Whether you like it or not, it’s very likely that the blockchain is coming to a future near you. As much as it is a buzzword for corporate neoliberal lizards, there’s a reason for it. That’s because their lizard brain pleasure centers have recognized how it could be used in specific ways to improve their bottom line and it’s pretty terrible.
You might be thinking, “Well yeah of course it would because crypto geeks want to create a utopian libertarian Ancap world with bitcoin which won’t work because anarcho-capitalism is a contradiction since capitalism requires a State to recognize property rights and would lead to real-life Mad Max.” But no, that’s not what I’m talking about because yes, that probably won’t happen.
In Ancap Bitcoin Maximalist Fantasy Land, they become the rich who can afford to protect themselves after societal breakdown (Also Stonetoss is a Nazi)
In my article, What do Leftists Think About Blockchain, I wrote:
“The 2019 Deloitte Global Blockchain study found that more than 50% of the surveyed senior executives consider blockchain an essential strategic direction, up by 10% compared to 2018. Moreover, four in ten respondents said they plan to invest in 2019 over five million dollars to develop solutions based on blockchain. No matter what you think about these executives, these are not insignificant statistics. In Grundrisse Mark wrote “Capital undertakes only advantageous undertakings, advantageous in its sense” meaning that if there is an advantage for adopting a technology, Capital will find a way to do it. It may be disruptive, but we should keep in mind that capitalist markets are essentially battlegrounds amongst the bourgeois class and the pro- crypto segment of them are getting ready for that fight. Of course it will most likely be the workers who will suffer the most from that fight. I wouldn’t underestimate them.”
Keep this in mind while we take a look at some of the more egregious attempts at what I’m talking about.
Facebook’s Libra: All Hail Our Corporate Overlords?
Zucc isn’t the only lizard among these reptiles
In June of 2019, after much speculation in the media, Facebook finally announced its cryptocurrency project Libra. In short, it is a permissioned blockchain managed by the Libra Association made up of the assortment of companies shown above. They range in industries from those in technology, payments, venture capital, and nonprofits and will be the ones who own the nodes on the network.
In Libra’s whitepaper, it states that the goal of Libra is to create “A stable currency built on a secure and stable open-source blockchain, backed by a reserve of real assets, and governed by an independent association.” I won’t tell you to read the rest of it, but holy shit is this project problematic. It isn’t the technical aspects of it because in fact, considering that it will be a permissioned blockchain at first then transition to a public blockchain, it is actually technically sound. What’s scary about it is HOW it will be used and actually, the fact that it will likely be a functioning product makes it even worse.
The Libra cryptocurrency is planned to take its valuation based on a reserve of “low volatility” assets so that the price will not fluctuate based on market speculation against other cryptocurrencies and therefore will be considered a “stable coin.” It makes sense that they are creating what is essentially a mixed commodity-money including other countries’ currencies because at least for now, corporations cannot tax us like governments do. Fiat money, or government-issued currency not backed by a physical commodity, was able to exist because after WWII, the US owned most of the world’s gold and so even though the 1944 Bretton Woods Agreement set the exchange value of all currencies in gold, most countries pegged the value of their currency to the US dollar. These material conditions made it easy for President Nixon to make the gold standard useless and create the system we have today so countries like the US could print money to fight stagflation in 1971. They could also do this because most countries had a nationalized system for currency creation and taxation already in place enforced through violence by the State.
In order to facilitate a viable economy for Libra used by Facebook users (2.4 billion), Libra will need to have a reserve worth in the trillions of dollars of different assets to stay stable. A single user will also need to be able to hold at least thousands of dollars worth in Libra coins to make it a viable currency and store of value. When all of these transactions are taking place, in order to comply with the SEC, Libra will need to prove that all of the available Libra currency can be backed by their reserve.
So now imagine, that inside the reserve, Libra is holding the currency of a country which is currently undergoing some political upheaval and the new government has decided to implement some reform so that workers at large corporation like Facebook or any other in the Libra Association receive higher wages which means the corporation makes less profit. The Libra Association can choose to sell the billions of the currency from that country in reserve on foreign exchange markets to plummet its price causing economic panic as a push back. Don’t believe for a second that because the association is “independent” doesn’t mean it won’t protect its members’ bottom line.
And the warming embrace of bourgeois lizard-people
Queen AOC, during Congressional hearings with Facebook about Libra, made some fantastic points about another thing that’s wrong with corporate currencies in general. (Watch the Video). Libra is essentially scrip, which is when companies make their own currencies to pay employees that are not valid anywhere else. During the Industrial Revolution, large factories would pay their employees in “Factory Bucks” that they could use to buy lunch and other things only in stores owned by the company. The practice helped companies save money on labor costs as they kept more government-backed money but as you can imagine, was extremely problematic because employees became dependent on their factory bosses and couldn’t afford to switch jobs. Thankfully, the practice became illegal under the Fair Labor Standards Act of 1938.
Besides allowing customers to pay in Libra, companies like Facebook and Uber in the Libra Association have made it clear that they would also consider paying their employees in Libra as well. This is a pretty big issue considering you can’t pay rent in Libra coins. This is on top of the fact that many workers in the sharing economy like Uber drivers are in very precarious positions. If Uber offers a special deal with drivers to accept Libra, it could potentially put them in more precarious conditions over time.
One of the other goals of Libra and similar projects is “Banking the Unbanked” or giving access to financial products to those who currently don’t with a focus largely on 3rd world countries. Did your Imperialism Alarm just go off? Because it should have.
Just one of many examples of the many depressing neoliberal use cases pushed in the mainstream crypto space
Already, without the help of cryptocurrencies or blockchain, digital imperialism is currently happening against the Global South by companies based in Silicon Valley. American dominance of digital architecture has been used to usurp other countries’ sovereignty and continue the ever-increasing trend of Surveillance Capitalism. In the “Problem Statement” section of the Libra whitepaper it states: “When people are asked why they remain on the fringe of the existing financial system, those who remain ‘unbanked’ point to not having sufficient funds, high and unpredictable fees, banks being too far away, and lacking the necessary documentation.” They seem to start pointing out the root problem of financial capitalism yet the solution for some reason is “access to financial services”. Yes, the reason people in Africa are poor is because they don’t have an account with Wells Fargo…
If you read between the lines, Libra is saying that they can be the financial institution that poor people in the Global South have been praying for since the beginning of European colonialism. Lizards- uh I mean Libra may tell you that this is different from those evil bank because they’re using cryptocurrency, but let’s not fool ourselves. This is the exact type of neoliberal, market-based solution for pretending to fix a problem that neoliberalism helped create. Libra is starting as a permissioned blockchain (i.e. centralized) controlled by several large multi-national corporations who all only share the same goal of increasing their profit margins. Libra is a naked attempt at corporate world domination.
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