1.1 Namecoin: Adapting the Block Chain
Bitcoin frees money – Namecoin frees DNS, identities, and other technologies (Namecoin 2016a)
The emergence of Namecoin reveals the immediacy with which those
discovering Bitcoin were adapting
it to serve other purposes. Emerging shortly after Bitcoin itself,
Namecoin was developed by a
group of open source enthusiasts that had become interested in Bitcoin as a tool for limiting institutional power
and started to frequent the BitcoinTalk forum.59 Namecoin remodels Bitcoin as a database
for domain name registration, allowing internet users to register domain names on a block chain and circumvent
established certification authorities.
The rationale behind this is to improve ‘censorship resistance’ and thus ‘free’ internet users from the influence of large
organisations. In this way, Namecoin’s developers argue it can ‘decentralise’ power on the internet as it offers a domain name system (DNS), as well as other potential systems, in
which there is no central authority holding sway over the network. This case study examines the motivations of two
Namecoin developers in relation to
design choices made in the development of Namecoin. The first section, 5.1.1, shows how the interests and beliefs of
these developers converge around an understanding of the internet
as a force for emancipation, and how this stems in part from interactions with various technologies that enhance
user privacy and thwart surveillance programs. For Namecoin’s developers, users of the internet are free when they
are unimpeded by the interference of
institutions and organisations. Correspondingly, many digital technologies are defined as a tools for limiting the
power of ‘centralised’ organisations, and this equally applied to Bitcoin.
In the second part of this case study, section
5.1.2, the design
choices
 |
59 Namecoin’s initial design
was first posted
to BitcoinTalk, original
posting available here:
bitcointalk (accessed 12/04/17)
made in Namecoin’s development are analysed. This ‘technical code
analysis’ reveals how Bitcoin was
adapted to assist the goals of its developers, a process which reconstructed
the block chain to serve as a
decentralised database, impervious to government censorship. Other aspects of Bitcoin however, such as
its ‘mining’ incentive structure, were retained in the development of Namecoin, and this was primarily because they
were compatible with the ideological
aims of Namecoin’s developers, and not for reasons of efficiency. Ultimately, I argue that Namecoin demonstrates the
interpretative flexibility of Bitcoin and the crucial role played by values
in its technical development.
5.1.1
Interests,
Beliefs, and Practices
Namecoin’s lead developer, Jeremy Rand, is a software engineer based in
Oklahoma and he contextualised his
involvement with Namecoin by describing his longstanding interest in open source projects
and the security of computer
systems. Having tinkered
with the software in his computer games as a child,
as a teenager Rand encountered open source software
as a means of pursuing this curiosity. Open source software appealed to Rand as
it allowed him to ‘audit’
its levels of security, ‘to really know if it behaves as advertised’. Rand’s
fellow Namecoin developer, Daniel Kraft, similarly
championed open source software, having voluntarily worked on open source projects
for some years before contributing to the development of
Namecoin. Key to their motivations regarding open source was the idea that transparency fosters
security. The possibility to inspect the technical architecture of a computer
program is seen to preclude
the need to trust in organisations
to secure data. After expressing suspicions that Skype conceal programs for surveillance in their source code, Rand stated
If the source code is open, at least there is a possibility that it will get audited,
and I think that’s a prerequisite to software that people can actually use with confidence.
For Rand, open source software reduces the reliance of individuals on
legal frameworks and the security
measures of organisations. Instead, individuals are able to take responsibility for security by ‘auditing’ its code themselves. This ethic of individual responsibility, and a
general distrust for centralised authority, was also evident in Rand and
Kraft’s efforts to maintain internet privacy.
Internet privacy was a major priority for Rand. ‘Before I was involved in
Bitcoin,’ Rand explained, ‘I was
familiar with Tor. I had run a Tor bridge at my house for quite a while. During the Arab spring I was getting
thirty or so Syrians using my Tor bridge every day’. Tor, an acronym for The Onion Router, is a free software service for anonymous web
browsing. It achieves
privacy for its users by directing internet traffic through a network of ‘volunteer-‐ operated servers’ which act as a ‘series
of virtual tunnels’, concealing a user’s location and usage (Tor Project, 2017). Rand was running Tor on his personal
computer, volunteering his computational
power to a network that spoke to his principles regarding privacy. Internet users should be free to communicate, Rand
stated, without the interference of powerful
organisations and nation
states.
Daniel Kraft had also been using Tor prior to his discovery of Bitcoin, a
practice he had long maintained out of
a desire for private internet
browsing:
In some
sense
I
feel
a
little
crypto-‐anarchistic. I’ve also been using Tor
for most
browsing since before Snowden came out, as well as email encryption and stuff
like that […] I just enjoy trying to preserve my privacy as much as possible.
Motivated by this desire to preserve his privacy, Kraft discovered
Bitcoin in its early stages and was
‘just fascinated by the prospects of Bitcoin, including the understanding of
how the block chain worked’. What appealed to Kraft was the way in which Bitcoin allowed
individuals to make transactions without any overseeing authority: ‘I
got interested because of the “no
central authority money” idea, which I liked’. Kraft was interested in the
potential for a financial system to provide privacy, consistent with
his interest in privacy-‐enhancing
internet technologies more broadly. Without
a central authority
recording transactions, end-‐to-‐end encryption could
provide a
network for exchanging financial information privately.
Active engagement
with privacy-‐enhancing computer programs
also
led
Rand
to
Bitcoin.
Rand had first learned of Bitcoin through a friend, who had piqued his interest
by describing Bitcoin as an ‘anonymous currency’:
[A friend] sent me a link to Bitcoin.org and I thought this was a kind of
cool concept, although as we later
found out Bitcoin isn’t really anonymous but, you know. And basically, you know, banks have caused
havoc in the economy around the world so the
idea of a financial system that
doesn’t need banks kind of appealed to me.
Rand was fascinated with the technical architecture of Bitcoin: an open source,
‘pseudonymous’ network, encapsulating his two chief concerns, online
privacy and security, and articulating them in a way that spoke to his principles concerning the limiting
of institutional power. While
he saw the appeal in extending this logic to financial institutions, he emphasised that his motivations did not
involve any particular economic concerns prior
to his encounter with Bitcoin, and this acts as a key distinction
between Rand and groups of Bitcoin
enthusiasts chiefly motivated by constructing an electronic currency
independent of nation states.
Before I got involved with Bitcoin I had never really given much thought
to economics, it wasn’t really
something I had much interest in. To some extent that is still the case, I wouldn’t say that I am knowledgeable
about economics in any way, but I think the existence
of Bitcoin has been useful for demonstrating that some of the economic principles that are often cited by people that, you know, want the banks to run everything for example, are not the only way to do things.
Engaging with Bitcoin introduced Rand to particular ways of understanding
how economic systems function,
demonstrating that financial institutions are not necessarily required, that many of their services may be replaced by
‘decentralised’ technologies such as Bitcoin. It is possible here to see the way in which Bitcoin can function as a mediator, a technology which carries and transforms particular
meanings. As outlined in the previous chapter, challenging the authority of financial and state
institutions was an ideological imperative that shaped Bitcoin’s construction and was subsequently ‘condensed’ with technical
logic in design.
For
Rand, Bitcoin as a technology demonstrated
the viability of certain economic principles. The meanings assigned to Bitcoin in its construction are here presented
back to a user in technical form.
In a word, Bitcoin had demonstrated to Rand that stateless currencies work.
After his discovery of Bitcoin, Rand started to ‘mine’, setting his
personal computer to the task of
processing data on the Bitcoin block chain, earning Bitcoins he then used to
purchase computer parts online.60
Encountering Bitcoin introduced Rand to a new way of exchanging value, and consequently a new way of
thinking about economic systems. His main priorities however, remained privacy and the limiting of institutional
power, and this was reflected in his engagement with the BitcoinTalk forum.
After discovering Bitcoin, both Rand and Kraft began to frequent the
BitcoinTalk forum, where they came
across Namecoin. Rand explained that discussions about how Bitcoin technology could be used to provide a
system for registering domain names started among some of the first people to encounter Bitcoin, and included the
pseudonymous author of Bitcoin’s initial
white paper, Satoshi Nakamoto. A group of developers on BitcoinTalk, were interested in this potential for Bitcoin
technology and started designing ‘BitDNS’,61 outlining a new
purpose for Bitcoin technology that
would result in a new block chain:
[Namecoin is] not using the Bitcoin block chain, this is mainly because
when Namecoin was first proposed, at
the time it was called BitDNS, Satoshi Nakamoto who founded Bitcoin basically said it doesn’t make
sense to have this in the Bitcoin block chain
because then basically, people who just wanted to do currency would then
have to download all that extra data
and people who just wanted to do Namecoin would have to download the currency
data and that wouldn’t be good for scalability. And so basically
Satoshi suggested that Namecoin use a separate block chain but with merged mining
so that both of the block chains would benefit from the mining hash power.
|
60 As described in the previous
chapter, Bitcoin mining
requires increasing amounts
of computational power as the block chain grows. In 2010,
Rand was able to ‘mine’ using his personal computer as the amount
of processing power necessary
was still, in his words, ‘crazy low’.
61 These discussions are publicly available, archived at bitcointalk
On the advice of Nakamoto, Rand claims, those proposing BitDNS began
working on their own block chain: a
program for recording information exchanged via cryptographic keys, in which authentication of information is
achieved by the aggregated efforts of independent nodes in the network, the process known as ‘mining’. Rand states
those working on BitDNS were seeking
to adapt Bitcoin to serve a new purpose: a block chain that would primarily record information concerning domain
names. BitDNS was shortly renamed Namecoin by
the lead developer at that time, ‘Vince’, a pseudonymous character that,
like Nakamoto, disappeared without revealing his/her real-‐world identity.62 The subsequent development of Namecoin was taken up by
enthusiasts such as Rand, for whom the necessity to register internet
domain names with ‘centralised’ organisations
was problematic.
Domain names were important to Rand as they denote authority on the
internet, identifying an Internet
Protocol (IP) address
space with a particular name, and the administrative autonomy of whoever registered that name
over that domain. Registering a domain name can
be done through numerous registrar organisations, all of which are authorised
by the Internet Corporation for Assigned Names and Numbers (ICANN),
a non-‐profit organisation that operates a ‘private-‐public partnership’ to promote ‘operational stability of the internet’ through ‘bottom
up
consensus-‐based processes’
(ICANN,
2017).
This
is
problematic for developers of Namecoin, as ICANN represents a ‘centralised’
operation, requiring all domain name
registration to go through one single organisation. This understanding of and
distrust for ‘central authorities’
on the internet echoes the cyber-‐libertarian ideology of early Bitcoin
enthusiasts, as outlined in the previous chapter. A proposal to use Bitcoin
technology to further ‘decentralise’
the internet by making another ‘centralised’ organisation obsolete is therefore largely consistent with the
original rationale for Bitcoin itself. This consistency is evident in the motives of Namecoin’s
developers, and in their interactions with Bitcoin technology. However, there exist significant differences that
underpin their commitment to adapting Bitcoin.
|
62 “Vince, like Satoshi, never revealed his real-‐world identity and disappeared around the same time, leaving Namecoin project wild in the open, to flourish only thanks to the help of enthusiasts in the FLOSS community.” namecoin
Both Rand and Kraft distinguished themselves and their interests from
those using Bitcoin as currency, and distanced themselves from the more radical Cypherpunk aims of using technology
to take down or replace nation states. Instead, Bitcoin was defined as one of many technologies that may limit the capacities of governmental power to acceptable levels:
I don’t identify as an anarchist or anything like that, I actually
identify as a liberal, so I think
that government has a role to play, I just don’t think that role should involve bailing
out the banks who crash the economy
and prosecuting Wikileaks and things like that, that are not in the interest
of the public, and are instead only in the interest of the powerful
(Jeremy Rand).
For Rand, digital
technologies represent a means of reining in the excesses
of state power by
providing the public with tools to circumvent censorship and suppression. Where
laws seemingly fail to protect
the interests of the public,
the public may turn to digital technologies. With reference to the
economy, Bitcoin achieves this as it allows individuals the means for financial exchange outside of governmental
restrictions. Rand expressed such instances
in terms of ‘censorship resistance’: ‘I like Bitcoin because it is censorship
resistant, no one can tell you you
can’t send money to this undesirable person or something like that’. Similarly, Namecoin ‘frees’ individuals
and technologies from governmental authority by providing a domain name system that, unlike ICANN, cannot be subjected
to political pressure. As Rand stated,
I think that if systems like Bitcoin or Namecoin can basically act as a
check on that capacity of government,
sort of like how the courts are supposed to act as a check on the executive branch, I think that if the
laws of math can act as a check on government
power I think generally
speaking that’s a good thing.
Rand here speaks neutrally of ‘the laws of math’ that govern Bitcoin and Namecoin, networks run on the same block chain based
algorithm. As discussed in the previous chapter however, the functionality of this algorithm is ultimately
founded on market rationality: for the network to function, an increasing
quantity of profit-‐seeking individuals must compete
for rewards in Bitcoin, and this maintains the network. This rationality
is here depoliticised and concealed
within a neutral scientific discourse, affirming Bitcoin’s capacity as a mediator
of neoliberal meanings.
The chief concern
for Rand however,
remained censorship resistance, and this signifies the key
distinction between his values and those of Bitcoin’s developers.
Daniel Kraft shared Rand’s commitment to censorship resistance as the key
motivation for developing Namecoin,
stating that Namecoin
‘enables organisations like Wikileaks to prevent
seizure of their domains, like Bitcoin allowed them to circumvent the payments blockade’, referring to the action taken
by prominent financial institutions in 2011, under pressure from the US government, to restrict donations
to Wikileaks.63 Support
for Wikileaks is significant here, with both developers citing
it as a motivational factor
for engaging with Namecoin and a prime example for its purpose.
Wikileaks shares an ideological heritage
with Bitcoin, part of a ‘movement’ that stretches back to ‘the cypherpunk drive to destroy
institutional secrecy’ (Greenberg, 2012: 321) and achieve justice by minimising the power of
governments to do things their citizens do not know of (Morazov, 2011). As
Beyer (2013)
notes,
Wikileaks represents a
strand of cyber-‐
libertarianism which, along with the Pirate Party movement and groups of Anonymous hackers, focus primarily on ‘freeing’
information from institutional authority. This represents a bifurcation in cyber-‐libertarianism, with the practices of such groups distinguishable from the anarcho-‐capitalist goals of
constructing
and
promoting
stateless currencies. Alongside organisations such as Wikileaks, Namecoin forms
part of
this
bifurcating
strand of
cyber-‐ libertarian activity
that focuses on diminishing the control of institutions over flows of information. This somewhat subtle difference in values and goals to those developing Bitcoin, as well as the
consistencies, shaped the
design and development of Namecoin.
5.1.2 Design and Development
So far this case study has focused on the interests, beliefs and
technical practices of two Namecoin developers. This section outlines
their involvement in Namecoin’s technical
development, with particular
focus on lead developer Jeremy Rand. The design of Namecoin
 |
63 wikileaks
is then interpreted with reference
to the values and goals of its developers. What is revealed in this account of adapting
Bitcoin technology, is that the values of its developers led them to reconstruct one aspect, the block chain, to further
their goals of ‘freeing information’ by limiting the capacities of centralised organisations. Another technical feature
however, the mining incentive structure, was maintained in the design for Namecoin,
and again this is shown to
have been a decision
primarily driven by ideology.
When using Bitcoin in late 2010 and learning about its applications,
Jeremy Rand discovered Namecoin and
was immediately intrigued by the application of Bitcoin technology to serve another
purpose.
When Namecoin came out – I heard about it roughly around the time it came
out maybe a little bit afterward – I
thought, this is kind of cool, it’s interesting that you can use the block chain for stuff other than
financial stuff, but I didn’t get actively involved in Namecoin at that time […] I came back to Namecoin maybe a
year or two later and I noticed that there was a disparity between the capabilities Namecoin could have based
on its architecture, and the
capabilities implemented for use by
the masses.
Rand’s interest was in Namecoin’s stated potential to provide
‘decentralised’ domain name registration,
‘so you can have HTTPS without certification authorities’. Bitcoin had made ‘decentralisation’ possible via its block chain and mining functions, demonstrating the possibility for a
monetary system without banks. Rand was interested in how Namecoin applied this logic to domain name systems.
On inspecting its source code however, he noticed there were no implementations of this that most people could use.
There weren’t a lot of really good implementations of even the DNS that
you could use in a trust-‐free way. A lot of people were using DNS servers
run by third parties, which, if
you’re going to be do that you
might as well not be using Namecoin.
Rand echoes here the key claims made in the Bitcoin whitepaper: that the
best way to secure a computer network
is to replace ‘third party’
organisations with ‘decentralised consensus’, achievable via Bitcoin’s ‘trust-‐free’ mining
process.
Seeking to maintain
the trust-‐free, decentralised
aspect of Bitcoin technology for Namecoin, Rand
contributed to a ‘Bitcoin bounty’:
an amount of Bitcoin promised
to any developer that could
implement the features that would allow Namecoin users to have HTTPS domains without requiring certification
authorities. Ultimately, Rand found a solution to this himself, and wrote new lines of code for Namecoin:
And so I released an initial beta in June 2013 and I basically claimed
the bounty that had been posted. So
one of the Bitcoins was mine so I got two Bitcoins out of the three. But yeah, one of the guys who put
up the money for the bounty basically told me
it would be cool if you could stick around and keep developing stuff […] So
yeah that’s what got me involved in Namecoin.
This was Rand’s first contribution to Namecoin, and he continued
to contribute to its development, ultimately becoming its lead developer
through the frequency
of his contributions. Improving Namecoin as a ‘decentralised’ DNS was
Rand’s chief motivation, and it is
important to note that this often presented obstacles when attempting to make Namecoin more
user-‐friendly.
As Rand explains in a report on the Namecoin
website, ‘Namecoin makes a number
of design tradeoffs in order to achieve
decentralisation,’
Compared to [conventional] DNS, Namecoin has significantly worse security
against run-‐of-‐the-‐mill malware,
significantly worse privacy against your nosy
friends/neighbours/employer, and significantly worse resistance to squatting and trademark infringement, to list just a few. (Namecoin 2016b)
These downsides, Rand explains, are considerable problems that need to be
resolved, yet are worth solving in
order to achieve a decentralised DNS. This commitment to the concept of decentralisation was the primary
drive behind Rand’s design choices,
and this was predominantly an ideological commitment.
In a technical sense, Namecoin
achieves decentralisation in precisely the same way as Bitcoin.
Decentralisation in this way means the removal
of the necessity for central
authorities to process and store data. As outlined in the previous
chapter, this is achieved in Bitcoin’s
design via the ‘blockchain’ and ‘mining’ functionalities, in which data is
encrypted, broadcast to the network,
and then processed via the aggregated efforts of independent nodes in the network. The people running
these nodes are incentivised to do so with the
promise of a potential reward in Bitcoin,
new units of which are released by a predetermined algorithm for this purpose. Bitcoin
therefore offers a ‘decentralised’ monetary
system, as there is no central authority
processing financial information or regulating monetary
policy. Namecoin retains these two principal aspects of Bitcoin’s design to achieve its own project for
‘decentralising’ domain name registration, changing very little of Bitcoin’s
codebase:
The Namecoin codebase
consists of the Bitcoin codebase
with relatively minor changes (~400 lines)64 and additional functionality built on top on it. The mining
procedure is identical but the block chain is separate, thus creating
Namecoin. This approach was taken
because Bitcoin developers wanted to focus almost exclusively on making Bitcoin a viable currency while the Namecoin developers
were interested in building a naming system. Because of the different
intended use cases between the two
projects, consensus and protocol rules might make sense in one but not the
other (Namecoin 2016c)
The relatively few changes made to Bitcoin’s codebase mean that Namecoin
also functions as a crypto-‐currency,
producing a steady
but
finite
supply
of tokens that are rewarded to ‘miners’ and can be traded among
users. As with Bitcoin, the ‘trading’ of tokens actually denotes the broadcasting of new values assigned to the addresses
(‘public keys’) of two users, information which is encrypted
via a unique hashing process
that makes it possible for the network to authenticate that it was indeed signed by both users involved;
to record it on the network’s ledger (‘block chain’); and to ‘time-‐stamp’ the data with another hash function so it cannot be tampered with retrospectively.
The first significant difference with Namecoin is that there are
‘additional commands for special transactions containing names and data’ (Namecoin
2016c). This means that, while
|
64 The tilde symbol
here means ‘approximately’.
users can continue
with the currency-‐trading function
offered by Bitcoin, the Namecoin network will also recognise a
different type of transaction which denotes the ownership of names and the IP address spaces associated
with them. For a user to register a domain name,
they must obtain two addresses (public keys) and a ‘special’ coin in the
network that is recognised for ‘namespace’ data. When they exchange this coin between
their two addresses, the information it contains will be broadcast to the network, recorded and time-‐ stamped.65
A key aspect of this design choice, as made clear in quotes above, is the
conscious decision to create a new block chain for this data so as to
not interfere with the design of Bitcoin. The
added features designed for Namecoin could have been added onto Bitcoin
itself, using the same block chain,
challenging its purpose and primary functionality. However, there was dialogue and consensus among the
developers of both Bitcoin and Namecoin that Bitcoin should persist as a currency system, offering users an
alternative ‘decentralised’ form of money.
This technical choice represents a distinction between the aims and activities
of those developing Namecoin from
those developing Bitcoin. This distinction is manifest in the construction of a separate block chain,
yet the remaining values shared between the two groups is evident in
the other major design choice, to construct ‘merged mining’.
In the Bitcoin network, data processing is done by independent nodes
incentivised to offer their
computational power to the network via rewards in Bitcoin. Namecoin operates in
the same way, offering units of
Namecoin as a reward for independent nodes. However, as Jeremy Rand stated,
‘we don’t encourage
people to use Namecoin as a currency,
we generally tell people they should have used Bitcoin or some other currency-‐aimed coin as currency’. Rand discourages the use of
Namecoin as a currency to maintain its primary
function as a domain name registration system. Coins on the Namecoin
network should be primarily exchanged
as a way of broadcasting domain name information. The reason Rand can advocate this without simultaneously discouraging nodes from contributing to the maintenance of the network,
is due to Namecoin’s ‘merged
mining’ function. As Rand explained,
|
65 For more technical
detail on Namecoin’s design, see Kalodner
et al (2015)
[Namecoin] is using a separate
block chain, but it uses something called merged mining, which basically means that when
someone is mining Bitcoins, they can use the
same hash power that they are already
expending, to also mine Namecoins
in addition.
Rand explained how this feature
of Namecoin ‘boosts
the security of the system’
by connecting its hashing
process to that of Bitcoin. This design choice reveals a consolidation of interests around the ‘decentralised’
features of Bitcoin’s functionality. As outlined in the previous chapter, built in to the mining incentive structure
is a deflationary measure designed to generate value, following an
understanding of money as a commodity, like gold, where value emerges due to the intrinsic features of an entity.66 These meanings assigned to Bitcoin are
not shared
by
those developing
Namecoin:
the
units
of ‘crypto-‐currency’ generated in the Namecoin
network are not designed for the purpose of creating value through scarcity. Instead, they are
designed as tokens detailing the ownership or authorship of particular pieces of information. Nevertheless, as
Namecoin’s developers share a similar concern to their Bitcoin
counterparts regarding the ‘decentralisation’ of authority in computer
networks, the incentive structure of Bitcoin represents a convenient means of ensuring the continual maintenance of the
Namecoin network. In this way, the interests of both groups are satisfied by Bitcoin’s ‘mining’
feature, representing a stabilisation of meanings attached to the artefact among its early
users.
5.1.3 Summary
|
The development of Namecoin illustrates the interpretative flexibility of Bitcoin, and how it may be adapted to serve interests beyond those outlined in its initial construction. Primarily motivated by aims to reduce the authority of powerful ‘centralised’ organisations over digitally-‐mediated communications, Namecoin’s developers constructed a new ‘block chain’ to record and authenticate the ownership of domain names on the internet. Jeremy Rand and Daniel Kraft had encountered Bitcoin and were introduced to its unique way of
66 For more detail on this monetary theory
and how it sits alongside
other, more established theories, see Dodd (2014).
authenticating and securing data. What intrigued both developers was the
novel way in which security and
privacy could be achieved without the need for an overseeing authority. The absence of such authorities was seen
to provide freedom for internet users: freedom
from organisations that monopolise information flows, freedom from surveillance, and freedom from censorship.
For Rand and Kraft, both Bitcoin and Namecoin advance the same goal for
internet freedom, and in this way constitute emancipatory tools similar to those they had engaged
with previously, such as Tor.
Their interests and past experiences thus shaped their usage of Bitcoin
and in the process this contributed to the development of a new variant, a new ‘block
chain’
to
record non-‐financial information,
stored
and
secured
on servers across a peer-‐to-‐peer network.
An
analysis
of this development
also
reveals
how the interests
of Namecoin and Bitcoin developers
converged around the ‘mining’ feature of Bitcoin. This feature of Bitcoin
satisfied the goals of both groups to establish networks
in which information was ‘free’ from the authority
of centralised organisations. For Bitcoin developers, such organisations were financial and state institutions, for Namecoin developers, ICAAN and its model of
authorising all internet domain names constituted the challenge to
overcome.
1.2 Faircoin: Rejecting the Mining Incentive
Structure
All current cryptocurrencies require you to buy the coins, either through mining or through
exchanges. This gives the
advantage to those who already have capital and mining equipment, and can afford risky investments. Faircoin is the first project
where the coins are not bought but rather distributed equally between everyone
who wants them regardless of their
current financial status, and promotes equality (Fair-‐coin 2015)
FairCoop is a cooperative project which aims to address social inequalities
through the construction of an alternative economic system founded
on cooperation rather than competition. At the heart of this project
is a radically redesigned version of Bitcoin. As proclaimed on
its
website,
FairCoop is a global
or ‘earth’
project, ‘self-‐organised
via
the
Internet’ with the aim of ‘remaining
outside nation-‐state control.’67 FairCoop does however
have its roots in a particular social context. Founded by Enric Duran, a
prominent activist in the Catalan
anarchist movement, FairCoop was established as a new phase in the ‘integral revolution’ which was to demonstrate the
possibility of prospering outside the capitalist system. In 2008, days after the Lehman Brothers bankruptcy,
Duran had ‘expropriated’ hundreds of
thousands of Euros from Spanish banks, taking out loans with no intention of repayment. Instead, Duran used the money to fund projects in the Catalan
anarchist movement before
absconding the country. One of these projects was Cooperativa Integral Catalana (CIC), of which Duran is a founder:
An Integral Cooperative is a tool to create a grassroots counter-‐power departing from
self-‐management, self-‐organisation and direct
democracy…
It
is
a
constructive proposal for disobedience and widespread self-‐management to rebuild our society in a bottom-‐up manner (in every field and in an integral way) and recover the affective
human relationships of proximity based on trust. (CIC 2015)
This aim of
building trust among networks and communities is shared by the many activists collaborating within CIC, and in the later project
established by the same network
of activists, FairCoop. As one
activist, Juanito Piquete, explained, their activities continue the historical principles of the anarchist movement, those of ‘solidarity, self-‐management,
and mutual support’. As outlined in the previous chapter, Bitcoin was
primarily designed as a means of
replacing the necessity to trust institutions. A computer program maintained by the efforts of its users would instead
perform the functions
of an idealised monetary system. For Bitcoin’s initial developers
this ideal reflected principles of individualism and theories of self-‐regulating markets that inspired its early developers.
Users
of the Bitcoin network
would be incentivised to contribute
to
its
maintenance via rewards in its in-‐built currency. The use of Bitcoin technology by Enric Duran and the Catalan
anarchists involved a
67 fair coop (accessed 15/09/17)
rejection of these principles, which in turn involved a ‘creative
appropriation’ of its technical features. Bitcoin is redesigned as Faircoin, a crypto-‐currency
technology with new technical features that reflect those of its
developers: cooperation over competition.
The case study of Faircoin presented here starts first by contextualising actors involved in CIC and FairCoop. This involves an
examination of the groups’ technical practices, as the group situate Faircoin within a broader range of
experimentations with forms of money and technology,
all aimed at constructing a fairer economic system. The second part of this
case study draws out the particular
technical features of Bitcoin that have been redesigned to align with the aims and interests of the activists. Drawing on Feenberg’s critical constructionist model,
I
argue that Faircoin
illustrates
a
potentially
counter-‐hegemonic
appropriation of Bitcoin, predicated on social deliberation and cooperation
among its users, thus radically subverting the neoliberal
principles imprinted in its design.
5.2.2 Interests, Beliefs, and Practices
Juanito Piquete has been an activist within Catalan anarchist movements
for decades. ‘I am an anarchist since
I was 15 years old and I am 54 now’, Piquete explained, ‘I have been an employee
exploited in the 70s and 80s, then I was a CNT [Confederacion Nacional de Trabajo]
syndicalist
and
also
of the anarcho-‐syndicalist
movement’.
The
CNT
symbolises both
the
endurance
of anarcho-‐syndicalism
in
Catalan
culture
and
the
sense
of ambition associated with anarchist projects. In
1936, the CNT successfully took control of factories, transport and land in Barcelona, signalling the start of a
revolution that was to end with the Spanish Civil War (Ward,
2004: 21). Under
Franco’s subsequent regime,
the organisation was
suppressed
but
continued to operate.
After Franco’s
death
in
1975,
the
CNT
re-‐ emerged
as a social movement and its numbers grew as workers such as Piquete were able to organise publicly.
This history is an important
contextualisation for the current activities
of Catalan activists, a point
Piquete was keen to stress from the outset:
I think it is not enough to talk about Faircoin only because we will only be talking
about the coin and this interview would not be accurate as the coin is just the medium.
Piquete joined CIC when it was first founded in 2008. At that time,
demonstrations were underway calling
for sustainable social systems and economic models. Piquete termed this series of actions ‘the march for decreixement’, the Catalan faction of a
new global social movement for
‘degrowth’. This movement drew the attention of social movement scholars, who identified ‘degrowth’ as a call for
activists to work with scientists and practitioners toward new socio-‐environmental futures
(Demaria et
al,
2013),
and
the
movement
established itself in Southern Europe in the years following the financial
crises (Muraca, 2013). In 2007
Catalan ‘degrowth’ activists had been working on projects for people to live independently of the capitalist system, a
system Piquete asserted was destroying the planet it is insatiable pursuit of exponential growth. The subsequent march would draw attention to ‘alternatives that people build outside the state,’ Piquete
explained, with ideas of sustainable ecosystems, of ‘permaculture
and other techniques based on the use of land but from a non-‐exploited point of view.’ It was to such projects Enric Duran gave the money he had expropriated from banks, and CIC was
founded as a result. Piquete described how this strengthened their focus on
constructing tools for post-‐capitalist communities:
I am a guy who comes from the Catalan anarchist movement but then joined
the CIC and started contacting Enric
[Duran] when I knew about the expropriations he had done. From this point, I realised there is a need for practical
tools among the Integral cooperatives. FairCoop flows from this experience.
Alternative currency initiatives were popular projects among the
activists. The necessity to pay
interest in dominant monetary systems was identified as a key driver of social
inequality and unsustainable growth.
FairCoop would come to represent an ambitious attempt to construct a range of economic tools, drawing on Bitcoin
technology, which people around the
world could use to opt out of capitalism. Prior to their discovery of Bitcoin,
CIC activists had established a community exchange
system (CES) among their social network. This
system was rooted in the local communities of Catalonia, and its success
inspired the later development of FairCoop. A key proponent of CES was Stefan Blasel.
Unlike the majority
of CIC activists, Blasel did not come from the Catalan anarchist
movement. He was a student of environmental engineering when the 2008
financial crisis hit. This motivated him to learn more about
economics:
After the crisis of 2008 and nine I was constantly investigating, where
does the crisis come from? So I was
reading lots of books, lots of articles on the Internet, and then I came across the money thing, and for me
the way money is produced together with unequal
distribution of properties – I think it’s like two percent of the population
owns sixty percent [of private
property] so it is very unequal – that was my motivation to get involved with the economy and to
research a little bit about what is happening.
Blasel started to read about local currencies, and the differences
between forms of money. What struck him was the lack of information available, ‘I don’t like these conspiracy theories, but there is something strange
that so little information is done in our education system to teach how the money system is working’. The monetary
system lay at the heart of social inequalities, Blasel explained. As more and more money is created
as credit by financial
institutions, the interest charged effectively transfers wealth from those with
few assets that rely on credit, to
those with the most assets who are in a position to profit from credit expansion. As the financial system
is predicated on continuous growth, this process has persisted despite the problems it causes. The requirement to
pay back more than is borrowed has,
Blasel explained, turned money into a market which demands permanent growth. Money does not have to be like
this, Blasel asserted, and local currencies, which allow members of a community to exchange goods and services
without paying dues to financial institutions present a solution
for those trapped in dominant
monetary systems:
In the local currencies there is no interest. That’s one of the common
points of all local currencies,
there’s no interest. So whenever you buy something, there is no bank or banker who gets enriched. For me that is a
basic thing because I think the interest, for
me, is one of the basic things which encourages, which needs permanent growth. As I
see that the planet is limited, that resources are limited, for me
permanent growth is impossible. So I
am looking for a financial model which makes it possible to live well but which
works without permanent growth and that is without any interest.
On discovering CES during his internet research, Blasel immediately got
involved, becoming the eighteenth
person to join the growing network. CES quickly became the most successful and widely used currency project
among the increasing number of CIC activists. Blasel
estimated that 2000 members across Catalonia were actively using the
system. The central server is
maintained, Blasel explained, by a software engineer and activist currently
residing in South Africa, with another
back-‐up
server
located
in
Australia should
anything
go
wrong.68
Blasel travelled to Catalonia and began his interactions on CES as a
regular user. ‘I offered certain services,
so for example, I always offered translation services between English,
Spanish and German.’ Before long, Blasel was offering his services as an
educator on local currency systems.
He established workshops where people could learn how CES works, what its benefits are, and of the flaws in
dominant forms of currency. This appealed to many in post-‐crisis Catalonia, and
Blasel explained why:
Every product which we buy in the normal economy we pay around 40% more
just because of paying the interest
and the compound interest in every product. And when people understand – [and] they have good motivation to start
asking – they [become] clients to
sell their services and products for Ecos. Because finally it should be
cheaper, the prices in Ecos should be cheaper because there is no interest.
An ‘Eco’ is a unit of currency in the CES system, and recently, Blasel
explained, Ecos are backed by food.
‘Since one year, more or less, we have sold on a list of food, like rice, like wine, like onions,
oranges, mostly dry stuff, 100% for Ecos in order to back up the Eco’. While anything can be offered for
exchange on the CES system, this reserve list of food means members are assured their Ecos will always be accepted as payment for a particular
|
68 Between
the time of this interview
(June 2015) and the time of writing (November 2016) Blasel has claimed that the majority of CES
users have moved to a new version that has been specifically made for CIC, Integral CES.
range of foodstuffs. Established relations
between agricultural workers
within the CIC network make this possible.
These relationships are founded on trust built over time, a point Blasel emphasised as crucial to the
CES system when describing the content of his
workshops.
Blasel explained that his workshops focus on the basics of using CES as a
technical system. One of these basic
requirements is for members to publish feedback each time they use the system. These references, Blasel explains,
are the foundation of CES as a currency system as they build trust
between users:
I just tell them the basics, what they really need. They need to create
something, create an account – which
is possible in Spanish and in Catalan now. They need to know how to charge when they have done a service, how to charge
another account. They need to know
how to evaluate the service they have received, whether it is good or bad because the feedback is a very
basic feature in the CES. And for me talking
about references – you surely know couch surfing? For me the referencing
in couch surfing is a form of local currency, of a trust
currency.
CES is a system founded on relations
of trust among members. References
allow members of CES to record their exchanges and establish a reputation among other users of the network.
This underpins the value of Ecos. The more people use the system, the more
trust grows between members, and the more valuable CES becomes. This defines CES as a form of money for Blasel:
All money is based on trust, no? Because all money is debt, so it’s
always about whether I get my debt paid back one day.
Blasel described how the processes in which relations of trust are
established between members of the network
are far more important than any technical
components. ‘The computer
is not the most necessary
thing,’ Blasel asserted.
Building relationships and networks
of trust is the purpose of the system, the other components are tools to
facilitate these relationships:
For me the basic thing is not so much about the technology and how to
open it and how to change it. For me,
the basic thing is that people get to know [each other] and develop trust in local people in their barrio, in their neighbourhood, who
offer and need services in Ecos.
Blasel’s workshops reflected
this emphasis on trust building. After presenting the basic functionality and purpose of the CES,
the main activities Blasel organised were to establish relations between attendees. ‘Apart from explaining what CES is,
I spend a long time making a social
dynamic, a group dynamic, where people say what they need and what they can offer.’ This practical part of the
workshops, Blasel explained, is the part where participants truly learn how local currencies work. To
be able to arrive at agreements over the exchange of services and goods is the fundamental purpose of the CES. If this group
dynamic is achieved, ‘people can start exchanging directly,
or with the help of the CES’. Blasel’s aim is to establish these interactions between
members of a community. Whether they then use
the CES or not is up to them. Building trust through social interaction is the key.
First you need to have trust with a person and then you have to have
trust with a service or product. So
trust to the person is the first step, and then the second step, you need to know, in order to buy, that
trust, you need to know them. That’s why you
need to have some meetings of
the participants every now and then.
The relative successes of Blasel’s efforts in different contexts reflect
his conviction in social interaction
as a key component of any monetary technology. In areas with established lines of interaction within and between
communities, people attending
Blasel’s workshops took to
the system of exchange fairly quickly. These areas were predominantly rural. In
the urban areas of Barcelona
however, Blasel found it more difficult to establish the ‘social and group dynamics’ necessary for promoting the use
of the CES. Blasel claimed this contrast between urban and rural communities is a product of divergent lifestyles
and levels of familiarity with processes of exchange:
In the cities people are [more atomised], in theory they know each other
but then in the metro and in the bus they ignore the others because you would get overinvolved,
overwhelmed by the amount [of other people]. In the countryside there has
always been that sense of cooperation, no? And farmers
have always been using the exchange
mechanism to exchange things in quantities too a lot, for other things they needed. So for them it is quite a natural
thing. And if it’s not working with direct exchange and you have some currency
that is not interest based,
then even better,
you know?
Blasel expanded on this point, describing the dependency of urban
communities on financial institutions
and supermarkets, the increasing individualisation of activities, and the
declining role of community centres
in urban life. These conditions, he said, have hindered his efforts to start local currency initiatives. Of
the 2000 active CIC members using the CES, Blasel claimed only 500 were based in urban areas. Blasel was keen to
point out this was not for a lack of
interest, as alternative economic practices were gaining popularity in urban
areas. Rather, it was a practical issue due to the routines of urban life.
After the financial crisis, the use of time banks increased in Barcelona,
Blasel claimed. ‘The only difference with time banks is that you can only buy services whereas
with local currencies you can buy products as well as services’. Furthermore, increasing levels of political
activism had led to the election of Ada Colau as Mayor of Barcelona, a
prominent activist in the Platform for People Affected by Mortgages,
a movement that emerged after largescale
housing evictions in the wake of the financial crisis. As Blasel explained,
Colau channelled popular
interest in economic
alternatives during her election
campaign:
One of her proposals actually
was to create a local currency for Barcelona… Potentially, for the first time, in Spain at least, people
might be able to pay part of their
taxes in local currency. And [as] part of their social programs, people will be receiving
part of their social help in local
currency… That is the plan, let’s
see.
The desire for alternative economic
practices is a key political
issue in Catalonia, transcending the anarchist movement. A study by Castells et al
(2012) found that such practices, already
frequent in ‘alternative economic cultures’ that preceded the financial
crisis, have intensified and increased across the region in the years
following it.69 A key determining
factor in the adoption of these practices, Castells found, is the existence of social support networks. In this finding
Castells’ study provides some evidence for Blasel’s claim that trust is foundational to engaging with local
currencies: ‘Trust is essential to those engaging
in alternative economic practices, and trust is built by social support and
personal contact with networks of people with whom practice
can be shared’ (2012: 229). The increases in political activism across Spain in the wake of the financial
crisis have given rise to many new social support networks, and
Castells’ conclusive remarks draw an affinity
between the rise in alternative economic practices and that of the Indignados movement for this reason (ibid, 245). The founding of
CIC by Catalan activists in the wake of the 2008 financial crisis, and the broadening of their interests
in alternative economic
practices, mirrors this
pattern. Having started with CES, the CIC activists soon began working on a broader range of alternative economic
practices they hoped would become the foundation of an entirely new economic system, existing in opposition to
capitalism. These efforts were brought together as the ‘FairCoop’ project.
5.2.2 Design and Development
|
FairCoop is the result of activists associated with CIC encountering Bitcoin and endeavouring to redevelop it as the basis for an alternative economic system founded on the principles of the ‘degrowth’ movement. These principles, preceding their engagement with Bitcoin technology, had guided their use of the Community Exchange System. Correspondingly, the CES had demonstrated to the activists the potential for economic practices based on trust, cooperation, social interaction and sustainability. Furthermore, it demonstrated that such practices could function smoothly outside of state regulation and without financial incentives such as interest payments. These imperatives underpinned their efforts with the CES, mark out their activities within the broader context of economic activism in Catalonia, and were instrumental in how they understood and adapted Bitcoin. This section focuses on
69 Crypto-‐currencies are absent from Castells’ study. This is most likely due to the fact that data was collected between 2008 and 2011, Bitcoin emerged during this time and its use was largely limited
to small groups of internet users (see previous chapter)
this latter process,
tracing the development of Faircoin, from an initial
encounter with Bitcoin, through to a technical code analysis of Faircoin’s design.
Emerging from the degrowth movement, FairCoop focuses on improving social
relations within and between communities as the basis for sustainable economic practices. As Piquete stated,
It would be great if we can talk about the currency of a neighbourhood,
or a small city or village because it
generates support, common identity, collective empowerment, and the fact of being part of something
that makes you proud because it is for the common
good.
The key problem with local currencies for Piquete however, was that, in
spite of efforts to use foodstuffs as
a reference of value for the CES, its users ultimately measured its value against
the value of the Euro. This left local currencies vulnerable to same fluctuations of the
capitalist economy from which they were trying to escape. What was needed was a stable source of value which could act as
a reserve currency for local and social currencies, independent of nation states and central banks, yet also open to
direct management by all the members
of the cooperative. On encountering Bitcoin, Enric Duran and fellow activists saw the opportunity to develop
a
crypto-‐currency
for this purpose.
‘Faircoin aims to be a different reference,’ Piquete stated,
meaning an alternative reference for determining value, ‘we know that
this is a very audacious aim.’
Duran introduced Bitcoin to the CIC activists having met prominent
Bitcoin developer Amir Taaki, and having worked with members
of the P2P Foundation, a non-‐profit organisation dedicated to developing peer-‐to-‐peer technologies as a route to a ‘commons-‐based society’
(P2P Foundation, 2017). As Piquete
explained, FairCoop started
as a result of this collaboration,
FairCoop is an initiative of Enric Duran, Amir Taaki that comes from DarkWallet Collective, and the P2P Foundation. These are the three persons
or organisations that converge in
FairCoop and what they are trying to achieve is an economic system based in cooperation.
Bitcoin appealed to Duran and those at CIC as it appeared to demonstrate
how value could be generated and
stored independently of governments and financial institutions. Bitcoin technology, it was hoped, could provide an alternative reference
of value to state-‐issued, or ‘fiat’, currencies. However, Duran and his fellow developers had noticed how Bitcoin replicated problems they perceived with dominant forms of currency.
As explained on the FairCoop site, ‘currency has different functions,
among the best known are: medium of
exchange of goods and services; value storage; [and] reference value (price system)’ (FairCoop, 2014). Local
currencies separate these functions. The CES for example, offers a medium of exchange but no value
storage or price reference. As stated by FairCoop, dominant forms of currency condense these functions, which can
be problematic as money itself
becomes a market, encouraging speculative foreign exchange trading that
destabilises the value of currencies.
This can hugely benefit the speculators involved, but often at the expense of poorer, less powerful people
whose savings are devalued, and price references rendered too volatile. For those at FairCoop, Bitcoin also fails
to separate these functions of currency, resulting
in similar speculative trends. Furthermore, it is being increasingly incorporated into the dominant economic system:
The case of Bitcoin, because it is a cryptocurrency must be followed
closely as it evolves. So far it has
shown great success as a store of value over the long term, despite
fluctuations in the short and medium term, and it is growing
rapidly as a means
of exchange. Still, certain contradictions between both functions have been spotted as its growing acceptance by
businesses that turn it directly into fiat currency has put a significant selling pressure on the money market. With
FairCoop we plan to build an autonomous economic
system over the current system,
and for that we picture a set of free economic tools to
use in order to generate new social dynamics.
We’re building a series of coins and resources that play complimentary
roles, instead of trying to get a single currency to fit
all needs at once. (ibid)
The goal of FairCoop therefore, is to use Bitcoin technology as one
particular element in a broader range
of economic practices that comprise an entirely independent and alternative economic
system. This new system would be founded
not on capitalist principles of
competition, but on principles of communitarian cooperation. The role of
Bitcoin technology in this would be to store value. Yet Bitcoin itself could not be used for this purpose. Firstly,
as stated above, this is because Bitcoin
is increasingly being used by speculators and developed
for this purpose which renders its market value too volatile. Two further
reasons concern Bitcoin’s ‘mining’
functionality: it was considered environmentally unsustainable; and economically too ‘capitalistic’. For these reasons,
which are elaborated below, an alternative
crypto-‐currency was sought.
Faircoin existed prior to FairCoop, as one of the many alternative
crypto-‐currencies that had emerged after Bitcoin. As with Bitcoin
and Namecoin, Faircoin had been initially created by an anonymous developer who then left without a trace (P2P
Foundation, 2015). Duran and fellow developer
Thomas König came across Faircoin
and subsequently took up its development. They chose
Faircoin as it was
a
crypto-‐currency
that
had
been
designed
to
overcome the problems caused by Bitcoin’s mining function, which requires an
increasing amount of computational power to process the network’s data:
As the [Bitcoin] system has grown, along with the number of transactions, it is increasingly difficult to mine a block and
it requires more and more computing power, therefore becoming an ecological and economic issue (FairCoop 2014b)
As outlined in the previous chapter, Bitcoin’s functionality rests on a program called ‘proof-‐ of-‐work’ derived from Adam Back’s designs for ‘HashCash’. This part of Bitcoin’s design calls
on an expanding number of independent users in the network to process (‘mine’)
data in the hope of obtaining rewards in Bitcoin. This process is
predetermined to require more computational power as time goes on, a feature
designed to prevent
a user obtaining enough power to exert undue influence
over the network.70 This feature of Bitcoin is incompatible
with the ecological principles of FairCoop, which is founded on an ambition to create a sustainable alternative to the
permanent growth of the capitalist system. In the initial design for Faircoin, an alternative data processing
system was put forward, not one of ‘mining’ but one of ‘minting’.
|
70 See Chapter 4, section 4.3
Faircoin’s design builds on a process called ‘minting’ which unlike
‘mining’ can be done on a standard
personal computer, requiring less energy.71 The minting process is
referred to as ‘proof-‐of-‐stake’
rather
than
the
Hashcash-‐inspired
‘proof-‐of-‐work’. With
proof-‐of-‐work, computers are programmed to continually generate
hashes until one matches a hash generated by the core algorithm. The user
that generates this successful hash verifies and securely records the latest information broadcast on the block
chain, and for having done so receives
a
reward
in
Bitcoin.
With proof-‐of-‐stake,
users
in
the
Faircoin network
send
a
certain amount of ‘coins’ (digital signatures) to the network to be verified.
From among these users, the core
algorithm selects one node to verify and securely record the latest transaction information. Unlike Bitcoin, all users that commit this energy to the
network (via broadcasting their
‘coins’ for verification) are rewarded with a 1% increase to their holdings of Faircoin. This is the key adaptation of
Bitcoin made in the initial design for Faircoin, and it also changes the implicit monetary policy written into the
software. Whereas Bitcoin is programmed
to limit the total amount of Bitcoins created as rewards, Faircoin’s minting system offers its 1% rewards as continuous
‘interest’ for those contributing to the network, with no predetermined
end to the supply of coins.
The ‘minting’ aspect of Faircoin’s design diminishes the advantage held
by those in the Bitcoin network
that can afford to invest in all the hardware
necessary for ‘mining’.
Alongside its lower energy demands, this gave Faircoin an added appeal
for Duran and his fellow activists.
However, on presenting Faircoin as a potential economic tool to those at CIC and FairCoop, Faircoin
was deemed not to challenge
the capitalistic aspects
of Bitcoin enough,
and this led to the
redesigning of Faircoin by Duran and König. As Blasel explained:
They [Duran and König] made some changes
to eradicate the possibility of accumulating capital.
That means to gain something
with interest, because
many people in the
cooperative at the beginning were not very happy with FairCoin, for them it was too capitalistic, too similar
to Bitcoin, and they wanted to have something
which is more like local
currency.
|
71 The ‘minting’ function
was first devised
by the developers of Peercoin, information available here:
peercoin (accessed 27/04/17)
Although the initial version of Faircoin was much more acceptable to the
activists at CIC and FairCoop than Bitcoin, its ‘proof-‐of-‐stake’ system still rewarded users on the basis of assets
owned. Only those with a sufficient number of coins (a ‘stake’) can contribute
to the minting process, meaning
rewards (new units of currency) remain unequally distributed. For this reason,
Duran
and
König designed ‘Faircoin V2’ with
a
new
feature they called ‘proof-‐of-‐ cooperation’.
This adaptation of Bitcoin’s ‘mining’ incentive structure can be
interpreted with reference to Feenberg’s
theory as a ‘creative appropriation’: an instance in which users have innovated
a new function for a technology that
opens up new possibilities for both technical and social change. Feenberg’s work demonstrates the capacity for technological rationality to reproduce social
hierarchies via the exclusion of public interests from influencing the design of technologies, and this serves to reproduce
power as it maintains the privileged position
of those that can direct technical development. This technocratic power,
concealed by a veil of scientific
neutrality, privileges capitalist imperatives for control and efficiency.
Acting within what Feenberg terms the
‘margin of manoeuvre’, creative appropriations of new technologies can challenge this hegemony by opening technology
to critique, allowing new interests
and meanings to influence technology design. In the design for ‘Faircoin V2’,
Duran and König outline a model for
keeping the technology open for ongoing procedures of democratic deliberation and modification. This egalitarian imperative written into the design
for Faircoin V2 thus stands in contrast to technocratic power, which acts to
suppress deliberations and limit modifications.
Duran and König open their white paper for Faircoin V2 by explaining the
drawbacks of its initial design, namely that minting, like mining,
distributes value unequally:
Neither mining nor minting can truly be considered fair, because both confer an advantage on the already
rich. Therefore we decided to create a new version
of Faircoin which corrects these issues (Duran and
König, 2016: 1)
Faircoin, they stated,
would be designed
around principles of ‘cooperation, not competition’.
Their
solution
to
the
competitive and unequal
aspects
of previous
crypto-‐
currencies is a proposed system for ‘proof-‐of-‐cooperation’, as opposed to Bitcoin’s ‘proof-‐ of-‐work’ and Faircoin’s initial
‘proof-‐of-‐stake’ system. At the heart of this proposal is an idea to
maintain a trusted
group of reliable
users referred to as ‘certified validation nodes’ (CVNs).
These CVNs are ‘trusted nodes’,
users of the network whose usage has demonstrated their continued commitment to the network,
and therefore reliability to verify and record a block of transactions.
As opposed to Bitcoin and the previous version of Faircoin, in which the
user selected to validate network
data is done so by the algorithm
itself having met certain criteria,
in Faircoin V2 the CVN that
validates one block of data then chooses the
next one. They make this choice based on the past data usage of other available CVNs, a decision
which is broadcast to the rest of the network for
approval. The digital signatures of approving nodes are then collected by the chosen CVN, who inserts them into the
new block of data they are validating. Once this is done, that CVN then chooses the next CVN, and so the cycle continues.
The most significant departure from Bitcoin in the designs for Faircoin
V2 is the authority invested to
administrators and crucially, the answerability of these administrators to the cooperative.
While Bitcoin is predicated on
the
replacement of
human-‐run
organisations with algorithms, Faircoin demonstrates its commitment to the
communitarian values of the group it
is designed for, by allowing for ‘chain administrators’, members of the
FairCoop cooperative that hold the
responsibility of maintaining the network. As Duran and König explain, these administrators are selected
by the cooperative, to which they are ultimately answerable:
To manage the block chain there are chain administrators who sign new
instruction data for the block chain.
These administrators act as spokesperson for the FairCoop assembly
and are publicly appointed (ibid: 6)
Issues such as the environmental impact of the technology, and the
economic assumptions built into its architecture, here become issues that can be discussed
by the ‘FairCoop
assembly’: members of the cooperative that use the technology, and come
together to discuss its development.
Figure 10 -‐ FairCoop's 'Web of Trust'
It is in this sense that Faircoin V2 most radically challenges the
process whereby political and economic
assumptions can be concealed within technical discourse, and condensed within technology design. Design is instead open
to critique, and this critique is made fundamental to the design
process, in a continual cycle of social
deliberation and technology design.
While the proposals put forward here for FairCoop’s alternative economic
system remain in an embryonic stage,
the design for Faircoin V2 evidences the potential for its design process centred
on reflection, critique,
and collective accountability. Indeed, the emergence
of FairCoop itself is testament to productive communication lines between members
of a community and developers of technology. This case of ‘creative
appropriation’ of Bitcoin technology
can be understood in terms of Feenberg’s conceptualisation of social groups challenging technocratic power via new technical
practices. Faircoin’s adaptation of Bitcoin’s initial
design further illustrates the interpretative flexibility of Bitcoin,
evidencing the capacity of social
groups to creatively appropriate the technology. Most significantly, Faircoin illustrates the capacity of
actors working within the ‘margin of manoeuvre’, the spaces new technologies open for tactical
adaptations and interpretations, to establish a
process of ‘democratic rationalisation’: constructing technologies around principles of inclusive and ongoing social deliberation.
5.2.2 Summary
The case study of Faircoin
revealed a process
in which a social network
committed to advancing new techniques for sustainable
and egalitarian living were able to adapt Bitcoin and construct a new crypto-‐currency
technology. Identifying themselves as part of broader
traditions and movements that stand in opposition to capitalism and state
authoritarianism, the activists of
CIC and FairCoop had engaged in various experimentations with forms of money and technology prior to their
discovery of Bitcoin. These past practices, and the principles that guided them, shaped their understanding of
Bitcoin and their consequent adaptation of it.
A ‘technical code analysis’ of Faircoin’s design, drawing on concepts
from Feenberg’s critical constructionist approach,
reveals the contingency of the choices
made during its development
on the values held by the social group. This is particularly evident in the construction of Faircoin V2, which is
developed by Enric Duran and Thomas König in direct response to the concerns of the FairCoop community.
Interestingly, the analysis reveals that specific
efforts were made to solidify these processes of dialogue between developers
and users during Faircoin V2’s design. This supports Feenberg’s concept of democratic rationalisation, which clarifies
ways in which social groups are able to ‘creatively appropriate’ technologies and in the process, establish
ongoing procedures for social deliberation and modification that open
new technical and social possibilities. Ultimately, by imprinting these values of openness
into the design
for Faircoin V2, those at FairCoop demonstrate the capacity for marginal
groups to establish new ‘technical codes’: definitions of technology that contain specific social meanings. As these
meanings enter into design processes,
they are ‘condensed’ with technical logic and begin to undermine technocratic power processes. Or in Latour’s terms,
these meanings are made more durable as they are delegated to a nonhuman.
As a result, the values of a group like FairCoop may appear back
to them as ‘natural’ or ‘self-‐evident’ aims in technical
development. In a word,
just
as
Bitcoin demonstrated to its early users and developers the ‘technical’ superiority of neoliberal monetary
theory by generating value independently of nation states and banks, Faircoin, should it continue to expand,
may correspondingly demonstrate the ‘technical’ superiority of
cooperation and social deliberation.
1.1 Interpreting ‘Freedom’ in Adaptation
If negative freedom is freedom from being governed by others, positive freedom is ‘freedom to’ govern – a freedom that must logically define what it is to be self-‐ governing, which must give freedom a content, a character, and make
it a determinate activity rather than simply the opportunity to act – Finn Bowring
(2014: 157)
This chapter has presented two case studies in which groups of actors were
able to adapt Bitcoin to serve their particular interests. What characterises these cases is an interpretation of technology as an
emancipatory tool among the actors in question. These conscious, tactical uses of technology as a form means for
liberation largely serve to support Feenberg’s
model, which equally defines technology as emancipatory and outline ways in which social groups may locate this
largely suppressed but inherent potential. Both groups discussed in this chapter recognise
this potential and work within the ‘margin
of manoeuvre’ to innovate new functionalities in the technologies they encounter. What distinguishes the groups presented
here however, are the conceptions of freedom they
hold. In concluding this chapter, I argue that only Faircoin
demonstrates democratic
rationalisation and that this is due to the ‘positive’ conception of
freedom held by the social group driving its development.
In Two Conceptions of Liberty (1969),
Isiah Berlin differentiates between ‘negative freedom’ which broadly corresponds to the degree to which individuals are free from obstruction by
others, and ‘positive freedom’, which ‘consists in being one’s own
master’ (23), the capacity to impose
one’s own mode of being in the world. As neatly summarised by Bowring in the epigraph, the key distinction between
these conceptions of freedom consists of a ‘content’, as positive freedom requires determinate activity, involving a
substantive conception of what self-‐determination actually
constitutes beyond the removal of constraints.
In regards to adaptations of technology, the two cases in this chapter suggest
that ‘positive’ conceptions of freedom attached to
artefacts are more likely to open technology to social deliberation and participation, a process Feenberg terms a
democratic rationalisation of technology.
In the first case, we see Namecoin’s developers outline a commitment to
decentralisation that follows
the logic of negative freedom.
Primarily motivated by developing digital
technologies as a means of ‘freeing’ information from institutional
control, Jeremy Rand and Daniel
Kraft adapted Bitcoin technology to limit the capacities of centralised
organisations, such as ICAAN, to
exert influence over the flows of information between internet users. For Rand and Kraft, both Bitcoin and Namecoin
constitute emancipatory tools similar to those
they had engaged
with previously, such as Tor. In all cases, the meaning attached
to technology is a tool for
‘negative’ freedom: freedom from being
governed. As with similar agents in the ‘freedom
of information movement’72 such as Anonymous, the Pirate Party
and Wikileaks, with whom Namecoin’s developers identify shared goals,
freedom is defined as the absence of
supervision and central authority. As such, the meanings assigned to technology focus primarily on disruption
and evasion. The absence of any ‘positive’ freedom is encapsulated in the cyber-‐libertarian
conviction
that
technologies can of
themselves
redress power imbalances. As Rand stated, his hopes for Namecoin lay in the
notion that through its decentralised
architecture, ‘the laws of math can act as a check on government power’. Social deliberation and
participation in technical development are therefore less important
than the architecture of technology. Such adaptations, while potentially disruptive, ultimately fail to challenge
technocratic power as they do little to demystify its social contingency.
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72 This collective term for Wikileaks, Anonymous, and the Pirate Party movement is borrowed from Beyer,
2013.
In the second case, we see how the group of activists involved in
Faircoin’s development express an
entirely different conception of freedom, and this shapes how they engage with technologies they encounter. For activists
such as Piquete, freedom lies in ‘solidarity, self-‐ management, and mutual support’. While
this conception of freedom necessitates freedom from capitalism and
centralised government, it centres on a communitarian vision for small self-‐governing
communities that cooperate on
developing sustainable living. For those
at
CIC, establishing strong social ties, procedures of open dialogue, and networks
of trust are therefore determinate activities. Consequently, adaptations of technology involve
an opening of technology for social deliberation and participation, as evidence in the development
of Faircoin V2 and its ‘proof-‐of-‐cooperation’ architecture.
Feenberg’s approach provides an insightful means of assessing the
political implications of social
constructionism, throwing light on how the absence of democratic participation
in technical development acts to
reproduce social inequalities, and how social groups may open technology to democratic participation through creatively appropriating the technologies they
encounter. However, what the case studies of Namecoin and Faircoin indicate is that such appropriations of
technology are not of themselves ‘democratic’. Even in cases where social groups consciously adapt technology in the
pursuit of emancipation, the degree to which this opens technical development to social deliberation is largely determined by the conception of freedom active in that context.
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