Bitcoin presented to the Old-world

Just back from the 10th edition of the EPCA conference held in Amsterdam, where I was a shoulder for my friend Genjix: bitcoin developers were invited to talk about Bitcoin to a specialized audience of mostly >50 years old banker types in suits, with very few exceptions.

Genjix presenting bitcoin in EPCA2011

The incipit of the conference booklet recites: “Over 200 transaction services professionals from all over the world will attend, discuss and experience this leading platform. For the last 10 years we have been on top of trends and developments in payments. We focus in particular on strategic innovation and break-through developments in on-line transactions“. And in fact it looked pretty well populated for that kind of context: besides the white-male-with-suits first scary impression, especially for those who value variety, from the written documentation available (I haven’t attended talks) one can tell these people run quite some businesses – at least they did until now <g>- and quite successfully.

The brochures of the conference talk about transaction systems, RFID/NFC payment devices and all flavors of bank related products along the names of “Mobile Money”, “Secure SD”, “ePassport” and “Automated Fare Collection”.

Our guy Genjix is a colorful and open minded type, witty and messy, a good mix that entertained the people present despite it being the last presentation of the day; he did a good (unpaid) job presenting some quite impressive information on the growth and usage of Bitcoin, making people present progressively interested (or pissed, but then hard to notice behind the suits) at this crypto-cash system that seems to be there to stay or, one could argue, to multiply in different flavors in the near future.

“Being shown an anonymous digital currency with its own laundering service. Used for selling drugs. Bit-coin, you have cheered me up.” Michael Price

The presentation didn’t hide even the most controversial aspects of bitcoin, pointing out to some very extreme usage: something that seemed to relieve the audience, considering that banker types are pretty beaten up by corporate ethics evangelists nowadays. In such cases Bitcoin tends to show that anonymity is used in the “worst” way, which is still half of the story. We are still far from developing a positive narrative on anonymity and continuing on this track will likely move policy makers into massive identification campaigns, as it has been now since the 9/11 sad facts.

Still on the good side for bitcoin is its working implementation of a distributed system relying on an “open source algorithmic contract”: something definitely inspiring that knocks off the hegemony of old-world currencies – and one can hardly imagine how they’ll ever recover from this manifest process ultimately due to the unstoppable, immanent influence of the digital dimension.

Bitcoin is a messenger and the message it carries doesn’t originates even from a person, or a group of people, not even an organization or a company: it’s a Geist (or Zeitgeist, should we say) that impersonates the ultimate dissolution of centralized governance: everything that was solid melts into thin air, should we mourn once again, while all those who were on the deregulation train in 1984 have now to face their kids reminding them how their World is made of lies – and dreams, apparently, still alive.

Following a materialist point of view (and crypto-agnostic, we’ll argue) bitcoin can surely be interpreted as a Rube-Goldberg machine for buying electricity – and this was even our very first reaction at DYNDY when we got to know it the first time. Surely these are times when materialism is needed, as opposed to more abstract financial blabbering, but then consider what the processing power in bitcoin it really is for: it serves to strengthen the network authentication! all that electricity is energy invested by participants to enforce the integrity of the network. Now consider how old monetary systems keep their integrity: a huge government building with armed guards along the perimeter, to not even mention the huge investment of resources and infrastructure to distribute this money (street level access) and authenticate it at transaction time. Remember prof. Greco? we’ve been talking about this…

Bitcoin is a “disruptive technology”, but disruptive for whom? as a human creation, it inherits human problems that are also present in older systems; still P2P currencies as bitcoin let us save energy rather than consume more, also substituting the violence of armed guards with agile and cryptographic communications.

Ultimately, the positive message that bitcoin also carries is that of more possibilities in engineering currencies, that of a future in which complementary currencies can make economic systems more resilient to the the disruption of capitalist behaviors, while closely relating people to their community values and maybe even revolutionize the way we contribute to the common good – paying taxes for what we really care, rather than not paying them, let me add.

Quoting Wei Dai in one of bitcoin’s founding texts: “It’s a community where the threat of violence is impotent because violence is impossible, and violence is impossible because its participants cannot be linked to their true names or physical locations. Until now it’s not clear, even theoretically, how such a community could operate. A community is defined by the cooperation of its participants, and efficient cooperation requires a medium of exchange (money) and a way to enforce contracts.

Now I’m wondering how people present at the EPCA 2011 conference feel, threatened or pleased by this epiphany? in either case it might be interesting to watch reactions. The transaction products I read of are stacking on technological complexity and seamless design that is ultimately undermining the very possibility for people to trust them. On top of that now there are on-line grass-root communities actively building new systems in a decentralized fashion. Will the monopoly of violence enter this game to defend the old-system, despite the squeaking sounds of its carcass, the diffused lack of trust for old hierarchies and the lack for collective agency within its cheated rules? We will see where this ends up: after all today it felt like one of those historical days marked by such a talk made by a little provocative guy wearing a t-shirt and nail polish speaking in front of a old and well dressed audience – but then no-one was really scared.

IRC excerpt from #bitcoin-dev during the conference

<jaromil> sirius-m: i'd expect some more fashion happening
<topi`> jaro: they just don't know how :)
<sirius-m> thanks for being there, it's a new important audience for bitcoin
<sirius-m> people who otherwise might not hear about the project
<jaromil> true but knowing the types i think they are thinking how to fork it in their own advantage
<jaromil> prolly wasted effort
<topi`> at least they start talking about it:)
<topi`> good luck finding ways to exploit the system
<krytzz> hopefully they cant fork the network
<krytzz> only could start a seperate one :(
<sirius-m> nah, it's good that you're spreading the word :)
<topi`> if there *will* be some threat coming from corporate sector, then we'll finally find out how resilient the whole architecture is :)

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Here is the video of the talk by Genjix on Vimeo

12 Responses to “Bitcoin presented to the Old-world”
  1. In regards to ‘corporate’ threats… There’s money to be made here. (literally, with miners, even) This is called a disruptive technology, and any corporate clown suit that actually understands what they are doing will want to invest whatever old money they have left in the new money.

    How can you be threatened if you fear nothing?

  2. Dave Parrish says:

    Excellent article! Thank you to those who gave the presentation. Is there a video anywhere for the presentation?

  3. Anonymous says:

    I’m glad you liked the conference, thanks to Genjix for the presentation. The presentation will certainly be made available as video online. The AV people are doing the editing now, I’ll let you all know when it is available. Now how do I get back the 0.11 BTC that I sent out for the live demo…?

  4. Tertius Wehmeyer says:

    Funny how bitcoin is based on old-fashioned concepts like mining for gold. And scarcity of the money supply. Those concepts was used to enrich a few families and they are still around to control the world. Why should a country that have no gold first get gold to have a financial system? Why should a country or a community first get bitcoins from whereever before they can have a viable financial system. If you need an electronic currency, just create your own.

    Scarcity should be replace by sufficiency. There should be sufficient money to invest in the real economy to ensure that there is enough available money to facilitate all spending on the real economy. If I have to create a trusted community bartering group, all I need is a good internet connected bookkeeping system to record debit and credits. This is in essence what the fractional reserve banking system is. The banks just make perverse profits out of compound interest and inflated service fees for in essence providing a bookkeeping and debt collecting service. And they can provide no / low interest loans to buddies who can use these IOUs to buy anything they can and then we split profits and ownership.

    Bitcoin is good technology based on outdated concepts like scarcity and greed. I.e., if I’m an early adopter all I have to do is to wait and my bitcoins will increase in value. A parasitical rent-seeking attitude… Bitcoin won’t bring the financial revolution and freedom from the control of the banksters as it is not based on a proper understanding of the current financial system and outdated concepts about money. As if the creators of bitcoin used a prescribed pre-graduate economics textbook and based their design on the same bullshit concepts that the current financial system is based on.

    And it is not really new. It is the peer-to-peer version of an electronic purse of bank money from a central banking server that can be stored on a mobile phone. If Bitcoin was based on pure accounting principles and a stable value, it can become viable as a currency used by community exchange systems.

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