June 19, 2018
EVALUATING DIGITAL CURRENCY’S USE IN FURTHERING GOD’S KINGDOM
Taken from Ethics & Religious Liberty Commission’s Light magazine Summer 2018: Navigating The Digital Age.
Have you heard the term Bitcoin? It’s an example of technology making the unimaginable, possible. But, is Bitcoin just another scheme to get rich quick? Is it a currency designed for criminals? Or could there be a role for Bitcoin to play in Christ’s redemption of a broken world? It’s a challenging concept, yet Christians have an obligation to explore how this new instrument of exchange, just like any other currency and technology, is under Christ’s final authority.
Last year, the world’s most famous cryptocurrency, or digital currency, saw its largest spike in price ever, bringing it mainstream media and investor attention. Even though the idea was first presented in 2008 and the software released in 2009, most people are still trying to wrap their heads around what Bitcoin is.
WHAT IS BITCOIN?
Bitcoin is the first feasible iteration of what was thought to be impossible: peer-to-peer transactions via the internet. A peer-to-peer transaction is the same as you handing someone cash at a garage sale and receiving a lawnmower in return. The only way buying a lawnmower online was viable before was through intermediaries and third-parties like banks, credit card companies, and services like PayPal to verify that cash had left your account and gone into the hands or account of the other person. Bitcoin is able to handle transactions of this type on the internet because of the underlying technology called the blockchain.
A blockchain, as David Siegel explains1 , is a shared ledger that everyone trusts to be accurate forever. Most commonly, ledgers are centralized, or owned by a firm or individual. Now, though, they can be kept on a decentralized blockchain, which allows new opportunities. Blockchains can serve a variety of functions where a reliable ledger is necessary, such as for property titles or voting systems. Discussions about Bitcoin can conflate the discussion of Bitcoin (the currency) and blockchains (the ledger). Think of Bitcoin, the currency, as an application running on the blockchain, or ledger.
Bitcoin is the earliest and most prominent example of what a blockchain can do. It provides a glimpse into the potential of a world where systems that require us to trust powerful corporations and governments can be replaced by decentralized systems maintained by people best able to help themselves and each other. Individuals in such a world have far more control over what they do and how they do it, both for good or ill. For the purposes of this article, Bitcoin will be an applied use of blockchain technology. Bitcoin and its descendants that use similar blockchain technology should not just be thought of as money or currency, but as technological platforms. The currency component is perhaps the most utilized and popular application of Bitcoin, but it is far from the only one. The high volatility and risk of Bitcoin as a currency and investment can distract from the more exciting implications of the technology. Thinking of Bitcoin only as a currency would be akin to thinking of the internet as only a platform for sending mail to one another.
WHAT SHOULD CHRISTIANS THINK OF BITCOIN?
Christians who ask what they should think of Bitcoin are essentially asking what they should think of any new technology. Too often, criticism and skepticism are the default starting points for thinking about advancements in digital technologies.
The first biblical account of technology could be considered when Adam and Eve fashioned leaves to cover their nakedness. Then, God did them one better—a 2.0 upgrade, if you will—by making them clothing out of animal skins. This taught humanity a lot about what it means to use technology. Leaves are certainly inferior to animal skins when it comes to protection, warmth, and durability. Bitcoin, blockchain, and cryptocurrency should be thought of in a similar vein. Even if it doesn’t replace cash or credit cards, perhaps it will lead to some other previously impossible innovation.
In their book, The Age of Cryptocurrency, Paul Vigna and Michael J. Casey start off on the right note for how Christians should think about Bitcoin. They tell the story of Parisa Ahmadi, who was a high school student in Herat, Afghanistan, at the time of writing. Parisa was enrolled in an online nonprofit film service called Film Annex, but due to laws in Afghanistan that prohibited women from holding bank accounts, payment for writing and film projects proved difficult. The authors recount how Film Annex started to pay its contributors in Bitcoin.
As previously described, Bitcoin’s peer-to-peer network allows users to send payments directly to each other, circumventing institutions that in this case would have prohibited Parisa from accessing her rightly earned money because she is a woman. As they say,
Indeed, bitcoin does not know your name or gender, so it allows women in patriarchal societies, at least those with access to the Internet, to control their own money. The importance of this cannot be overstated . . . While not a panacea, this blast of cutting-edge, twenty-first-century technology offers real promise as a way to help unshackle an entire swath of the human population (pp. 2-3).
Anything with that kind of promise deserves Christian attention and the Spirit-filled ingenuity of Christian inventors and investors.
Christians should also consider the tremendous need for the unbanked to have access to money. Jerry Brito at Coin Center, a public policy group in Washington, D.C., notes that 2.5 billion people on earth are without bank accounts. Yet, 6 billion people will have smartphones by 2019. That leaves a large space for Bitcoin and other cryptocurrency developers to make and provide services alleviating millions, if not billions, of people from poverty. Everyone with a smartphone theoretically has access to the Bitcoin network.
Access to monetary systems, of course, does not spell salvation for the world. However, access to capital can allow people to fully develop and pursue their Godgiven interests and abilities. For example, World Vision’s work of providing livestock and property to the rural poor is rightly motivated by this fundamental belief.
ARE COMMON CRITICISMS MISGUIDED?
We are only in the 10th year of this technological experiment—into a new way of operating. As with any experiment, like the example of the early internet, there have been failures, such as the theft of 850,000 Bitcoins from Mt. Gox; the failure of the promising 37Coins; and the hack of The DAO, a decentralized organization that ran on Ethereum.
In addition to fears over failures, two common critiques of Bitcoin seem to be:
1. It was created as an anonymous digital currency for criminal activity and;
2. Ultimately, it was designed to subvert governmental authority.
Yet, both of these critiques are mistaken.
Many of these criticisms could also be leveled against cash. Bitcoin is often referred to incorrectly as an anonymous currency. However, for every illicit and illegal activity carried out via Bitcoin, there is likely exponentially more wrongdoing done with cash. Cash is truly anonymous; Bitcoin is pseudonymous. Every transaction is made publicly available as a feature of the system. Think of it as inverse of credit card transactions. With credit cards, the transactions are private, but the names are public. With Bitcoin, the transactions are public, but the real names are private.
Bitcoin actually helped law enforcement catch the Silk Road founder Ross Ulbricht, aka Dread Pirate Roberts. To catch him, they followed him into a library, staged a distraction after he had opened his laptop, then sprung for his laptop with all its access to Silk Road accounts and his credentials. From there, law enforcement could backtrace his transactions as recorded in the blockchain. The same technique is impossible with cash.
The argument that Bitcoin was created for illicit and black market transactions is also misguided. It’s true that Bitcoin was developed in order to dispense with middlemen. However, there is no evidence of a nefarious motivation from Bitcoin’s creator, Satoshi Nakamoto. As Nakamoto stated in the 2008 paper that began this whole endeavor, “What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” This was merely a new technological platform that some have used for immoral purposes—just like cash.
Furthermore, there are many justifiable reasons for avoiding third parties. Sometimes they are unreliable, like countries that undergo regime changes or political and economic crises. Many times, the world’s poor are marginalized and do not have access to traditional banking systems. Bitcoin removes the need to configure a new set of complex institutions.
Christians, in particular, should be wary of unjust institutions because Christian history is replete with persecution. Imagine being able to give directly to the Christian family and missionaries you know in Iran, instead of risking their lives by sending through channels closely watched by a hostile government. For now, this might be suboptimal, but these are still the early days of this technology.
Finally, whether as a fad or a global revolution, new technologies like Bitcoin are not a cause for alarm for the believer. They should be viewed in the context of Christ’s supremacy, his redemptive plan, and his invitation into that redemptive plan. Christians, by definition, are not governed by fear, no matter how compelling a fearful attitude might be. Rather, Christians should engage with this and other technologies, seeking to understand the nuances, underlying theories, and how they could be a part of how the kingdom of God is made visible and demonstrated on the earth—“thy kingdom come.”
New technologies should never be examined in a vacuum. Societal changes will happen along the way that will help us adapt as they develop, demonstrating the creativity and resilience of God’s kingdom. Christians, of all people, shouldn’t shirk from an honest examination of what may have bearing on poverty alleviation for millions. Instead, the future and its technological advancements should always be faced with the bright outlook of Christ’s supreme role and the care he has for us in it.
