Sunday, April 8, 2012

Bitcoin is Voluntarist Not Socialist

By Beautyon
Irdial Discs
Sunday, April 8, 2012

The idea of socialism is diametrically opposed to the core philosophy of a voluntary peer to peer system like Bitcoin. Peer to peer systems dis-intermediate the transfer of information and eliminate the need for an arbitrary governing authority or service provider. Bitcoin, like maths, has no philosophy and is neutral.

Socialism's basic premise is that 'property is theft', and that all property, goods and services should be collectively owned for the benefit of all people in a coercive State with no opt out. Under a socialist system of forced organization, individuals do not have free use of their inherent rights, which are violently suppressed.

This is an inherently immoral proposition, where one group of people inevitably coalesce into an illegitimate ruling class to control and administer other people 'for their own good'; the good of the collective. Even if this aggregation of power were not the case, no man or group of men has the right to force another man to relinquish his property.

Libertarians understand that there is no such thing as 'the rights of the collective' and that only a living individual human has rights. Chief amongst these rights, the 'root right', is the right of property.

Anyone who contends that Bitcoin is a socialist idea is fundamentally mistaken about how Bitcoin works and its true nature, or is trying to redefine socialism so that it can fit in with and be the standard bearer of the inevitable rise in Bitcoin. You can detect this when you read the phrase, "my idea of socialism is" in this context, which means that the speaker wants to abandon the bad smell of socialism and re-brand the word to mean something that it is not, so that he can remain 'a committed socialist' and be a part the real world at the same time.

Bitcoin is the antithesis of socialism. Bitcoin transfers, the ownership of Bitcoins and the rules governing exchanges are not administered by a central State authority, unlike a system designed by a socialist, where who can own what, how much of it, and what can be done with it is absolutely regulated by a group of violent bureaucrats.

Bitcoin is a strict peer to peer protocol, and not a centralized system under the control of arbitrary rules or fallacious economic ideas like Keynesianism. In its essence, Bitcoin acts like a law of nature (powered by cryptography) and it does not 'care' about your philosophy or ideology. By dint of this alone, Bitcoin cannot be called 'socialist' or have a political philosophy attributed to it, any more than an inanimate object, or a fundamental force of nature can. It is designed to do one thing, it does that thing, and that thing is not inherently political; only Bitcoin's users have political ideas that they try, and fail, to superimpose upon it. Bitcoin is neutral, like a hammer or an neutron or a hand gun.

Bitcoin is a stateless suite of software protocols that is purely voluntary. You may or may not use Bitcoin at your own discretion. No one forces you to be a part of the Bitcoin ecosystem or to abide by its rules. How many Bitcoins you accumulate in exchange for goods and services is entirely up to you and your trading partners, and what you spend your Bitcoins on is entirely up to you.

The users of Bitcoin do not 'have a say' in what you can or cannot do with them. There is no State, Statist, or socialist that can tell you that you may not collect as many Bitcoins as you can, or that your Bitcoins belong to the collective, or that you must hand over a percentage of them to the State 'for the good of the people'. Users of Bitcoin, by default, are freely associating humans, choosing freely to accept the rules of the Bitcoin system. This is the complete opposite of socialism, which is the negation of individual liberty, the abolition of free choice and the elimination of property rights.

Anyone who claims to be a socialist whilst advocating for the widespread adoption of Bitcoin is de-facto acting against their socialist principles and desire to create a world where collective property ownership and centralized direction of capital is enforced with violence.

In a world where money transfers are made entirely through the Bitcoin block chain, a socialist state will at the very least, have a huge amount of trouble compelling people to hand over their money to the State by force. As usual, the socialist collectivists will resort to threats, violence, imprisonment, confiscation of real property and any other immoral and disgusting means they can come up with to steal money from people. This begs the question, "how can an avowed socialist advocate the adoption of Bitcoin when it has the potential to destroy his violent Statist utopia from the inside out?"

Its an interesting question. I suspect that many socialists who advocate the adoption of Bitcoin are having a profound internal struggle with the emergence of not only Bitcoin but of the internet itself and its astonishing, undeniable example of stateless cooperation between men that has had the effect of benefiting everyone.

The internet has brought to everyone on it, at a cost that is near zero, the entire body of human knowledge. Two billion, two hundred and sixty seven million two hundred and thirty three thousand, seven hundred and forty two people and counting. It has also rendered practically redundant, the state monopoly telephone systems and postal systems. Anyone who still believes that we need the State in the face of these revelations is completely insane, or is on the road to abandoning socialism, or is sticking his fingers in his ears unable to face the facts of this matter.

Man is better off in every way without the State. The paradigm shifts brought about by the internet in publishing, music distribution, postal mail, telephony and the new, without precedent services created by the connectivity of the internet are proof of this. Each of these industries has been regulated by the State in the offline world, and now that they are running in the online world without State regulation they are more efficient and beneficial by orders of magnitude. The only people who are against this are the vested interests, the buggy whip makers, and the socialists, and every time they try and exert their influence they inconvenience and damage people and cause them to expend time and money where they would otherwise not have to.

The next great shift on the internet is going to be the complete disruption of the sclerotic bank mediated money transfer systems in favour of internet facilitated money transfers that remove banks from the process flow. This event will cause a great acceleration in the transaction rate of commerce world-wide, will de-fund the socialist states and be of great benefit to everyone everywhere.

All the attempts the banks are making now to embrace the internet and peer to peer payments systems will eventually fail, as long as people are free to develop software, release it and freely interface with money. This is why PayPal has banned transfers that touch Bitcoin in any way; they know that Bitcoin is completely superior to PayPal, and that it constitutes an existential threat to their business. PayPal allowing its system to be used to make payments in exchange for Bitcoins is allowing blood vessels to feed a cancerous tumour. Bitcoin is cancer to PayPal and they must kill it at any cost.

The PayPal response to the inevitable peer to peer payment ecosystem in the form of their 'Blue Dorito' suffers from the fatal elixir of powdered friction, arbitrary rules, suppression and regulation by the State, all made soluble with a profound lack of imagination - none of which Bitcoin suffers from... but that is beyond the scope of this post. PayPal will eventually become the MySpace of moving money because it is wedded to the pre internet mode of thinking when it comes to payments, and they are in an abusive shotgun wedding with the State.

Money sees the State as damage and routes around it. This is the fundamental truth of Bitcoin that will completely disrupt the business of money transfer and benefit billions of people world-wide. Bitcoin, or one of its successors is going to be the service that makes this disruption come to pass. Once critical mass is reached, Bitcoin will be completely unstoppable. We need only look at the French restrictions on 128bit SSL and the way they dropped them when it became the standard protection for eCommerce transactions. The first sign of this shift will be the adoption of Bitcoin as an accessory service on one of the major money transfer service providers, offering Bitcoin transfers to the computer illiterate.

Bitcoin is not socialist. It is not collectivist. It is voluntarist.

Reprinted with permission.


  1. If you listen to what they admire about bitcoin, it is the egalitarian nature of mining and non-corporatist approach to value. However, what socialists miss about bitcoin is that it also has the potential to dismantle the State's taxing apparatus.

    Admittedly, they are confused but remember that there is a socialist/anarchist lefty type of thinking that completes the political circle. Just like you think 'socialists for bitcoin' are irrational, Bakunin also believed that Marx's desire to abolish the state and create an anarchist system via state power was irrational. Marxists and anarchists both wish to abolish the existing state but they differ on what replaces it -- Engels famously said that the workers' state will eventually wither away on its own.

  2. Beautyon replied:

    The problem I have with the thinking of the socialist is their complete misunderstanding of what rights are and where they come from, and their insistence that it is correct that they can control other people with violence.

    Ethically, the socialist is no different to the slave masters of the past, who believed that they could own other humans as property, and that there was no problem with it. The difference between socialists of today and the slave owners of the past is that socialists believe that everyone owns a quotal share of everyone else. Of course, things never work out exactly like that, and an elite always clots out of the masses to be the absolute controllers of all property and people. That flaw has nothing to do with the inherent immorality of socialism obviously.

    Socialists cannot logically be for Bitcoin because it de-funds the evil pipe dream of an omnipotent State where their 'property is theft' ethos is the law. Bitcoin renders this fallacious idea moot in the field of money. Anyone who calls for the mass adoption of Bitcoin and who also claims to be a socialist is therefore either confused about what socialism is or they're confused about what Bitcoin is.

    Oddly enough, some of this thinking overlaps into the issue of children. Do parents own their children, or does the State? Rothbard puts it plainly:

    1. Either the parents, or creators of the child have the property right in the child

    2. Another man or set of men have the right in that child, i.e., have the right to appropriate it by force without the parent’s consent

    3. Every individual in the world has an equal, quotal share in the ownership of the child — the “communal” (Führer/UN/State as father) solution.

    The socialists take the third position about money and property. You do not have the right of property in their thinking, and if they concede that you do, its conditional upon the will of the people, which of course actually means the faddish, irrational ideas of the technocrats.

    Bitcoin mining is not egalitarian; if you have alot of money, you can become a dominant miner of Bitcoin, and there is nothing anyone can do to stop you. Its just like being a gold miner, only you do not need a license or access to land, just the hardware and electricity.

    As for the approach to value, this is a fascinating question about the true nature of money. As you know, the Austrians don’t think Bitcoin is money. The Keynesians think it is money, but not a good one. They are both wrong to an extent.

    Engels was wrong about the workers' state eventually taking over. The workers will never take over anything. They are just too ignorant, disorganized, uneducated and demotivated to do so. Only a small number of elites in their class are interested in power, and their voices are disproportionately loud. Even if they could take over by some accident of fate the nature of man's relationships will cause an elite to inevitably act as organizers, leading them straight back into the boxes they allegedly want to escape. In this respect, they really are like bees in a hive with a queen and rigid classes of ordered workers.

    My way of thinking has been the same for many years; no matter what people believe or say, the most important thing is to release products. The products themselves will stand or fall on their own merit. Bitcoin is a perfect example of this. Without money or promotional organization behind it, it has risen to have a real impact on the world. Many people are developing services built upon it; it is pure capitalism in action.

    I think its a certainty that the Canadian Royal Mint's sad and intentionally broken effort to enter the digital money market is evidence of this. People are paying attention to Bitcoin and acting on its existence, either by trying to compete with it or by adopting it as their own as some socialists are trying to do.

    Read the rest at

  3. The ideal is democratic socialism on a global scale. First we must dismantle corporate capitalism via Global Liberation.

    1. Democratic socialism on a global scale is absolutely terrifying. How about liberty on a global scale, instead. Instead of centralization of collective power, how about dissemination of power out to the individual - where each man is sovereign of himself, and no man nor group has the sanctioned power to force their will upon another.

  4. A reader wrote in and provided this good link:

    State Socialism and Anarchism: HOW FAR THEY AGREE, AND WHEREIN THEY DIFFER (1888)
    by Benjamin R. Tucker (1854-1939)