Tag: libertarian

Tech

Blockchain and the Libertarian Uprising: The Bitcoin Example

Posted on by Robert

This is part 1 of a 5 part series adapted in blog format from my senior research paper titled “Blockchain and the Libertarian Uprising“.

Why do we trust a currency backed by a government that is fourteen trillion dollars in debt? Ever since 1971, when Nixon announced that US dollars could no longer be redeemed for gold, the value of the dollar has been based on our faith in it; we trust that a dollar with be worth something tomorrow, so we accept dollars today (Source). Everyone who uses the dollar has put their trust in the central authority of the US Government (The Treasury, Federal Reserve, etc.).

If you are a government, you create currency by manufacturing tokens of exchange and stimulate the flow by requiring that all taxes and fees be paid in your approved token. If you are Satoshi Nakamoto, you create currency by releasing ingenious code designed to run on an infinitely scalable network of globally distributed computers. Enter bitcoin; enter the blockchain. “Now we have a small piece of pure, incorruptible mathematics enshrined in computer code that will allow people to solve the thorniest problems without reference to ‘the authorities’” (Source).

With blockchains, individuals no longer have to trust in an authority to keep secure records. Blockchains are to trust what the internet is for information (Source). If the internet has taught us anything it’s that when change comes, it comes fast. Suddenly, central government may seem as archaic as the feudal system. Perhaps, society no longer needs a government-backed currency to facilitate exchange. What if individuals had total control over their data online? Maybe a liquid democracy is not only possible but necessary in today’s blockchain economy. Libertarians have long advocated that the sole purpose of government is “to protect individual rights to life, liberty, and property, and not abrogate these rights” (Source). By this Libertarian view, the United States government is bloated with unnecessary duties that blockchain technology is poised to organically force into obsolescence. Should the blockchain fulfill its full potential, it will become the backbone of the Libertarian uprising.

THE BITCOIN EXAMPLE

Bitcoin is the first and largest implementation of a digital globally distributed decentralized ledger or “blockchain”.

“A blockchain is a shared, distributed database that acts as an immutable ledger, recording entries and verifying them across a number of independent participants. Once an entry is made, it’s marked with a unique hash code that places it sequentially in the ledger” (Source).

In the last decade, bitcoin has demonstrated that a currency can exist without any government to endorse or perpetuate it.

Bitcoin is like digital gold that can be traded from person to person without a bank to keep track of all the transactions and levy fees (Source). However, the gold analogy is misleading. An individual’s bitcoins are not stored in a computer file or as a record in a central database like a bank account balance. All of the bitcoins in “circulation” lie in bitcoin’s blockchain which is an active record of every bitcoin transaction since bitcoin came into existence in January 2009 (Source).

Every transaction recorded in the bitcoin blockchain includes the sender, the receiver, and the amount of bitcoin sent in the transaction (Source). Therefore, any individual’s bitcoin balance can be determined by simply adding up the individual’s incoming bitcoin and subtracting the outgoing bitcoin for every transaction that individual has ever taken part of. The bitcoin blockchain is assembled by a globally distributed network of computers that verify each and every transaction (Source).

Roughly every 10 minutes, like the heartbeat of the network, all the transactions that have occurred in that span are placed into a “block” and are cryptographically signed in such a way that it mathematically relates to the all the transactions in the block that came before it (Source). The computers that do this verifying and cryptographic hashing are called “miners”. Other computers, called “nodes”, store complete or partial copies of the entire blockchain and are updated as new blocks are appended (Source).

The computers that comprise the network that builds and verifies the Bitcoin blockchain are owned and operated by individuals who are incentivized for their service to the bitcoin network by automated bitcoin payouts proportional to the amount of computing power they provide (Source). There is a fixed supply of 21 million bitcoins that can ever exist (Source). Currently, 12.5 bitcoins are created every time a new block is added to the blockchain (Source). These newly created bitcoins serve as the payout to miners mentioned earlier. Individuals who wish to use bitcoin need only a small piece of software called a “bitcoin wallet”. Each wallet issued has a unique address made of a string of random numbers and letters (Source). In order to send someone bitcoin, only their wallet address must be known; thus making bitcoin a pseudo-anonymous currency.

Part 2: The Blockchain Principles

Tech

Blockchain and the Libertarian Uprising: The Libertarian Philosophy

Posted on by Robert

This is part 3 of a 5 part series adapted in blog format from my senior research paper titled “Blockchain and the Libertarian Uprising“.

THE LIBERTARIAN PHILOSOPHY

Any argument claiming the fulfillment of a political philosophy must first define the tenets of such a philosophy. Additionally, in 2014, PEW research revealed that one in ten Americans identified as libertarian yet nearly 45% of respondents failed to identify elements of the libertarian ideology from a multiple choice list (Source).

Libertarianism is not characterized by a single viewpoint. Libertarians range from anarcho-capitalists who advocate the elimination of the state in favor of a free market to libertarian socialists who are anti-capitalist and would prefer to merely decentralize government (Source; Source; Source). However,  all Libertarians are united by a belief in individual liberty, economic freedom, and government skepticism (Source).

David Boaz, author of Libertarianism: A Primer lists the “Key Concepts of Libertarianism” as follows:

  1. Individualism
  2. Individual Rights
  3. Spontaneous Order
  4. The Rule of Law
  5. Limited Government
  6. Free Markets
  7. The Virtue of Production
  8. Natural Harmony of Interests
  9. Peace

Individualism

Libertarians hold that the basic unit of analysis in a society is the individual (Source). “Only individuals make choices and are responsible for their actions” (Source).  

Individual Rights

All individuals have a right to life liberty and property. These rights are not given to them by government but are inherent to being a human being (Source).

Spontaneous Order

While order is necessary for individuals to survive and thrive in a society, order does not necessarily need to be imposed by a central authority (Source). “The great insight of libertarian social analysis is that order in society arises spontaneously, out of the actions of thousands or millions of individuals who coordinate their actions with those of others in order to achieve their purposes” (Source). By this view, the natural comings and goings of individuals acting interdependently with one another fosters a natural order that is sufficient for individuals to thrive in.

The Rule of Law

Libertarianism does not advocate that individuals act however they wish and that nobody should be able to intervene. Rather, they propose a society of liberty under law (Source). Individuals may pursue their own lives however they intend so long as they do not impede the equal rights others. “The rule of law means that individuals are governed by generally applicable and spontaneously developed legal rules, not by arbitrary commands; and that those rules should protect the freedom of individuals to pursue happiness in their own ways, not aim at any particular result or outcome” (Source).

Limited Government

“Power tends to corrupt and absolute power corrupts absolutely.” These words by Lord Acton are dearly held by libertarians who wish to decentralize and limit government. Usually, this is accomplished by a written constitution that narrowly defines the powers and duties of a government as granted by its people. A government is granted power by its people and people should never fear their government (Source).

Free Markets

The right to property includes the right of individuals to exchange any property by mutual agreement. Libertarians believe that people will be more free and prosperous if governments minimize their intervention in individual’s economic choices (Source).

The Virtue of Production

The bulk of libertarian thought began in reaction to seventeenth-century monarchs and aristocrats who made their wealth from the productive labor of “lower class” individuals (Source). Libertarians hold that there is immense dignity in labor and that producers are entitled to the right to keep the fruits of their labor. Thomas Jefferson said in 1824, “We have more machinery of government than is necessary, too many parasites living on the labor of the industrious.” Today, libertarians see a new class of bureaucrats robbing the middle class through taxes and giving the wealth to non-producers (Source).

Natural Harmony of Interests

Libertarians believe that in a peaceful and just society, the individual’s interests have a natural harmony with others in the society. The market may deem an individual’s interests unfeasible and so that individual must adapt, yet still there is harmony. It is only when governments begin to offer handouts to specific parties based on political pressures that conflicts of interest arise and people begin to behave in unjust ways.

Peace

“Throughout history, war has usually been the common enemy of peaceful, productive people on all sides of the conflict” (Source). Libertarians recognize that conflict and war never benefit the common people and almost always benefit the elite in a society.

As David Boaz recognizes, these values tend to encompass the span of modern political thought in the western world. Libertarianism is not just a collection of these broad principles, it strives to apply them to the fullest extent, more radically than modern thinkers and governments intend. However, every day new exceptions to these principles are being made by Washington and Wall Street alike that threaten individual rights on every level.