The Bitcoin – Democratic Money in a Neoliberal Economy

Authors

DOI:

https://doi.org/10.12797/AdAmericam.19.2018.19.11

Keywords:

cryptocurrency, block chain technology, p2p technology

Abstract

This article examines the bitcoin, at present the most popular cryptocurrency. The bitcoin grew on the major pillars of the neoliberal market economy, such as liberalization, deregulation and privatization. But in the end, it turned out to be a cure for the dysfunctions of the financial system, which was based on neoliberal assumptions. The difficulty in capturing the character and status of the bitcoin still makes it elusive for the existing rules of law. Some governments observe the evolution of the bitcoin market with interest; others try to work against it. All of this makes the bitcoin an intriguing subject for research.
The aim of this article is to present the original assumptions of the bitcoin system; trace the reactions to the bitcoin’s emergence in virtual reality, and next on the very real financial market; and analyze the reinterpretation of the idea that underlies the creation of the cryptocurrency. This article attempts to assess the bitcoin’s potential of achieving a seemingly impregnable position on the global financial market.

PlumX Metrics of this article

Author Biography

Magdalena Trzcionka, Jagiellonian University, Poland

PhD – is an Assistant Professor at the Faculty of International and Political Studies at the Jagiellonian University in Krakow. In her work she takes up issues concerning the economic democracy and the economy of values. Her main fields of interest are the holarchical model of organizations, the grass-root initiatives and constructive communication based on the Non-Violent. Contact address: magdalena.trzcionka@uj.edu.pl.

References

Aliber, Robert Z., and Kindleberger, Charles P. Manias, Panics, and Crashes. A History of Financial Crises. Seventh Edition. Palgrave: Macmillan 2015.

“A Simple Guide to Safely and Effectively Tumbling (Mixing) Bitcoins.” Darknet Market, July 10, 2015. Web. 28 March 2018. https://darknetmarkets.org/a-simple-guide-tosafely-and-effectively-mixing-bitcoins/.

Money Talks: Explaining How Money Really Works, edited by Nina Bandelj, Frederick F. Wherry, and Viviana A. Zelizer. Princeton, NJ: Princeton University Press, 2017.

Baron, Jashua, et al. National Security Implications of Virtual Currency. Examining the Potential for Non-state Actor Deployment, Santa Monica: RAND Corporation, 2015.

“Bitcoin is Not Democratic.” Medium. Web. 28 March 2018. https://medium.com/@beautyon_/bitcoin-is-not-democratic-81f87158250a#.eoz5xe8nh.

Bollier, David, and Conaty, Patrick. “Democratic Money and Capital for the Commons: Strategies for Transforming Neoliberal Finance Through Commons-Based Alternatives.” Heinrich Böll Foundation, 2015. Web. 27 March 2018. http://www.boell.de/sites/default/files/democratic_money_capital_for_the_commons_report_january2016.pdf.

Casey, Michael J., and Vigna, Paul. “Bitcoin and the Digital-Currency Revolution.” The Wall Street Journal, January 23, 2015. Web. 3 March 2018. http://www.wsj.com/articles/the-revolutionary-power-of-digital-currency-1422035061.

Changes in modus operandi of Islamic State Terrorist Attacks. Review Held by Experts from Member States and Europol on 29 November and 1 December 2015, Hague, January 18, 2016. Web. 28 March 2018. http://www.wienerzeitung.at/_em_daten/_wzo/2016/01/25/160125_1356_europol_dokument_aenderungen_in_der_verfahrensweise_mit_is_terroranschlaegen_pdf_englisch.pdf.

Christensen, Clayton M., Raynor Michael, and McDonald Rory. “What Is Disruptive Innovation?”. Harvard Business Review 93, 12, 2015: 44-53.

CSBS Model Regulatory Framework for State Regulation of Certain Virtual Currency Activities, September 15, 2015. Web. 28 March 2018. https://www.csbs.org/regulatory/ep/ Documents/CSBS-Model-Regulatory-Framework(September%2015%202015).pdf.

Dabla-Norris, Era et al. “Causes and Consequences of Income Inequality: A Global Perspective”. IMF Staff Discussion Note, June 2015. Web. 28 March 2018. https://www.imf.org/external/pubs/ft/sdn/2015/ sdn1513.pdf.

“Deep Shift Technology Tipping Points and Societal Impact.” World Economic Forum Survey Report, September 2015. Web. 28 March 2018. http://www3.weforum.org/docs/WEF_GAC15_Technological_Tipping_Points_report_2015.pdf.

„Deutsche Bank zapłaci 258 mln dol. za pranie brudnych pieniędzy”. TV24BIS, November 5, 2015. Web. 28 March 2018. http://tvn24bis.pl/pieniadze,79/deutsche-bank-zaplaci-kareza-pranie-brudnych-pieniedzy,591964.html.

Dougherty, Carter, and Farrell, Greg. “Treasury’s Cohen Sees No Widespread Criminal Bitcoin Use”. Bloomberg, March 18, 2014. Web. 28 March 2018. http://www.bloomberg.com/news/articles /2014-03-18/treasury-s-cohen-says-regulation-helps-virtual-currencies.

Dowbor, Ladislaw. Demokracja ekonomiczna: Alternatywne rozwiązania w sferze zarządzania społecznego. Warszawa: Książka i Prasa, 2008. Web. 20 January 2016. http://dowbor.org/2008/05/demokracja-ekonomiczna.html/.

Ferro, Shane. “You Can Now Track Bitcoin on the New York Stock Exchange.” Business Insider, May 19, 2015. Web. 28 March 2018. http://www.businessinsider.com/the-nyse-bitcoin-index-2015-5.

Friedman, Milton. “The Fed’s Thermostat.” The Wall Street Journal. Eastern Edition. New York. 19 August 2003: A8.

Goldman, Zachary K. et al. „Terrorist Use Of Virtual Currencies”. Energy, Economics & Security, May 2017. Web. 27 March 2018. https://www.lawandsecurity.org/wp-content/uploads/2017/05/CLSCNASReport-TerroristFinancing-Final.pdf.

Haczyk, Dariusz. „Kupno bitcoinów zwolnione z VAT – tak orzekł Europejski Trybunał Sprawiedliwości.” Wirtualna Polska, December 14, 2015. Web. 28 March 2018. http://finanse.wp.pl/kat,1033767,title,Kupno-bitcoinow-zwolnione-z-VAT-tak-orzekl-Europejski-Trybunal-Sprawiedliwosci,wid,17926717,wiadomosc.html?ticaid=115d75.

Haczyk, Dariusz. „Wall Street stawia na Bitcoin. Zainwestowali w Coinbase.” Money.pl, January 23, 2015. Web. 28 March 2018. http://www.money.pl/gospodarka/wiadomosci/artykul/wall-street-stawia-na-bitcoin-zainwestowali,36,0,1698340.html.

Hendrickson, Joshua, et al. “The Political Economy Of Bitcoin”. Economic Inquiry, November 2, 2015: 1-15, http://dx.doi.org/10.2139/ssrn.2531518.

Henisz, Witold J., and Zelner Bennet A., “The Hidden Risks in Emerging Markets”. Harvard Business Review, April 2010. Web. 27 March 2018. https://hbr.org/2010/04/the-hidden-risks-in-emerging-markets.

Higgins, Stan. “12 More Banks Join Blockchain Consortium R3.” Coindesk, December 17, 2015. Web. 28 March 2018. http://www.coindesk.com/twelve-banks-blockchain-consortium-r3/.

Hülsmann, Jörg Guido. “Deflacja: największe mity.” Instytut Misesa, September 23, 2005. Web. 23 March 2018. http://mises.pl/blog/2005/10/23/234/.

“Japan to Consider Regulating Cybercurrency Exchanges after Mt. Gox Debacle.” Japan Times, December 17, 2015. Web. 23 March 2018. http://www.japantimes.co.jp/news/2015/12/17/business/japan-panel-eyes-registration-system-for-virtual-currency-exchanges/#.VqDiNyrhDWL.

Johanisova, Nadia, and Wolf, Stephan. “Economic Democracy: A Path for the Future?”. Futures 44, 2012: 562–570, https://doi.org/10.1016/j.futures.2012.03.017.

Kawa, Łukasz. “Bitcoin Is Officially a Commodity, According to U.S. Regulator.” Bloomberg, September 17, 2015. Web. 27 March 2018. http://www.bloomberg.com/news/articles/2015-09-17/bitcoin-is-officially-a-commodity-according-to-u-s-regulator.

Kervick D., “Bitcoin’s Deflationary Weirdness.” New Economic Perspectives, April 24, 2013. Web. 1 April 2016. http://neweconomicperspectives.org/2013/04/talking-bitcoin.html.

Kharpal, Arjun. “Why Bitcoin’s Tech Could ‘Change Everything’ for Banks.” CNBC, December 31, 2015. Web. 27 March 2018. http://www.cnbc.com/2015/12/31/blockchain-whatthe-big-banks-say-about-the-tech.html.

Kornai, Janos. Dynamizm, rywalizacja i gospodarka nadmiaru. Dwa eseje o naturze kapitalizmu. Warszawa: Fundacja Gospodarki i Administracji Publicznej, 2014.

Kowalik, Tadeusz. „Kapitalizm kasyna.” Kryzys. Przewodnik Krytyki Politycznej, Warszawa: Wydawnictwo Krytyki Politycznej, 2009: 68-88.

Kroszner, Randall S. “The Future of Banks: Will Commercial Banks Remain Central to the Financial System? University of Chicago, Booth School of Business, and NBER.” University of Chicago, March 2015. Web. 27 March 2018. https://www.frbatlanta.org/news/conferences/2015/0330-fmc/proceedings.aspx.

Larson, Eric. “HSBC Faces ‘Much Work’ on Money-Laundering , U.S. Says.” Bloomberg, April 1, 2014. Web. 27 March 2018. http://www.bloomberg.com/news/articles/2014-04-01/hsbc-faces-much-work-in-money-laundering-accord-u-s-says-1-.

Handbook of Digital Currency: Bitcoin, Innovation, Financial Instruments, and Big Data, edited by David Lee Kuo Chuen. Academic Press, 2015.

Lee, Timothy, B., and Tsukayama, Hayley. “Bitcoin Industry Reeling as Authorities Shut Down Silk Road Online Marketplace”. Washington Post, October 2, 2013. Web. 27 March 2018. https://www.washingtonpost.com/business/economy/bitcoin-industry-reeling-asauthorities-shut-down-silk-road-online-marketplace/2013/10/02/961b105a-2ba1-11e3-97a3-ff2758228523_story.html.

Mączyńska, Elżbieta, and Pysz, Piotr. „Liberalizm, neoliberalizm i ordoliberalizm.” Ekonomia dla przyszłości, fundamentalne problemy teorii ekonomii i praktyki gospodarczej. IX Kongres Ekonomistów Polskich, edited by Elżbieta Mączyńska. Warszawa: PTE, 2014: 221-247.

Mauldin, John. “The 5 Phases of Bitcoin Adoption.” Forbes, December 23, 2014. Web. 27 March 2018. http://www.forbes.com/sites/johnmauldin/2014/12/23/the-5-phases-ofbitcoin-adoption/#2715e4857a0b79529a745354.

Money Laundering Using New Payment Methods. FATF Report, October 2010. Web. 27 March 2018. http://www.fatf-gafi.org/media/fatf/documents/reports/ML%20using%20New%20Payment%20Methods.pdf.

Murphy, Daniel. “Money Laundering and The Drug Trade: The Role of the Banks.” Global Research, September 30, 2013. Web. 27 March 2018. http://www.globalresearch.ca/moneylaundering-and-the-drug-trade-the-role-of-the-banks/5334205 4.01.2016.

Nakamoto, Satoshi. Bitcoin: A Peer-to-Peer Electronic Cash System. Web. 27 March 2018. https://bitcoin.org/bitcoin.pdf.

Nogacki, Robert, and Panas, Adriana. “Bitcoin a podatek VAT”, Skarbiec. Kancelaria Prawna, 2014. Web. 27 March 2018. http://www.kancelaria-skarbiec.pl/publikacje/bitcoiny-podatek-vat.html.

“One Bank Research Agenda.” Bank of England Discussion Paper, February 2015. Web. 23 March. http://www.bankofengland.co.uk/research/documents/onebank/discussion.pdf.

Pieters, Gina, and Vivanco, Sofia. “Financial Regulations and Price Inconsistencies across Bitcoin Markets.” Information Economics & Policy 39, 2017: 1-14, https://doi.org/10.1016/j.infoecopol.2017.02.002.

Piketty, Thomas. Kapitał w XXI wieku. Warszawa: Wydawnictwo Krytyka Polityczna, 2015.

Reinhart Carmen M., and Rogoff, Kenneth S. This Time Is Different. Eight Centuries of Financial Folly. Princeton: Princeton University Press, 2011.

Ratajczak, Marek. “Finansyzacja gospodarki”. Ekonomista, 3, 2012: 281-302.

Record of Meeting, Federal Advisory Council and Board of Governors, May 9, 2014. Web. 27 March 2018. http://www.federalreserve.gov/aboutthefed/fac-20140513.pdf.

Rizzo, Pete. “Barry Silbert: Private Blockchains Will ‘Capitulate’ to Bitcoin.” Coindesk, September 22, 2015. Web. 27 March 2018. http://www.coindesk.com/barry-silbert-private-blockchains-will-capitulate-to-bitcoin/.

Rothbard, Murray. Tajniki bankowości. Warszawa: Fijor Publishing, 2007.

Samburaj, Das. “Russian Legislature to Review Updated Bitcoin-Ban Seeking Bill in February.” CCN.LA, January 12, 2016. Web. 27 March 2018. https://www.cryptocoinsnews.com/russian-legislature-review-updated-bitcoin-ban-seeking-bill-february/.

Savelyev, Alexander. “Contract Law 2.0: ‘Smart’ Contracts as the Beginning of the End of Classic Contract Law.” Information & Communications Technology Law 26, 2, 2017: 116-134. https://doi.org/10.1080/13600834.2017.1301036.

The Fintech 2.0 Paper: Rebooting Financial Services. June 2015. Web. 27 March 2018. http://www.finextra.com/finextradownloads/newsdocs/The%20Fintech%202%200%20Paper.PDF.

Wen, Yi, and Arias, Maria A. “What does money velocity tell us about low inflation in the U.S.?”. Federal Reserve Bank of St. Luise, September 1, 2014. Web. 27

March 2018. https://www.stlouisfed.org/On-The-Economy/2014/September/What-Does-Money-Velocity-Tell-Us-about-Low-Inflation-in-the-US.

Willms, Jessie. “New York Stock Exchange Launches Bitcoin Pricing Index NYXBT.” Bitcoin Magazine, May 19, 2015. Web. 27 March 2018. https://bitcoinmagazine.com/articles/new-york-stock-exchange-launches-bitcoin-pricing-index-nyxbt-1432068688.

Wirdum, Arron van. “Why Bitcoin Really Does Represent the Democratization of Money.” Bitcoin Magazine. Web. 27 March 2018. https://bitcoinmagazine.com/articles/bitcoin-really-represent-democratization-money-1395137137.

Downloads

Published

2019-02-08

How to Cite

Trzcionka, M. “The Bitcoin – Democratic Money in a Neoliberal Economy”. Ad Americam, vol. 19, Feb. 2019, pp. 155-73, doi:10.12797/AdAmericam.19.2018.19.11.

Issue

Section

Articles