The Politics of Bitcoin: Software as Right-Wing Extremism

David Golumbia “The Politics of Bitcoin: Software as Right-Wing Extremism,” University of Minnesota Press, 2016 Paperback, 78 pp.

Spoiler Alert:  After reading this book, I still don’t pretend to understand Bitcoins.  For that matter, I don’t really understand dollars.  I do understand Gift Cards and think that dollars are something like an international Gift Card with respective national governments standing behind it—in some countries, way behind it. 

In any event, I did find some useful tidbits on the subject of Bitcoins in this book even though I have a problem with the author’s credentials.  The author devotes much of the book explaining the attraction Bitcoins have for Right-Wing extremists.  David Golumbia teaches in the English department and the Media, Art, and Text Ph.D. program at Virginia Commonwealth University.  I mean: Come on already!

Addenda:  On the internet I found some latest news on the subject: 

(As of December 2013, half of all Bitcoins were owned by approximately 927 people).

A Russian man, Alexander Vinnik, was indicted by a U.S. jury on charges of laundering more than $4 billion through a Bitcoin exchange, he was arrested in Greece on 7/25/17.  The U.S. Justice Department thinks he used the BTC-e exchange

(On 7/29/17 a Bitcoin price is at $2766; in May 2013 it was worth $100 which represented nearly an 800 percent gain for those who held it for five months). [Bitcoin's price approached $20K in Dec. 2017 and then crashed 20%]

8/1/17 WSJ: “This week, after years of industry infighting, the digital currency bitcoin is set] to get a new competitor: itself.  A splinter group of Bitcoin developers is launching a new version of the currency with a different configuration.  The new experiment, known as Bitcoin Cash is causing confusion as exchanges and brokerages scramble to deal with the new currency.  As a result, there will now be two competing versions of Bitcoin both vying for the support of investors, developers and miners.  Miners are companies and individuals that process bitcoin transactions.”

My Notes:

Pg. 1f:  In the early 2010s observers of digital culture began to read more and more about a new form of digital payment called Bitcoin.  Although any number of digital payment systems had already emerged—from relatively straightforward tools for money transfer such as new Western Union services, online bill paying, and PayPal, to more exotic systems such as Liberty Reserve—Bitcoin was said to be different.  This difference stemmed from at least two sources: first, that it was based on a relatively new form of cryptographic software technology called a ‘blockchain,’ and second, that Bitcoin had skyrocketed in its value relative to official world currencies like the US dollar. 

 (Note: the first coins were created in 2009 and were virtually worthless.  Bitcoin’s price declined from $1,000 in late 2013 to $200 in mid-2015 showing its high volatility p. 29). 

Pg. 29:  The Bitcoin program is currently capped, the software permitting only twenty-one million coins to be ‘mined.’   (The Bitcoin has a current Dec. 2017 circulating supply of 16.5 Million coins.)

Pg. 35:  Following a massive release of secret US diplomatic cables in November 2010, donations to WikiLeaks were blocked by Bank of America, VISA, MasterCard, PayPal, and Western Union.  But not Bitcoin.  Bitcoin made it possible for individuals to donate to WikiLeaks despite it being a violation of US law. 

Pg. 50:  Money and currency are not identical.  Money as economists define it serves three critical functions: Medium of exchange, store of value, and unit of account. 

Medium of exchange:  means that a token (which need not be physical; a token might be nothing more than an entry in an accounting ledger) can be used to buy or sell products and services.

Store of value:  Means that tokens can be saved, and can be relied on to maintain their purchasing power.

Unit of Account:  sometimes also called measure of value, refers to the fact that that the market uses the token in determining the value of products (prices).

Pg. 60:  The lack of regulation of Bitcoin means that hoarders can use all sort of sophisticated trading methods to manipulate the market.  This means that fly-by-night operations can come and go, stealing huge amounts of Bitcoin for themselves, as allegedly did the operators of both the short-lived Silk Road drug supermarket replacement ironically called the Sheep Marketplace.