As Bitcoin is adopted by more and more traditional financial institutions, and becomes regulated by governments worldwide, the question of its survival as a truly disruptive alternative to legacy financial systems is raised. After all, if governments like Qatar’s can ban it, and international banking laws like AMLD5 can push bitcoin-friendly companies out of business, how is Satoshi’s revolutionary P2P cash to survive without a counter economy of willing users who transact freely and autonomously?
Also Read: Regs Roundup: SEC Actions, Crypto Tax-Free in Korea, New Chinese Laws
Counter-Economics and SEK III
Short for “counter-establishment economics,” counter-economics is any and all economic activity which takes place outside the purview of, or simply disregarding, the state.
The concept was popularized in libertarian circles largely by agorist Samuel Edward Konkin III, or “SEK III,” and comprises any non-violent act of the free market which runs counter to statist laws and norms. For example, something as small as selling odds and ends at a flea market is counter-economics. Not reporting income to a war-fueling and privacy-invasive tax agency, or running a dark web marketplace like the Silk Road. Painting a fence for a neighbor and being paid under the table. Setting up a roadside fruits stand or carpooling service without a license. These are all examples of counter-economic activity.
Konkin himself defined counter-economics as follows:
“The Counter-Economy is the sum of all non-aggressive Human Action which is forbidden by the State. Counter-economics is the study of the Counter-Economy and its practices. The Counter-Economy includes the free market, the Black Market, the ‘underground economy,’ all acts of civil and social disobedience, all acts of forbidden association (sexual, racial, cross-religious), and anything else the State, at any place or time, chooses to prohibit, control, regulate, tax, or tariff. The Counter-Economy excludes all State-approved action (the ‘White Market’) and the Red Market (violence and theft not approved by the State).”
Qatar Bans Bitcoin, Who’s Next?
As news.Bitcoin.com has recently reported, Qatar Financial Center (QFC) Regulatory Authority has placed a blanket ban on QFC businesses transacting in cryptocurrencies. The EU’s AMLD5 regulations are similarly forcing crypto companies out of business. Top crypto exchanges are giving up sensitive user info to tax agencies like the IRS, and nations worldwide are in development of central bank digital currencies (CBDCs) to potentially replace paper and coin fiat money. In this context, it’s important to ask what sets bitcoin apart. After all, in one sense, it’s just another electronic currency on a blockchain, surveillance-ready more so than even paper cash, and highly traceable.
Should bitcoin be used solely in accordance with this or that state mandate or law, it stands to ask why everyone shouldn’t simply switch to state or corporate-backed digital assets. Proponents of bitcoin will likely respond “Bitcoin is decentralized and the state ultimately cannot control it. Corporations and governments are centralized.”
The follow up to this remark should be to affirm whether or not the person thinks the ability of bitcoin to render laws irrelevant is a strength. If it’s not perceived as such, and counter-economics is to be avoided, it’s hard to see the currency’s unique value proposition. All that needs to happen is for a state to “ban” bitcoin, and effect the removal of viable channels for exchange, and these individuals who strictly abide by established laws will be left with nothing but a now neutered, and practically centralized asset.
The Roots of Bitcoin
Whether or not one views Satoshi as a kind of cypherpunk himself, the fact that the roots of bitcoin come largely from cypherpunk and anarchist/libertarian circles is undeniable. A quick perusal of early discussions regarding electronic financial transactions without third parties on the cypherpunk mailing list bears this out. As do examinations of concepts for digital currencies which were direct forerunners to bitcoin, and which were even referenced by Nakamoto himself in the whitepaper.
What drove bitcoin to the success and valuation it experiences today has everything to do with the capabilities it provided for permissionless transaction, and very little — if anything — to do with mimicking existing systems of currency.
As with most cool concepts, one person thinks of something interesting and a few people get into it at first, only for the movement to grow and eventually become inundated with posers wishing only to reap easy social (and in this case financial) benefits of adoption, without supporting what actually gave the concept value in the first place. This sets any movement up for an impending implosion.
No Free Trade, No Meaning
Suffice it to say that without its number one utility exercised, bitcoin is little more than a shell of its former perception. On the other hand, should individuals continue using bitcoin as they please, insofar as they please, with or without permission (risks understood and carefully considered), there’s a good chance very real disruption for the benefit of human economic freedom can be had. In fact, it’s already happening.
Privacy enhancing protocols such as Cashshuffle and the upcoming Cash Fusion, plus non-KYC, P2P trading platforms like local.Bitcoin.com are making the pursuit of economic freedom via crypto more viable than ever. Privacy coins such as monero — though often delisted by large, centralized exchanges — are also a part of this fight. The main element, however, is the individual. The individual who trades freely in non-violence is the key actor; without this individual, Bitcoin is largely meaningless.
What are your thoughts on counter-economics? Let us know in the comments section below.
Op-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.
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