Materialist Governance of Bitcoin and the Blockchain

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Jaya Klara Brekke, Kate Beecroft and Francesca Pick:

"Philosopher Grosz discusses the long-standing philosophical debates about the relationship between matter and the immaterial and immanent realm: “Materialism holds that everything is matter, commonly considered inert, passive, regulated by mechanical principles” (Grosz, 2018, 15). Blockchain, especially in the Bitcoin context, represents a materialist solution to governance, with matter understood as an objectively known condition in contrast to unknown subjective interests; by shaping an external material reality, a given process is no longer set in motion through a person’s decision, but rather has been engineered, encoded, and inscribed to take place independently of active subjective consideration. It happens “automatically” as a material fact. Maurer et al. have noted, “[d]espite the supposed immateriality of digital bits of information [Blanchette 2011], matter itself is very much at issue with Bitcoin, both in how it is conceptualized and in how individual Bitcoins are ‘mined’” (2013). The materialism that is evoked in the concept of mining has both monetary and organizational aims. The monetary ideas that liken Bitcoin to gold have been discussed and critiqued at length elsewhere (Maurer et al., 2013; Bjerg, 2016; Golumbia, 2016; Brunton, 2019). Here, we want to highlight how gold is also understood in governance terms as a form of material disintermediation of authority. In what Maurer et al. critique as “digital metallism,” gold is assumed to have an intrinsic value, with the idea that it thereby can “disintermediate” who gets to determine value from an institution to the inherent material qualities of the metal itself (2013). As Musiani et al. also note, in Bitcoin, governance itself was considered resolved through the material facts of a purely technical arrangement (Musiani et al., 2017), and in the process, conveniently sidelining the decisions involved in constructing and running the infrastructure.

The extent to which material artifacts, infrastructures, and matter can be considered independently of social, political, or economic processes comprises longer standing debates in philosophy, dealt with most effectively in Science and Technology Studies (STS). In answer to technological determinism, Langdon Winner, in a famous 1980s paper, wrote “[T]hose who have not recognised the ways in which technologies are shaped by social and economic forces have not gotten very far” (Winner, 1980, 122), and in the very next paragraph conversely also takes issue with anyone assuming that material things are solely determined through social processes. Instead, both the social and the technical are implicated in one another, although to varying manners and degrees depending on the given situation. Technological algorithms, considered as a material arrangement, can in this sense be considered processes that have already been socially assumed or agreed upon as necessary and legitimate and therefore made to happen “automatically.” And such settled arrangements might in unpredictable and unknown ways erupt again as a political question—when something breaks down or the environment and context shift in ways that might benefit some actors over others (Edwards, 2003). Indeed, for all the technological and material determinism that is mobilized for the ideological project of Bitcoin, “the social dynamics of community and trust—evident in the prose and poetry produced by Bitcoin users—can still be heard through this practical materialism” (Maurer et al., 2013, 3).

Drawing exactly on such a nuanced approach offered by the field of STS, Musiani et al. foreground the “sociotechnical controversies” of Bitcoin (2017), highlighting how technical developments become politicized in ways that are hard to predict both the scope and scale of beforehand: “one can find in the short yet charged history of Bitcoin manifold such debates, where what seemed to be a technical issue ends up as a political problem” (ibid. 2017, 134). This was most evident in the much discussed Bitcoin scaling conflict and the Ethereum DAO hack between 2016 and 17 (DuPont, 2018; Reijers et al., 2018; Azouvi et al., 2019). The DAO was an attempt at creating a venture fund organization, governed entirely by code. In June 2016, 3.7 m Ethereum tokens, or $60 million USD equivalent, were stolen when an unknown person exploited a bug in the DAO code. Two groups emerged with dissenting views: what came to be called “DAO maximalists” strongly argued that “code is law” (in a misconstrued reference to Lessig (2000)) insisting that whatever was written should stand as unaltered, inalienable law, as had been promised. A second group sought to recover the funds, arguing that lessons should be learned and social consensus matters for how and whether the law of code should be changed. Following this event, the Ethereum community became intensely focused on the “governance problem.” This combined with huge budgets that emerged from the initial coin offering (ICO) boom brought an explosion of “governance tech” companies such as DAOstack, Colony, and Aragon, with renewed intent on using blockchain for solving governance problems."