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Yes, Bitcoin is Cybercommunism—but it will spawn Capital Markets 2.0

"The invention of the Net was the greatest irony of the Cold War. At the height of the struggle against Stalinist communism, the US military unwittingly bankrolled the creation of cyber-communism."—Richard Barbrook

In the national discourse, reforms of "capitalism" are portrayed as a panacea for income inequality. The rich like to propose them—in this era of populism, it takes the heat off—but unsurprisingly, their reforms are rarely enacted without quiet, antithetical compromises meant to preserve the status quo (see: Obamacare). The politics of reform are today expressed in symbolic concessions.

As a result, Americans hear a lot of sound and fury about "capitalism"—but not much serious talk about what might come next. Free, open, and fairly regulated markets create superior living conditions for humans. But is there some way to harden the game against the sort of political manipulations that have allowed corporate bail-outs, and the social unease they create? If there were, what would we call it?

Richard Barbrook has an opinion. He is a British academic at the University of Westminster who wrote the essay "The Californian Ideology," a pioneering critique of the neoliberal politics exemplified by the then-new WIRED magazine. His essay “Cybercommunism,” published in 2007, is more relevant than ever when looking at the economy developing on top of the Bitcoin network, and how it might provide an opportunity for a new synthesis of right and left values.

In the essay, he argues that a new form of governance will necessarily supersede capitalism, as well as neoliberalism, which he contends “... seems to have successfully achieved the contradictory aims of reactionary modernism: economic progress and social immobility... the long-term goal of liberating everyone will never be reached, the short-term rule of the digerati can last forever."

How does the modern world continue to use digital tools which improve our lives, while unshackling itself from the “digerati” which is increasingly prone to surveil and manipulate the information trafficked through their companies?

Centralized Communism has certainly adopted a technocratic bent, as seen in China. It narrows the wealth gap, at least ostensibly, but when dictatorially controlled, its technological advances come with surveillance, increased oppression, and moral hazards. Unfortunately, for a centralized organization, dictatorship is the price of fast action—the only way to steer a massive bureaucracy. But, leaders can easily corrupt the central organization and degrade citizens' trust.

Cybercommunism, as Barbrook defines it, is not techno-Communism as seenin China. Instead, he says the idea is based upon the age-old concept of a matriarchal "gift economy." He argued in 2007 that such a gift economy was already emerging in the West, on the Web. The Internet back then was seen as a repository of freely-given, freely-transmitted information which had emerged without market forces; lots of folks had personal websites. Unlike its corrupt and centralized physical counterparts, the old media companies, Barbrook thought this social-content-utopia was a pure exchange of information—a mutually-beneficial trade practice which has been gone on forever in human civilizations.

The idea that you might "contribute," and contribute nonsense, to gain popularity apparently never occurred to Barbrook. Indeed, most of the online "gifting" today occurs on social mega-platforms like Facebook and Reddit, where users can buy small tokens with their debit or credit cards, and award them to one another for interesting posts. And increasingly, these non-fungible digital items are allowed to float and trade outside their platform of origin, usually for dollars or Bitcoin.

Still, in principle at least, the users of the these sites are only dimly aware of the monetization techniques—to them, this really is peer to peer "information exchange". And in its exploitation it's equitable; everyone gets access to the same Facebook features, regardless of how valuable their data is. It's less Cybercommunism than Cyber-serfdom. Barbrook argues that says neoliberals believe that the Internet should become a 'work-as-commodity' scheme, where but users’ contributions and their monetary value lie with the corporation. Thirteen years later, it has.

But the core values of Barbrook's online gift economy, however idealistic, actually live on in most Bitcoin and open source software enthusiasts, who contribute their engineering skills for free, and often pseudonymously, and on their own time. Volunteer labor is the trademark of the free and open source (FOSS) software hobbyist community, because software folks have decided, as a culture, that meting out rules and licenses makes coding a lot less fun.

Bitcoin is a fairly typically-organized FOSS project, with the exception of the fact that the software is a cooperative financial settlement network. Bitcoin’s network asset—the USD to its FedWire—is traded widely around the world, giving these contributors a way to bet on the project’s success. But, they must buy it first from miners (also volunteers) who operate the hardware that secures the network, and are rewarded for that effort with bitcoins.

If governments and central banks continue to satisfy their citizens with cash payouts during times of economic duress, as they have during the COVID-19 epidemic, then a Bitcoin-based Cybercommunism and its gift economy might be accelerated, as people need to devote less time to work and spend more time online.

At scale, a Cybercommunist Bitcoin Gift Economy, as envisioned by Barbrook, might unite global trade around a single collateral commodity money, creating a massive and liquid market. That in turn would reduce transaction costs and raise living standards worldwide; all without ceding control to a centrally-managed dictatorship-in-development. That's a future worth looking into.

But to get there would require significant new infrastructure for capital markets—and a new approach to organizing the labor to build it. Entirely FOSS financial infrastructure, built by engineers who organize in the same fashion as Bitcoin engineers, would be frustrated by the realities of decentralized computing resources, which are low-performance. And without performant tools, Wall Street won't bring its capital to bear on decentralized infrastructure. No liquidity means no markets.

So what's the solution? Private financial infrastructure at Layer 2 would incentivize performance, and allow experimentation with hybrid centralized-decentralized models, while leaving the gift-economy engineering to the underlying network project. Bitcoin's base layer could exemplify the Cybercommunist ideal that Barbrook describes, and act as the platform for privately-owned Layer 2's on top, which would compete for financial activity the way traditional exchanges and corporations do today.

In a reversal of irony, it might be Cybercommunism at Layer 1 that creates the platform for new experiments in high finance at Layer 2.

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