, which, essentially results in more CO2 in the atmosphere. You just can’t cheat the laws of physics (unless you are Neo in the Matrix).

So what about the Communism? Well it’s similar. It’s a great idea with a lot of appeal at first, for example it seems to empower the little guy in the short term, but in the long term it fails because it opposes what is natural. In the case of Communism certain liberties that were a given in the west, had to restricted, to uphold the assumption that all people are equal (or something like that). What did they end up doing? They had to build huge brakes that prevented the people from leaving. They build sophisticated border walls and fences to contain the people. And on top of it an immense amount of bullshit, lies and brainwashing, had to be applied as well. Just so it worked. But it only worked for a while.

So Communism had to construct a big brake (or many brakes depending how you look at it), because it tried to do what was not natural for people. And Bitcoin has a big brake to prevent from happening what is natural to computers and information in general. Will it also remain a nice utopia that eventually failed because of the upkeep of that brake? Or will it change the rules fundamentally?

For me computers always have been about this nimbleness, this “think it and just do it”-ness, with ever faster CPUs and ever lower barriers to do more and more stuff. Bitcoin seems doomed to do the exact opposite. By making “mining” (Proof of Work) harder and harder (and, arguably, by spending more effort on convincing people that it’s good), it will use more and more energy, and thus it will always be an uphill battle. While computers get faster and faster and, perhaps, more people start asking: Why bother?

Having said all that: I own Bitcoin (and some Ethereum) and I’m happy that the mini amount I have now can buy a car or is worth a very luxurious holiday. So a part of me certainly doesn’t want it to fail.

And yet..

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