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Bitcoin at Porcfest, Part 5: Conclusion

Op-ed - Bitcoin at Porcfest

By the end of the Porcfest, it has become clear that Bitcoin has become a standard tool in the libertarian’s toolbox. Over the course of six days and dozens of presentations, Bitcoin has been mentioned more often than even old stalwarts like gold, silver, cryptography, jury nullification and the second amendment. The majority of stores have come to accept it, and the efficiency of Bitcoin transactions has been steadily improving over the course of the week as merchants and consumers alike have gotten better at using Bitcoin wallets. With the exception of about twelve hours of partial downtime on Friday, Lamassu’s Bitcoin-only wifi worked successfully all throughout the week, although sometimes more slowly than expected. The Bitcoin price itself has been remarkably stable throughout the event, arguably breaking out of a medium-term downtrend and holding steady at $100-$113.

One of the greatest problems that Bitcoin adoption has been facing to date is that adoption was simply too sparse for any kind of Bitcoin economy to be practical. Some merchants could be convinced to accept it, but by and large Bitcoin has only been able to grow through a small number of disparate online retailers accepting it on the internet. Furthermore, many of these retailers were only willing to accept Bitcoin because BitPay allowed them to immediately, and cheaply, convert any bitcoins that they receive to cash, so Bitcoin’s key advantage, its ability to bypass the inefficiencies of the traditional banking system, never existed in practice. It has always been a commonly held position that in order for Bitcoin to truly grow it would need to form a closed-loop, or at least multi-step, economy; that is, instead of a customer buying BTC from Coinbase, sending it to the merchant and the merchant having the bitcoins converted back through BitPay, there should be at least one step in between of someone earning bitcoins in order to spend them.

Over the past two years, such a thing has started to happen all on its own. BitPay’s Tony Gallippi reported that merchants tend to initially take the “safe” option of immediately converting all bitcoins that they receive, but eventually moving over to keeping a growing part of their earnings. Lamassu’s Josh and Zach Harvey are among the many Bitcoin fans that have convinced some of their own suppliers and contractors to take BTC, and almost certainly at least one of them is using some of the bitcoins to shop at Bitcoin-accepting stores.

What has just taken place at Porcfest, however, shows a completely different path that Bitcoin can take to success: take over an entire community. Communities are defined as groups of people that interact with each other much more often than with the general population; local towns and villages, schools, large workplaces and internet forums all to some extent constitute communities. If people in a community interact by buying and selling goods and services, as opposed to just talking (as happens with many internet communities, for example), then introducing Bitcoin to that community is a very efficient way of generating that multi-step, or possibly even closed-loop, economy all at once.

Now, consider what has been happening in the libertarian movement in the past few years alone. First, the Free State Project has grown from a few thousand members to over fourteen thousand, just six thousand away from “triggering the move” – the point where, once the project has gathered twenty thousand members, everyone who signed up is expected to move to New Hampshire at the same time, potentially exerting an entire 2 influence over the vote of the entire state. Precious metals guru Doug Casey has set up La Cafayate de Estancia, an intentional community in Argentina, and at Porcfest the anarchist and Bitcoin entrepreneur Jeff Berwick has announced his intent to do the same, although with a more expansive aim, in the nearby and, by South American standards, very business-friendly Chile. Peter Thiel has donated $1.25 million to the Seasteading Institute, a group involved in research and promotion efforts in creating self-sustaining communities floating on the sea, and some in the institute have since split off to create Blueseed, a business seeking to actually do just that off the coast of Silicon Valley in 2014, and at the Bitcoin conference in San Jose Edan Yago announced the existence of a semi-secret project to create “the world’s first cryptocurrency-based political zone” – in short, the Hong Kong of the Americas with a Bitcoin twist. The fact that these communities are just beginning to surge into the mainstream at the exact time that Bitcoin needs them most seems like nothing short of a match made in heaven.

It is crucially important to point out that the concept of intentional communities is not new, and is not even usually libertarian. Many of the original settlements in the New World first started out as fleets of pilgrims seeking escape from persecution and the opportunity to pursue what they saw as a new way of life. In the early 20th century, Israeli kibbutzim emerged, serving as collective communities based on agriculture. The entire concept of utopian socialism, an 18th and 19th-century school of thought that heavily influenced philosophers like Karl Marx, has given rise to hundreds of intentional communities around the world; some form of collectivism remains the dominant ideology of intentional communities today.

A related concept is “phyles”, a more modern concept of intentional community promoted by writers and philosophers such as Doug Casey, David de Ugarte and Neal Stephenson, that combines online and offline aspects, operating on a global scale while providing real-world services to its members. Phyles are not new; perhaps the single most successful one in history is in fact the Catholic Church. However, the growth of the internet has given the idea of phyles a unique opportunity for a sudden, and hyper-digitized, resurgence. And in these phyles Bitcoin has the chance to take on a crucial role. Bitcoin is arguably the only financial medium that can be used both internationally and in person. Cash is limited to one nation, and credit cards require too much infrastructure on the merchant side to be useful in person, leaving Bitcoin as a unique alternative ideally suited for the present, and future, phyles of the 21st century. One deliberate attempt to create a phyle, Stan Stalnaker’s Hub Culture, has already announced its intent to work with Bitcoin with its combined Ven-Bitcoin digital currency fund.

Targeting the intentional community movement, including phyles and secessionist groups like the Free State Project, will by no means be the key to Bitcoin’s sudden and massive success. The mainstream is far from accepting such ideas, and barring outright monetary collapse there is no clear and realistic roadmap that will lead to the general public embracing any alternative to having most services provided by traditional corporations and states in the next decade. Aside from that small percentage of the population that is naturally geared toward being early adopters, social progress is necessarily cumbersome and slow. However, the fact that Bitcoin’s superior efficiency is only truly realized in the context of a closed-loop economy, combined with its unique status as both an effective local currency and what may well be the world’s first truly transactional one, is clear evidence that the two movements can benefit greatly from working together in the decades to come. After the Bitcoin conference in 2013, which some activists in radical organizations like unSYSTEM have denounced as excessively corporate and capitulationist, many are desperately searching for a way to reclaim the currency’s idealism. This is it.