Anyone paying attention to the recent financial or economic news is aware of the recent surge of interest in and purchasing of Bitcoin. The stubborn presence of Bitcoin in economic, financial, and general current events discourse leads me to wonder if this surge is merely a fad or a sign of something deeper. Personally, I am beginning to wonder if cryptocurrencies and their surge in popularity are a product of free markets failing to legitimize themselves in the eyes and outcomes of its main actors?
If so, then cryptocurrencies promise to persist indefinitely. Yet, as far as I can tell, most mainstream economists and political economists (and others) have insisted that these cryptocurrencies are merely bubbles. Were they not bubbles, and a genuine reflection of dissatisfaction with the outcomes that most economic actors are experiencing in today’s generally free markets instead (especially in the West), then the establishment of elite discourse will eventually be rushing to understand this new underground economy of currency at some point in the future.
As such, there remain some persistent questions that should be considered in establishing the seriousness and import of cryptocurrencies. First, what is it about the concept of cryptocurrencies that are ostensibly so popular so as to be driving interest in it? Secondly, is/can one aspect of this interest in cryptocurrencies plausibly be due to a belief in the illegitimacy of contemporary currency arrangements? Is there a real resistance by an “establishment,” and for what reasons are they resisting the legitimacy of cryptocurrency? Lastly, to what extent do cryptocurrencies offer any potential benefit and harm to society, and are those trade-offs worth it?
Beneath each of these questions lay a wealth of intellectual possibility. This wealth is constituted by a myriad of subquestions, each with its own significant intellectual history and literature. So too is this wealth constituted by the myriad of divergent conclusions that one could reach given the infancy of cryptocurrency’s life within our current paradigm of thought in economics and political economy (among other potentially interested disciplines).
Whatever the case, I think it notable that such a young, potentially paradigm leaping currency has caught enough interest to evoke commentary from elite discussants – and I am hooked on the thought of discovering what this popularity might mean for our current understanding in economics, political economy, and the future of social relations. For now, I think it is safe to say that cryptocurrency’s popularity can be partly pinned on the presumed illegitimacy of contemporary markets. For better or worse, the increase in inequality and the concentration of wealth into fewer and fewer hands is a real experience. If one admits to that fact, then it isn’t a large leap to take the next two steps: that this inequality is antithetical to the narrative and logic that drives beliefs in free markets, and hence their legitimacy; and two, that this experience of inequality makes it easy and likely that viable alternatives to this free market paradigm will be ever-more persuasive to economic actors, giving them a legitimacy of their own.
In other words, cryptocurrencies should not be taken for granted.