Richard Wolff on Bitcoin and Cryptocurrency

in cryptocurrency •  12 days ago 

An interesting perspective on cryptocurrency, Professor Richard Wolff, a Marxian Economist, says that new technology ends up looking like the companies. He has a point, but he misses out something important about blockchain and dApps.

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tl;dr Just as Uber will be another taxi company, so then will Bitcoin become another financial services operator.
What is interesting is what happens during this process. We can already see that despite Bitcoin maximalists insisting that cryptocurrency not kowtow to regulation, some crypto operators are working to comply with the law.

I’ll use the term blockchain to mean any Distributed Ledger Technology (DLT). If you know the difference between DLT and blockchain then hopefully, you will allow the vernacular usage.

New entrants face challenges in entrenched markets. If all that happens is that Uber becomes just another taxi company, then at least they are another taxi company. It would be challenging for Uber to have become so large if it had followed the same model as the incumbents.

The new entrant offers something useful to consumers and, while the new entrant must comply with the law, the incumbent companies do adjust just a little to improve efficiency and services. In other words, the incumbents will adopt the best parts of the model that the new entrant brings. In reaction to Uber, my local taxi companies now have passable apps too. Taxi drivers now run multiple ride-hailing apps.

Geography matters less to a digital company so a market can happen anywhere in the world. Even a company that delivers physical goods can use our reliable and well established public logistics networks to get products to consumers quickly and cheaply. Cost-sink administrative functions are easier to centralise, and so there are efficiency gains to be made in starting up with admin centralised. While efficiency gains mean fewer jobs, these are “bullshit” (non-productive) jobs, so the world is improved by freeing labour to pursue other things.

While lowering barriers to entry allows for new entrants, the global nature of the digital world does tend toward concentrating economic power: witness the rise of Google, Facebook and Amazon. Blockchain allows us to build decentralised services where creators can guarantee an intention to limit their power. For example, Blockchains are censorship-resistant, and you cannot extinguish somebodies balance easily.

So far, consumers are placing short term utility over providers limiting their powers. This priority may shift if we learn to again distrust power concentrations. Political conservatives are claiming that big tech is already abusing their power, and it’s becoming apparent that legislation is moving too slowly to limit the power of global corporates.

The cyberpunk, people soft and open source movements gave humans the software tools to rival the big guys. Often the motivations for making tools were little more than the betterment of collective humanity.
These tools - operating systems, databases, servers, applications - are now available for all the costs are low. The donated effort of open source software has been extremely beneficial in removing significant technical barriers to all, including new entrants. Now, blockchain delivers the platforms to run ideas upon and thus lowering server and infrastructure costs.

In particular, cryptocurrency gives low-cost ways for people to exchange value and economies emerge out of value exchanges. Controlling the “money” means controlling the economy and crypto limits the ability for deliberate meddling in the economy. Whenever there’s an economy on the rocks, the rumours circulate of locals buying crypto; e.g. Venezuela, parts of Africa, Argentina. People can choose which money-like thing, with its attendant economic policy and government backing, they want to use without the friction of foreign currency exchange that makes such an approach prohibitive for small transactions.

Then there’s the voluntarists/anarchists who will avoid government regulation. To some extent, the crypto-anarchist can remain underground provided their movement doesn’t attract much attention. Crypto can offer some measure of resistance to legislation to those with the technical skills and the desire. I don’t think many people fall into this category though - at least not yet.

In summary, I think that Prof. Wolff is correct to a degree; crypto operators will eventually become like other financial operators. Blockchain operators have a profit motive to go mainstream. As crypto institutionalises, incumbents must adjust change, and there will be new entrants in the marketplace that might not have gotten a foot in the door otherwise. The consumer will have access to a broader range of services. Blockchain has other exciting properties; decentralisation of power with providers able to guarantee their self-imposed limits, public platforms to offer new services cheaply, choice over what “money” one uses, and some resistance to an overbearing government. The future is unknown, but the potential is electric.

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Very nice, thanks!

Few are still yet to discover it but bitcoin has a great future ahead

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  ·  12 days ago Reveal Comment

Buenas noches amigo @eturnerx le deseo que se encuentre bien al igual que su familia amigo. Exelente informacion amigo y que tenga unas buenas noches.