Wendy McElroy: Decentralization is the Core of Crypto Freedom
The Satoshi Revolution: A Revolution of Rising Expectations
Section 3: Decentralization
Chapter 8, Part 2.
Decentralization is the Core of Crypto Freedom
Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has. Always remember that you are absolutely unique. Just like everyone else. Never believe that a few caring people can’t change the world. For, indeed, that’s all who ever have.
Cryptocurrency decentralizes financial power down to the most basic unit of society: the individual. It empowers the average person who now has a viable alternative to corrupt government fiat and central banking systems.
Crypto is profoundly individualistic in other ways. Consider just one.
“The revolution of rising expectations.” The phrase refers to a situation in which an increase in prosperity and freedom leads people to believe they can improve their lives through their own efforts. The belief makes them demand political changes that allow more prosperity, more freedom. The average person is not a freedom fighter, and their demand for change need not hinge on ideology. They simply want a better life for their children.
The phrase arose after World War II had destabilized the power structure of the world. Former colonies from the Far East to Latin America and Africa threw off imperialism and despotism because average people glimpsed another option to conformity: individual freedom.
The advent of cryptocurrency is destabilizing the financial structure of the world, and it has caused a second revolution of rising expectations. It does not occur on the national level but within the lives of individuals, who can finally control their own finances in privacy and with confidence. This has deep political implications, of course, because independent people are less likely to obey.
And, yet, voices within crypto deny that the phenomenon is individualistic. Their argument usually runs as follows: cryptocurrencies depend on a cooperative network of miners, nodes, developers, and administrators. In short, it is collective. This reveals a confusion about the meaning of individualism
What is Individualism?
As a social theory, it means advocating the freedom of individuals as opposed to the power of a collective, especially the state. As a personal matter, it means people make their own peaceful choices, especially the choice to say “no.”
Individualism is often misconstrued as a “rugged” independence from the desire or the need for society. In some cases, that may be true. But usually the opposite applies because human beings seek interaction almost as much as they seek food and shelter.
In his masterpiece, Human Action, the Austrian economist Ludwig von Mises explained, “If praxeology [the study of human action] speaks of the solitary individual, acting on his own behalf only and independent of fellow men, it does so for the sake of a better comprehension of the problems of social cooperation. We do not assert that such isolated autarkic human beings have ever lived and that the social stage of man’s nonhuman ancestors and the emergence of the primitive social bonds were effected in the same process. Man appeared on the scene of earthly events as a social being. The isolated asocial man is a fictitious construction.”
Interacting in society or joining a network actually increases individualism because it allows each person to reach his or her potential and to achieve goals that are impossible in isolation. Jointly-produced wealth can be far more abundant than privately-produced wealth, leaving everyone involved richer. It is precisely this sort of social cooperation that has made mankind dominate the planet.
The only relevant question is: do they interact voluntarily or against their will? Are they free to say “no”?
The value of society depends upon the decentralization of power down to the individual. If power is centralized by a state or another collective, then society can easily become a disvalue. Peaceful acts, such as using drugs, can result in prison; property can be confiscated for violating an unreasonable law; children can be kidnapped by a state agency, whether or not abuse has occurred.
A Less Obvious Lesson from Satoshi
A cooperative system is immensely valuable to individuals. In the case of Satoshi, he provided it for free because he wanted to change the world for the better, and freedom is the path to that destination.
The revolution offered by Satoshi Nakamoto is a perfect illustration of how genuine individualism works in society. Economic control is vested in the hands of individuals, where it firmly remains. People can store their wealth in private wallets and conduct international trade, without going through a banking system that is an extension of the state. Trusted third parties, such as banks, are replaced by individuals, such as miners. It does not matter if the miners are part of a collective effort. It only matters that each one participates voluntarily and can say “no” at any point. If that is the case, then they remain full individuals who choose to function within a cooperative effort.
The decentralization of economic control is reinforced, not contradicted, by the cooperation of a network of people—all of whom act in their own self-interest. That’s as it should be. And, yet, all of the strangers benefit each other, even though they are strangers who might not care for each other should they ever meet. That is true society.
It is also the reason why all state efforts to control cryptocurrency revolve around centralization. Central banks attempt to issue their own crypto in order to usurp the market. Centralized exchanges dominate trades, which they report religiously to the state. Privacy renegades are imprisoned, or otherwise slapped down hard. Private cryptos, like Monero, are accused of being “drug money,” even while state-issued crypto is regarded as pure as fresh-fallen snow. Decentralized, or private systems, are demonized when they are actually the true hope for financial freedom. Which, to a statist, probably makes them demons.
The free market and individual rights are often blamed for the problems of society. The free market exploits and individuals make the wrong decisions; or, so the story goes. And, sometimes, the story is true. But the free market and individual rights are blamed not for the wrongs they commit but because they pose the greatest threats to social control. The libertarian touchstone, Murray Rothbard, explained the difference between “free market exploitation” and state control.
“If I cease or refrain from purchasing Wheaties on the market, the Wheaties producers do not come after me with a gun or the threat of imprisonment to force me to purchase; if I fail to join the American Philosophical Association, the association may not force me to join or prevent me from giving up my membership. Only the state can do so; only the state can confiscate my property or put me in jail if I do not pay its tax tribute. Therefore, only the state regularly exists and has its very being by means of coercive depredations on private property.”
Decentralization of power to the individual, who chooses to buy Wheaties or not, is the acknowledged lesson of Satoshi. The largely overlooked one is that human beings in cooperation with each other is a basic expression of individualism.
“The revolution of rising expectations.” What people need more than anything else is hope; it drives revolutions that occur despite tremendous obstacles, and it creates peaceful societies in which people prosper. But, sooner or later, hope must be based on evidence that there is reason to do so. Cryptocurrency is not merely evidence, it is proof.
It is also individualistic, because nothing inspires individualism as much as the belief that life can become better through effort and merit.
[To be continued next week.]
Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters
Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.