How Can Crypto-currencies Democratize Society?

Yesterday, September 26th of 2015, I attended the Reinvent Money event in Rotterdam, the Netherlands, that was organized by Paul Buitink. The goal of the event was to bring people together for a grand discussion on the future of our monetary system. This discussion on monetary reforms is totally necessary if one considers the current problems with the euro and Greece, banking scandals, the rise of bitcoin and the blockchain technology, and peer-to-peer lending.

The speakers list consisted of many prominent thinkers and activists who could share with a crowd that was mostly in favor of crypto-currencies their thoughts about the current monetary system and whether money should be reinvented.

Willem Middelkoop was the first speaker and talked about the Big Reset of the monetary system that is currently orchestrated by high level officials. Jakob de Haan, head of the research department at the Dutch Central Bank, was the second speaker and stated that he does not believe in an upcoming Big Reset. While defending central banks, he argued that central banks are necessary in order to stabilize the currency and he sees five aspects that central banks should fulfill:

  1. central bank independence;
  2. central bank transparency;
  3. using monetary policy instruments to stabilize the economy;
  4. banking supervision of not only independent commercial banks, but of the whole economy. In his opinion, the central bank should supervise the entire economic system instead of primarily addressing individual institutions;
  5. macro-prudential policies to avoid crises.

Other speakers included Max Keiser, Stacy Herbert, Vit Jedlicka (president of Liberland), Stephan Antonopoulos, Simon Dixon, Joris Luyendijk, Prof. Antal Lekety and some others. Some wanted to go back to a gold-based monetary system, others truly wanted to reinvent money through crypto-currencies, and a few wanted the system to stay as it is structurally. As a voluntaryist, I was quite disappointed that the pro-crypto-currency speakers saw it as a means to democratize society. I don’t fully understand what they mean with the word ‘democratize’ and how crypto-currencies could do that, but I’ve noticed that those speakers saw it as a means to make our political system more democratic. Maybe, they mean ‘anti-authoritarian’ as crypto-currencies would indeed limit the monetary powers of the government and the central bank. However, I’ve always understood it as a de-political money system that is disruptive enough to do away with the myth that government is needed at all to stabilize our currency, and hence that it would bring us closer toward a voluntaryist society – not toward a more democratic system. A democratic system, in my opinion, means a system in which the majority rules. Crypto-currencies give every individual the full ownership of their money. Thus taking personal financial affairs entirely outside the scope of government meddling, also if that government is democratically chosen.

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3 thoughts on “How Can Crypto-currencies Democratize Society?

  1. Great post Chhay Lin!

    I think that the pro-democracy arguments you heard were meant to assuage fears most Western Europeans may have towards market-based innovations. That is to say, I think they are simply making a sales pitch with an appeal to European standards of decency.

    There is also the issue of defining ‘democracy’. Ludwig von Mises, for example, made the argument that the market itself was democratic because it allows people to vote with their money. I lean more towards your definition (“a system in which the majority rules”), but when I read about democracy I try to take into account the fact that it has no standardized definition. It might be worth trying to hash out a definitive definition of democracy here on the blog!

    • Thank you Brandon. You may be totally right that they were trying to assuage the public.
      About defining ‘democracy’, I think we could consider Mises’ definition as ‘majority rule’ as well – as majority rule of the public over businesses through their ‘monetary votes’.
      Hm… In that sense, you could say that crypto-currencies democratize the market process of money creation. 🙂 Thank you for your comment, I haven’t seen it from this perspective yet.

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