UN report: Bitcoin community's tendency towards "tech colonization"

Baozou Comment : This report from the UNRISD department of the United Nations discusses digital currency and blockchain technology from a relatively macro perspective. In particular, he has a different view on the technology-only theory of the traditional Bitcoin community, and believes that many existing social problems cannot be completely solved by technology alone. Bitcoin may have the ability to weaken the financial system of third world countries, but it may cause unknown consequences. Many fanatical ideas in the Bitcoin community are out of touch with the "cruel social reality." He believes that blockchain 2.0 technology may be able to better solve these problems.

Translation: Prince Gong

A new United Nations report argues that the Bitcoin community is prone to “techno-colonial solutionism” and “techno-libertarian evangelism,” with the community viewing digital currency as a solution for developing countries.

The report, titled “How Can Cryptocurrency and Blockchain Technology Play a Role in Building Social and Solidarity Finance?”, was written by independent researcher and consultant Brett Scott for the United Nations Research Institute for Social Development and explores the fundamental properties of Bitcoin and discusses the technology’s potential applications in remittances, cooperative structures and micro-insurance systems.

Reply to WeChat ID "Blockchain Pencil" and keyword "UN Report" to view the paper "The Role of Digital Currency and Blockchain Technology in Building Society and Trusted Finance"

However, it also raised some potential "concerns and points of conflict", such as the bitcoin community's "solutionist" tendency to believe that technology is supreme and its political philosophy of "enthusiastic preaching" of libertarianism.

In contrast, the report believes that blockchain 2.0 technology has a "more obvious community economic concept" and has the potential to achieve "large-scale collaboration" compared to Bitcoin.

Out of touch with the “cruel social reality”

According to Scott, digital currency is based on the principles of collaborative open source and a way to achieve social trust and mutual assistance through peer-to-peer networks.

However, he said the image of Bitcoin has long been associated with “speculators, profit-seeking entrepreneurs, free-market fundamentalists, and technocrats,” according to Yelowitz and Wilson’s 2015 paper, “Characteristics of Bitcoin Users.”

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While Bitcoin has been touted as a solution for the unbanked in developing countries, there are big questions about whether the digital currency can work in countries with limited internet access and weak network infrastructure.

In addition, for people who know less about technology, how to build their trust in Bitcoin is also a problem, and the use of Bitcoin is highly dependent on the Internet and electricity.

Scott concluded that without addressing these issues, the Bitcoin community “is unlikely to break through the harsh social realities of many poor countries.”

He added,

"There is often some aggressive rhetoric in the community and concerns about the unequal distribution of wealth in the system that seems - at first glance - to be at odds with those ideals of a society and economy working in a collaborative way."

The Internet May Not Be a Solution

Scott also took the opportunity to make a more political critique, saying that those who promote Bitcoin as the "ultimate currency" are suggesting "a desire to 'escape the Internet' rather than seeking fundamental solutions to the country's most basic conditions."

Advocating bitcoin adoption by “weak” nations could be a short-term solution at best, he said: “Weakening the power of the state leads to the disintegration of institutions.”

bySrett Scott

He continued:

“Trying to break up the powerful banking monopoly through Bitcoin is one thing in the United States and another in other countries. Countries like Zimbabwe may be the opposite. What they need is to strengthen the integrity of the banking system, which requires a difficult and long-term political struggle to achieve.”

The author further cited the example of "technological free will preaching" and "the mission of blockchain in developing countries is only viewed as technology-oriented and market-oriented, which will convey an 'anti-national' message."

Technology doesn’t operate in a vacuum, he said, and likewise, the bitcoin system isn’t just “undermining all the rights of poor countries.”

Potential in some areas

Finally, Scott acknowledged that Bitcoin and blockchain technology have potential in certain situations, but he said

“The community of this technology is full of enthusiasm and experimentation, and it is currently tending to grow into a disruptive technology startup culture with meritocracy and technology at its core.”

For the future, he suggested further research into how the technology can be applied in “different cultural and political contexts that people with real struggles face.”