To begin with, Bitcoin at a protocol level is neutral; anyone can use it and there are no restrictions based on race, gender, or ideology. It is similar to other internet protocols in this regard, such as SMTP, which is used for email. Without permission, anyone can send or transact in bitcoins, and the network remains neutral. Because Bitcoin is permissionless, anyone can build applications on top of it without requiring approval from a centralized authority.
The Bitcoin code is open source, which means that anyone can access it and modify it. However, because the protocol is decentralized, any changes must be approved by a majority of the network in order to be implemented without breaking the chain. For example, changing or eliminating the 21 million bitcoin limit will be extremely difficult, if not impossible, to persuade the entire community to accept.
This makes Bitcoin more resistant to censorship because censoring transactions or changing the rules would require a coordinated effort by a majority of the network. Is it therefore democratic? Anyone can participate in the Bitcoin network because the code is open source and nodes can be run by anyone. However, it is not truly democratic because there is no vote and the rules are determined by the code. Some may argue that running a node or purchasing and using bitcoins constitutes voting, but this is not traditional voting because there is no authority to tally the votes.
Is Bitcoin anarchic? Because there is no centralized authority, it can be considered anarchic. Instead, the network is powered by decentralized nodes. Bitcoin is not managed by a single person or group. However, the protocol is immutable, or, as previously stated, highly resistant to change, and the rules apply equally to everyone. The software determines its economic parameters, and software refers to algorithms that enforce the rules automatically. So, in some ways, Bitcoin is more lawful than anarchic.
So, if Bitcoin isn’t a democracy and isn’t truly anarchy because it follows and enforces rules, what exactly is it? I believe it could be defined as a network of volunteers who run nodes that power the network, with each participant having an equal say in the rules and governance. Furthermore, no one is exempt from the network’s rules. As opposed to democracy or anarchy, this could be viewed as networked rules – a code of rules. Because the rules are based on code that cannot be changed arbitrarily and is applied to everyone without exception.
Some argue that Bitcoin is apolitical because it is not controlled by any government or financial institution. It may be regarded as apolitical due to its decentralized and permissionless nature. While this is correct, it does not imply that Bitcoin is apolitical. Bitcoin exists in the political realm, and its application is frequently political. Because no government or financial institution regulates Bitcoin, it is frequently viewed as a means to avoid government control and censorship. Others see it as a tool that can be used to undermine the current political system. Bitcoin is frequently viewed as an alternative to traditional fiat currencies, and some have used it to protest government policies. For example, in 2017, citizens of Venezuela started using Bitcoin to purchase goods and services after the government placed strict controls on the country’s currency. Furthermore, because Bitcoin is borderless and anonymous, it is seen as a way to avoid traditional banking systems, which are frequently viewed as corrupt or political.
The communities that have formed around Bitcoin are also political. For example, the Bitcoin community is largely comprised of people who hold libertarian or anarcho-capitalist political views. These people are very vocal about their belief in the importance of decentralization and self-sovereignty, two concepts at the heart of Bitcoin. As a result, while the Bitcoin protocol itself is not political, the communities that have sprung up around it most emphatically are.
Bitcoin, like many other forms of technology, is political. Technologies, especially socio-technical systems, are competing with politics. They are challenging and replacing traditional institutions, such as social media, artificial intelligence, communication, and education. Now comes money and finance. Governance will be the next frontier to be challenged. People like Peter Thiel and Balaji Srinivasan have already spoken out about it. As a result, when Silicon Valley proclaims, “This tech is revolutionary,” it is not merely a metaphor. It is literally a revolution sponsored by a few wealthy individuals in order to rally the masses to their cause.
However, we should make or be aware of the internal divisions within the tech communities. The bitcoin community may not agree with Peter Thiel or Balaji Srinivasan completely. There is also apathy or hidden antipathy toward Bitcoin among Silicon Valley VCs and founders, who would rather build their “revolutionary” technology on top of other blockchain networks, such as Ethereum or Solana. Of course, technical aspects of the network play a role in this, but it’s not just about technology. Bitcoin didn’t launch like many other Silicon Valley projects that are funded by VCs. Although Satoshi Nakamoto had to organize a community and do initial promotion in terms of explaining the value of the project. In a way, it was entrepreneurship, similar to how other founders do their job. However, he/she hasn’t raised any private funding for this project. Bitcoin emerged on the internet without relying on VCs or other types of private sponsorships. This different incentive/funding structure has been one of the most disputed topics among Bitcoin vs. Ethereum communities.