A Just Cryptocurrency

An Ideological Basis

I like Bitcoin a lot, but I kinda see it as the latest development in our ongoing conversation about what currency should be rather than as the final word in it. One of the problems I see with Bitcoin, aside from the mining centralization problem, is the wealth centralization problem. In particular, capitalism tends toward the accumulation of most of the world’s wealth in the hands of a few.

I’m not here to split hairs over “true capitalism” versus “crony capitalism,” so lower your hackles if I’ve raised them, take a deep breath, and see if I’m not entirely full of shit here. In my opinion, power is power, and an excess of any one kind makes it easier to obtain any other form one desires, including violent power. The difference between “true capitalism” and “crony capitalism” is only one of age. “True capitalism” naturally evolves into “crony capitalism” given enough time due to the fungibility of power in general. In other words, the wealth gap, while problematic, is only one aspect of a larger problem: the problem of incredibly large power imbalances.

Part of the problem with these power imbalances, part of what gives rise to them in the first place, is that power, once given, can be incredibly hard to take back. We have a legal system that’s supposed to protect the disempowered in the event that someone abuses the power they’ve been given. But in practice, power is still power. Power gets things done. Power can subvert, and has subverted, our legal system. So we end up with a dynamic where power is distributed unevenly and where it gets wielded to divert more power into the hands of the already powerful at the expense of those who lack the power to protect themselves.

It’s a meat-grinder-like dynamic that contributes toward downwards mobility for the exploited and upward mobility for the exploiters. If you don’t feel it yet, you will soon enough. As a city, and even as a country, we have had it relatively good so far.

This is a large problem and the cryptocurrency I’m about to propose here won’t solve all of it. Power comes in many forms. But I think blockchain-based cryptocurrency gives us the chance to at least take a step toward solving the problem where currency is concerned. Historically this power dynamic has only been broken through violence: whether the hard violence of revolution or the softer violence of reform. I think we have a shot at breaking it this time with the even softer “violence” of code and marketplace competition.

The Cryptocurrency Itself

I want to merge currency and democracy. I want to make a currency that gives each person an equal voice in what is done with their “power-as-currency.” Or, I suppose more accurately, a say in what is not done with it.

In particular, I want to create a cryptocurrency that hooks into a cryptographic proof of physical identity and grants a certain number of currency units per person. The currency units get mixed with each transaction, maintaining anonymity, but each participant keeps a secret key that can be used to refer to any transactions “containing” their tokens. They can use that secret key to issue a transaction barring any other participant, or set of participants, from using their tokens. They can also use the secret key to remove any bars they’ve previously placed in the event the censured actor satisfactorily makes amends for whatever they had done to earn the censure in the first place.

Of course, the dynamic of allowing anonymous transactions while also allowing participants to issue transactions referring back to their original “tokens” could prove hopelessly complicated and difficult to implement. A simpler possibility would be to just set up a system where the amount of currency within the total coin base available to a participant is attenuated by the percentage of participants that have them blacklisted. So if I’m blacklisted by 20% of the population, then 20% of the coin base is chosen at random and made unavailable to me. I will not then be able to receive coins belonging to the 20% set or send coins belonging to that set until I make amends with those who have blacklisted me and get them to remove me from their blacklists.

This would allow smaller economic actors to collectively take meaningful punitive action against powerful, misbehaving actors without regard to how large those actors are. Because of the “voting” system in which every participant has an equal say, actors who harm a large percentage of the population will subsequently find any power held within this cryptocurrency stripped from them, proportionate to the amount of infamy they manage to earn for themselves.

A Keynesian Addendum

I would be pleasantly surprised if this addendum meets with approbation, but I would like to at least propose it.

In my opinion, this currency should also enact a saner version of inflation wherein 2% of the monetary base gets issued to all participants equally each year, with each block containing some small chunk of the yearly amount. This would make economic power within the system tend toward equality (in the absence of any other economic actions), as opposed to the current system’s inflation scheme which favors those closest to “the money spigot.” This inflationary scheme could also be considered a sort of “basic universal income,” depending on the specifics of the economy the cryptocurrency finds itself in and on the overall size of the money base.

Criticisms? Ideas?

Please let me know if you have any criticisms or ideas. This idea is very rough at the moment and I’m looking to test it and improve it via discussion before I take it any further. This is to be a collaborative enterprise involving as many minds as possible as early as possible and as often as possible.