Understanding Bitcoin as one thing static — as some ‘factor’ with a solidified id — shouldn’t be understanding Bitcoin in any respect.
Bitcoin shouldn’t be being. Bitcoin is turning into. The perpetuation of its id shouldn’t be terminal however slightly instrumental to one thing else. Bitcoin maintains id in order that it will possibly serve its that means. And, like id, that means is malleable and exists solely within the hivemind that initiatives it.
A extra revealing manner to consider Bitcoin then is to not perceive it as a bodily assemble — as a decentralized fee community working on a cryptographic protocol — however as narrative. And don’t simply consider it as narrative in probably the most simple that means of the phrase, as a illustration or imitation of actuality or a cultural artifact, but additionally take into consideration its deeper points — i.e. narrative as being constitutive of consciousness itself.
Narrative isn’t just as our thoughts’s manner of describing being, but additionally as its manner of expressing and creating the chances of turning into. In different phrases, narratives aren’t merely representations or imitations of actuality — they are actuality. Creator and creator of Epsilon Idea Ben Hunt, whose concepts we will go to once more later, defines the idea of narrative as “a completely postmodern concept. What I imply by that is that Narrative is a social building, a malleable public illustration of malleable public statements that lacks any inherent Fact with a capital T[…]”
Whereas the epistemology of Fact with a capital T is past the scope of this piece, and whereas certainly the sensible thinkers at Epsilon Idea are by no means too removed from the reality (no matter it might imply) once they opine about narratives, there’s an implied false dichotomy between ‘narrative’ and ‘actuality’ within the above definition that mustn’t stay unaddressed. If we select to grasp narratives as mere cultural artifacts — as nothing however merchandise of our idle minds — then sure, narratives can undoubtedly be deemed “unfaithful” or “disconnected from observable information.”
But when we take the opposite, extra unorthodox strategy, and think about narratives as being constitutive of consciousness itself, then the true energy of narratives — as creators and destroyers of worlds — turns into evident.
And, to be completely clear, this isn’t simply semantic hair-splitting. The purpose is to persuade you that, for all that issues, the narrative is all there may be. It’s narratives that make the world go spherical. There isn’t some occult deeper layer past the narrative the place Fact with a capital T resides. Even when there may be, we now have no entry to it. To borrow a quote from cognitive scientist Joscha Bach: “Our expertise of the world that we’re embedded on shouldn’t be a secret direct wire to the bodily actuality. Bodily actuality is a bizarre quantum graph that we will by no means expertise and get entry to.”
All we get to expertise — as Paul Ricœur, the thinker who’s given us probably the most complete characterization of narrative up to now argues — are phenomena “emploted” with narrative. If we will’t, by definition, expertise the noumenon, and we by no means get to flee our mind’s simulacrum of actuality, then all we’re actually left with is… narrative.
Altering Narratives or Altering Bitcoin?
All mainstream discourse round Bitcoin narratives is laden with the false underlying assumption that the Bitcoin protocol is one way or the other categorically totally different from the Bitcoin narrative.
Narratives change, Bitcoin doesn’t, individuals assume.
However in actuality, this isn’t the case. It’s the identical blunder in pondering that presupposes the false dichotomy between narrative and actuality we talked about earlier. It’s not the code or the protocol that constitutes what we conceive to be Bitcoin, it’s the narrative that’s hooked up to it. Bitcoin’s code will be, and has been, modified many instances earlier than, all with out triggering any shifts in narrative. Actually, out of the few radical shifts in Bitcoin’s id which have occurred over the previous eleven years — none had been brought on by adjustments to the code or the principles of the protocol.
Certainly, it was all the time the opposite manner round: when the narratives change — the whole nature and id of the asset adjustments. It’s virtually as if the asset is nothing however the underlying spinoff of the narrative.
Narratives dictate how we understand Bitcoin, and once they shift, our conduct adjustments, which then, in flip, adjustments the entire sport: the way in which the whole trade operates, the companies, the customers, the laws, the enforcement — the whole lot.
Excellent proof of this phenomenon will be discovered once we take a better take a look at Bitcoin’s change from digital money to digital gold. From 2013 to early 2017 the overwhelming majority of bitcoiners seen and wished to make use of Bitcoin primarily as a method of alternate and secondarily as a speculative asset. Even supposing Bitcoin was simply as scarce then as it’s now, hardly ever did anyone hodl it with conviction or consider it as a financial savings expertise or a superior retailer of worth in any significant manner. Bitcoiners had been obsessive about with the ability to purchase cups of espresso with it, and the vast majority of the discourse on the time revolved round how low-cost the transactions had been and how one can persuade as many retailers to simply accept Bitcoin as fee.
Then, someday round late 2017, early 2018, when the legendary bull rally got here and the transaction charges skyrocketed, what could possibly be sensed brewing below the floor lastly burst onto the scene. First regularly, then instantly, and with none adjustments to the protocol, Bitcoin turned digital gold.
Okay, okay. It didn’t actually develop into digital gold in a single day; the digital gold narrative was, as a matter of reality, gaining traction even way back to 2015, however for all it issues, it wasn’t till the digital money proselytes migrated to Bitcoin Money in mid-2017 that it really turned mainstream.
The purpose is, at present’s Bitcoin is under no circumstances form or type a foreign money — just because no one seems at it in these phrases any longer. Regardless of the whole lot being the identical on the protocol layer, no one of their proper thoughts would spend Bitcoin as foreign money at present. And why is that?
It’s as a result of the narrative inalterably transmuted Bitcoin from result in gold. Bitcoin went from being one kind of asset to a different — from a digital foreign money or a medium of alternate to commodity cash and a retailer of worth. And this course of, which might hardly be interpreted as something apart from narrative alchemy, resulted in precise transmutation of the asset, and never simply in some superficial shift in neighborhood sentiment.
In 2018, an impartial Bitcoin researcher going by the pseudonym Hasu wrote a superb piece on an identical subject titled Unpacking Bitcoin’s Social Contract which cuts proper to the core of this matter:
“Bitcoin’s guidelines are made on the social layer, and the software program solely automates it. The place the social contract and the protocol layer diverge, the protocol layer is mistaken — all the time. A failure of the protocol layer to briefly implement the principles of the contract has no everlasting bearing on the validity of the contract itself.”
Bingo. Bitcoin’s id is cast on the social layer after which is however transcribed onto the protocol layer. The social realm is the place Bitcoin lives and the place Fact with capital T is set. However, this now begs the query: who makes the principles? Who controls the narrative?
Narratives, in any case, have to return from someplace — they don’t come up spontaneously, from the void. They both develop organically, by the unnoted dissemination of the underlying composite memes, or they’re created by fiat. So, the place did Bitcoin’s retailer of worth narrative come from? Did we arrive at it by advantage of inertia, or was it maybe a product of manufactured consent?
If we flip to the Bitcoin neighborhood, at present the vast majority of it appears to imagine that the at the moment prevailing retailer of worth narrative emerged organically, as a direct results of Bitcoin’s protocol design. Even Satoshi himself used analogies of gold and gold mining to clarify Bitcoin, and what’s gold actually if not a retailer of worth?
And whereas many pundits think about this imaginative and prescient of Bitcoin self-evident, it bears reminding that, when it comes to narrative, it wasn’t all the time this fashion. Bitcoin was for lengthy envisaged as a financial weapon — a weapon poised to undermine Caesar, take what’s his, and render it again to the individuals.
Bitcoin was a revolutionary, disruptive, and severely harmful concept. It’s only lately that the overarching mythos modified from “overcoming the monster” to “rags to riches,” or in crypto phrases “when Lambo?”
In a 2019 podcast interview, Ben Hunt, talked about earlier, made some very compelling contrarian factors about Bitcoin’s altering narrative that maybe the Bitcoin neighborhood ought to think about extra severely. To be extra particular, Ben thinks that Bitcoin’s newfound digital gold story is a purposefully construed narrative entice.
“Bitcoiners are taking up the function that gold house owners had for the final 50 years. It’s a job the place you end up now basically hoping for financial collapse […] You’re being balkanized; it’s the true unique that means of the ghetto — the place you’re having this neighborhood constructed for you, and also you’re like ‘Ow look how good that is!’ and you then transfer in and understand ‘Ow ow ow, now I’m right here — I’m the grumpy previous man that yells at clouds now.”
It’s a depressing technique to dwell, says Ben. And in some ways, he’s proper. We’re like frogs in boiling water; we had been lured into the pot by the promise of riches and now we’re trapped in a reductionist narrative that fails to inform the world the entire story of Bitcoin. It’s an enormous step down in ambition. From a optimistic change motion, the neighborhood remodeled right into a bunch of cynics ready for unhealthy issues to occur solely to be confirmed proper.
Maybe Ben is appropriate. Possibly the powers that be have a much bigger say in Bitcoin’s story than we’d prefer to assume. Maybe the neighborhood believes what it believes at present as a result of its consent has been manufactured. In spite of everything, the digital gold narrative is preserving the established order — not difficult it. The governments of the world are unfazed by it. What may’ve been the most important menace to their financial sovereignty has been neutralized by a mere change in narrative. Coincidence? Who knows. Nevertheless it’s actually one thing to consider.
Bitcoin is approaching an ontological inflection level
No matter what anybody thinks of Ben’s narrative inquiry into Bitcoin and the origins of the shop of worth narrative, crucial level to contemplate right here is that Bitcoin’s nonetheless an uncrystallized concept. Bitcoin continues to be turning into — nonetheless trying to find its remaining narrative type.
The presently dominant narrative is however one in all many narratives competing for the soul of Bitcoin. Bitcoin was born out of the 2008 monetary disaster, and its current id is closely influenced — if not totally molded — by it. However this will likely not essentially be the ultimate type Bitcoin appropriates sooner or later. Sound cash, world foreign money, world base settlement layer, nameless and fungible digital money — these are all visions of Bitcoin which will sooner or later resurface if the proper situations emerge.
Now that we’re dealing with the worst financial disaster within the final 100 years, Bitcoin’s retailer of worth narrative is more and more being referred to as into query, which implies that its day could come sooner slightly than later. Central banks are printing an order of magnitude extra fiat foreign money now than they ever did, and Bitcoin, by all accounts and measures, is meant to thrive and prosper in such macroeconomic situations.
That is the narrative make-or-break level.
If Bitcoin doesn’t carry out nicely as an uncorrelated monetary asset and it doesn’t ascend (or at the very least keep) its worth in fiat-denominated phrases, then the shop of worth narrative will shatter and Bitcoin must both reappropriate a few of the different, already current competing narratives, or reinvent itself into one thing else totally. If, alternatively, Bitcoin succeeds as a retailer of worth, then this narrative will cement and assume a comparatively secure type.
No matter narrative Bitcoin assumes after it crosses the occasion horizon, it will likely be one which defines it for years (if not many years) to return.