Bitcoin Communism

If the decentralized and democratic nature of Bitcoin is a hit in web3, whose loss will it be with the new Bitcoin communism?

Karl Marx, the creator of socialism, would likely support the existence of Bitcoin because of its decentralized and democratic nature. However, since it’s new, the views are divided. Some socialists view crypto as a way of getting rid of the shackles of being wage slaves, whereas capitalists view Bitcoin and other cryptocurrencies as a danger to their existence.

The whole concept of Bitcoin is standing on a single idea and it is decentralization. It is the process where everything is distributed or delegated away from a central, authoritative location or group. The essence of decentralization is to markedly minimize the extent of trust that must exist among the users and significantly reduce the level of control or authority they have over themselves in ways that harms the functionality of the network. Bitcoin is a decentralized digital currency that records transactions in a distributed ledger known as a Blockchain.  After the invention of Bitcoin, socialists and communists have found it quite appealing and fully supported it. In fact, it is being said Karl Marx, the legend of communism would likely support the existence of Bitcoin because of its decentralized and democratic nature. However, since it’s new, the views are divided. Some socialists view it as a way of getting rid of the shackles of being wage slaves, others view Bitcoin as a bane to capitalism.

Understanding the Communist Mechanism behind Bitcoin

According to communism ideology, every worker should get rewards for their labor. And each person should get equal rewards for the work they do and this is what Bitcoin fulfills. Since there is no central regulatory authority working on cryptocurrencies, the entire system is divided into P2P, which makes it communal in nature. Miners mine blocks and are rewarded for each block they mine. The similarities between Bitcoin and socialism are also based on their democratic core values as well as their distrust for centralized institutions. 

Why do Governments Hate it? What Would be Their Loss?

Among other things, Bitcoin enables the citizens of a country to undermine government authority by circumventing capital controls imposed by it. It also facilitates nefarious activities by helping criminals evade detection. Finally, by removing intermediaries, Bitcoin can potentially throw a wrench in the existing capitalist financial infrastructure system and destabilize it. 

Traditional Banks are Reluctant over Bitcoin. What Are They Afraid of?

French banking giant, BNP Paribas released a report where they discussed the technology behind cryptocurrency and how it could lead to making the traditional banks redundant. An analyst for the bank wrote in a report about the software behind cryptocurrencies stating that it “should be considered as an invention like the steam or combustion engine, that has the potential to transform the world of finance and beyond.” There have been many instances where traditional banks have often been guilty of customer-unfriendly account manipulations, such as applying debits before credits then charging fees for insufficient funds. In a digital age, customers can actually see this happening by glancing at their mobile phones, the big banks won’t be able to get away with such practices for much longer.

Then why did China Ban Bitcoin despite Being a Communist Country?

The Chinese government’s move to rein in cryptocurrency also has to do with its desire to exert more control over economic activity in the country. Bitcoin and its brethren were designed as a tool for facilitating transactions without institutional authorities like banks or governments, so allowing them to flourish in any country takes some power away from state actors. China is now trying to supplant bitcoin by creating its own digital currency known as eCNY, which will be backed by the government. However, eCNY has only superficial similarities to bitcoin and doesn’t use blockchain, the ledger technology at the heart of all cryptocurrencies.

On a concluding note, it can be said that despite its decentralized nature, Bitcoin investments seem to be largely affected by people with higher financial power, so the question of it being completely communal still remains. However, it does give the common people hope for a decentralized future where everyone may get a fair chance.