YANIS Varoufakis and the mainstream left in economics must take the potential of blockchain technology seriously, an advocate has argued.
Ben Arc, a writer at Bitcoin Magazine, sparked an interesting debate last July when he challenged the former Greek Finance Minister’s analysis of cryptocurrency.
Mr Varoufakis, who has engaged with Bitcoin and blockchain technology for almost a decade, wrote in 2013 of Bitcoin’s two fundamental flaws: “First, the bitcoin social economy is bound to be typified by chronic deflation.
“Secondly, we have already seen the rise of a bitcoin aristocracy which, besides the issues of distributive justice which it raises, evokes serious fears about the capacity of very few entities or persons to manipulate the currency in a manner that enriches them at the expense of financial instability. “
In an open letter to the Greek economist, Mr Arc suggested making use of “the Liquid Network, a federated, much faster additional blockchain”, and claimed “disparity in bitcoin wealth allocation continues to decrease.”
Varoufakis responded by conceding he was still “enthusiastic on blockchain’s capacities” – but declined to endorse Bitcoin itself. He concluded: “Bitcoin’s great appeal is that it breaks the cronyist chain linking central banks and private bankers. However, it does not undermine the cronyism of the network of bosses, politicians and private bankers.”
But Mr Arc felt Varoufakis, though a stalwart of the Left in many ways, is simply behind the times when it comes to the ever-changing software behind Blockchain technology.
Speaking to Redaction Politics at a time when Bitcoin was hitting all time highs (ATH) in price terms, Mr Arc said: “Annoyingly, he didn’t address the technological advancements made in bitcoin I mentioned in my article, such as sidechains, that allow something like a more “honest” federated fiat capable of soft currency functions like MMT. His analysis was based on a much more technologically limited 2016 bitcoin. bitcoin is software and forever changing/improving, which was the point of my letter to him.
“But I cant blame him too much.
“Understanding the economic implications of 2021 Bitcoin requires a fairly advanced technological understanding of Bitcoin and also being able to resist some ideological dogma.
“Someone like Yanis simply hasn’t got the time to get an up to date opinion on the software, so his understanding of Bitcoin remains static (unlike the software).”
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In fact, he boldly claimed, Karl Marx may have been very receptive to Bitcoin, even in its current form.
“If he could overlook that superficial trading-centric news cycle, of course,” he said.
“Marx believed a good money should be a commodity like gold, he would also very much approve of decentralised control, and likely share my interest in how the consensus process in bitcoin, and technology like digital keypairs, could be applied to decentralising decision making in broader mode of production such as a cooperative.”
He added that the technology behind Bitcoin will appeal to all economic schools of thought; Austrians for its scaricty, Keynesians for its apolitical nature, socialists for the “public commons” and those backing Modern Monetary Theory as an honest federated soft currency.
After all, blockchain is already being used as a public good against Covid-19. Two British hospitals are using the technology to monitor and track vaccine distribution.
It may be a libertarian’s fantasy, but there’s little doubt that the idea of blockchain and Bitcoin is growing fast on the left.
Ben Arc is a writer for Bitcoin Magazine and an advocate of cryptocurrency as a socialist tool.