Bitcoin is an ark, it is said in a sea of increasing liquidity. Millions already have tickets. But where is the journey going?
Satoshi has developed a ship that, to a certain extent, steers itself. It is more profitable to publish full blocks than empty ones, to cooperate rather than attempt a 51% attack and run Bitcoin instead of a fork. It all works by design. The game theory of adoption, in which early adopters are rewarded, also leads the ship to a safe and prosperous harbor.
Andrew M. Bailey is an adjunct professor of humanities at Yale-NUS College. Troy Cross is Professor of Philosophy and Humanities at Reed College. Crypto Questioned is a forum to discuss the ideas and philosophies that power the cryptocurrency industry.
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But these incentive structures only provide a rough direction. Dangers remain. Mining could, in principle, centralize the network and hold it hostage. Addresses could be blacklisted. Transactions could be censored. The protocol could even be modified to add functionality, destroy privacy, or allow surveillance.
In addition to stopping, what can you do to improve the ship’s direction of travel? Bitcoin’s cyber hornets are known to be aggressive on Twitter and sting Bitcoin’s perceived enemies both domestically and abroad. You too can call dangers from the crow’s nest.
There is another, quieter way, more like bumping into the bike. The network needs food; that the work in progress gives Bitcoiners opportunities to properly steer the ship. You can. And our thesis is that you should. Mine your values.
By “mining my assets” we mean, in part, mining bitcoin in a way that embodies your own ideas about what should become of bitcoin. But we also intend it as a more abstract slogan to discover and implement these values in other ways that sustain and guide the network.
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The story goes on
Here are three examples of values that can be expanded. We give simple, medium and advanced suggestions under each:
Let’s say you care about privacy and censorship resistance. Despite the prevailing Number Go Up narrative, your fascination with Bitcoin stems from the way it empowers individuals, not institutions. If so, then you should keep your Bitcoin safe, join your UTXOs, and encourage your family and friends to do the same. Ruthlessly boycott Bitcoin platforms or services that punish users for coinjoining and patronize those who respect fungibility. Does that appeal to you? If yes:
Suppose, like many bitcoiners, you have a long view of things. You care about the future of our planet. Although the media accounts of Bitcoin emissions are sometimes exaggerated, you are concerned about climate change and want Bitcoin to lead the way towards a decarbonised future. If so, consider investing in green bitcoin mining. Mining is a series of competitions designed to win fixed rewards. The more investments flow into green mining, the less profitable it is to mine with carbon-intensive methods. In principle, enough green mining could simply displace CO2-intensive mining and at the same time secure the network that all Bitcoiners depend on. Here’s what you can do:
Simple: Use exchanges that minimize CO2 emissions through compensation payments. When they are available, buy green co-investment instruments to invest in green mining proportionally to your inventory.
Medium: Buy stocks of listed mining companies that are committed to sustainable practices, such as Bitfarms (BITF) or Hive (HIVE).
Advanced: Mine your own Bitcoin with green energy and join a mining pool that is committed to clean energy like Terra Pool. If you have access to private equity markets, invest in emerging green mining companies before they go public.
Suppose you care about maintaining value in the face of monetary expansion. They implement Bitcoin not as a scheme to get rich quick, but rather as a scheme not to get poor. If so, you should run a full node, use it to validate transactions and thus enforce Bitcoin’s rules, including the all-important supply cap. The plan in action:
It’s easy: get a Raspberry Pi or get that old laptop out of your closet, turn it into a full node, and use it. Update software wisely and only signal approval for network upgrades that receive decentralization.
Medium: host a Lightning wallet on your own node. Validate on-chain transactions yourself and use LNbits to get your friends and family on board without relying on centralized institutional custody.
Advanced: Again, consider mining yourself or investing in a mining company that is committed to decentralization.
These values and suggested implementations may not work for all. The nice thing about self-management is that you are free to express your values, not ours or those of others. So here’s an exercise: write down some of your own most valuable values, then figure out how you can incorporate them into your Bitcoin strategy, perhaps by taking inspiration from our own suggestions above:
I guess ______
I can mine ______ in Bitcoin by doing X.
That’s why I’m doing X.
Some arguments conclude with a theoretical statement. A practical syllogism, on the other hand, ends with the act. When you carry out this practical syllogism, what is its conclusion? How do you help steer the ship?
We do not recommend charities. Mining your values in the way suggested above is not an altruistic giveaway. Green Bitcoin mining is profitable. Self-custody protects you from various attacks and counterparty risks. And enforcing the key economic properties of bitcoin with your own full node is critical to maintaining the value of your bitcoin.
There is a price to be paid in taking on the ship as co-captain, however. It takes thought. You need to think about and take responsibility for what your values really are and what Bitcoin should be. It requires a certain amount of self-education.
Each of these actions will be easier – mining, operating a node, self-custody – but none will ever be as easy as simply clicking “Buy” on Coinbase. It requires minimal research. You need to be careful when using a product or service whether it is oriented towards your preferred future or whether you are unknowingly steering the ship in a direction you would rather not take. The price you pay is the price of citizenship wherever citizens have an actual role in governance.
That price – the inevitable cost of conscious and active citizenship – is minimal. But the payoff is huge. In short, it is the intrinsic reward of self-management, the satisfaction of not just living your values, but of making a difference to our common monetary future. It is precious. But we admit it can also be difficult to appreciate, so much used to being a voiceless financial existence.
In our monetary system, all but a few are mere customers, users who make decisions within a system that is simply given to them like the rules of the game. Meanwhile, a priestly caste of central bankers, regulators, and policymakers are actually shaping the rules of the game, the rules of money itself – its rate of spending, its initial distribution, the terms of its transfer, lending, etc. Their privilege, on which most of us live our entire lives unconscious for a long time, remain strictly guarded by specialist vocabulary, certifications and laws.
Bitcoin fixes this, we like to say. But one possible future for Bitcoin is for those privileged few who view Bitcoin as inevitable to use their weight of money, political power, and technical skill to take over the helm. Block by block and commit by commit, they shape Bitcoin into the image of the existing currency system and serve the same target groups. Another possibility is that we don’t allow them. Asserting your self-sovereignty and living out your own values could result in a Bitcoin that collectively reflects the values of its users, rather than the values of nation states, banks or companies that might try to capture it.
Our reasoning may remind you of similar pleadings to get involved in electoral politics. Every four years or so, experts remind us that every voice is important and that we are all obliged to make our contribution. Many Bitcoiners may harbor a few suspicions and be cynical about the overall turnout. The duty to participate, which we highlight, is not like that. You probably didn’t vote for your government; It may well be that it precedes your existence and cares very little about the consent of the governed.
You made up your mind to be a bitcoiner and you choose to stay one every day that you don’t sell. We urge you to implement these decisions in ways that may not be obvious. We advocate participating in a collective endeavor that is currently small and in which individuals can make a meaningful difference.
It is tempting to think of Bitcoin as the elimination of the human element in money that disintermediates not only banks and governments, but people as well. Bitcoin, shall we say, is “just math” and for many of us that is a consolation. But the temptation to think of Bitcoin as just code must be resisted. Layer 1 is the Bitcoin network. Layer 0 is and will remain people.