Crypto-Current (038)

§3.8 — Setting out on the path to a cognitive integration of Bitcoin calls for both anticipation and critical retrospection, and in fact compels it. Bitcoin drives a migration long promised by transcendental philosophy, from naïve ontology to a practical acknowledgment of the essence of being as the criterion of reality (finally indistinguishable from absolute succession, or order in-itself).[1] What emerges is nothing less than an artificial universe, founded – groundlessly – upon a spontaneously-engineered consistency. Once it is granted, practically, that no assertion of truth can be effectively sustained against a predominance of cognitive capability, all prospect of Archimedean (epistemological) leverage is subtracted. Bitcoin at once systematizes and implements this insight within its cycle of auto-production, establishing the foundations of transcendental authority through a realization of semiotic singularity. Truth is that which survives a process of elimination biased against duplicity.

§3.81 — The elegance, or economy, of Bitcoin’s virtual universe is fully consistent with a certain ontological luxuriance, encompassing a population of agents (represented by accounts), territories (wallets), objects (coins and coin-fragments), events (transactions), a consensual history (the blockchain), and – providing an ultimate criterion of reality – matter (computing power). Such tropical frondescence is also ecological. It generates niches, as zones of specialization, competition, and proliferation. As with all cases of techonomic revolution, the result is a ‘Cambrian Explosion’ of unpredictable, cross-stimulated innovation. The very meaning of ‘species’ undergoes escalation. As a side-consequence of its unprecedented ontological severity, or selectivity, Bitcoin triggers a re-population of the world.

§3.82 — Given the common principle of viral hijacking and double-spending, any DSP solution makes an immediate contribution to the field of computer security. “Trusted third parties are security holes,” Nick Szabo writes.[2] Bitcoin as critique is immediately security innovation, because immanence is self-policing. Transcendent sources of protection are vulnerabilities. It follows that Bitcoin security threats are characteristically extrinsic, applying to the edges of its commercium, where violence and fraud can be targeted at ‘people’ (IRL-IDs) and their insecure human flesh-machines. Most crudely, an individual can be menaced with a weapon (in meatspace), and told to hand over his private key. Alternatively, residual intermediaries – entrusted with the safekeeping of bitcoins – can abscond with them. Such dangers are, however, exogeneous. Even when they are associated with Bitcoin in public perception, their origin lies elsewhere.

§3.83 — Bitcoin has yet to be hacked.[3] The principal security threat to Bitcoin is still conceived – as it was already at the origin – as a ‘51% attack’ in which a hostile party (or coalition) commands sufficient applied computing power to overwhelm the consensus, and subsequently re-configure the protocol to its convenience.This vulnerability is finally game-theoretical rather than narrowly technical, as are Bitcoin’s defenses against it.[4] Incentives are an integral factor. Stated with maximum crudity: Why would an attacker be motivated to destroy an asset that has already been captured? Subversion of Bitcoin requires that one first owns it, at least to the degree that its devaluation becomes a self-inflicted injury. These questions are addressed a little more fully in Chapter-4 (directly following).

§3.84 — Bitcoin is nothing less than a semiotic restoration – an Occidental analog of the Confucian rectification of signs – and actually something more, because it is irreducibly innovative (on the efficient model of critique). For the first time, the securitization of a sign, as an economic token, has been understood. Meaning becomes hard currency. The immense philosophical revolution is implicit: It can be demonstrably made impractical to lie. Thus, by a negative and ‘merely technical’ route, all prior discourse on truth has been bypassed. With Bitcoin, there is now a truth engine. The consequences are not easily delimited. Even if Bitcoin remains to be definitively comprehended as the long-anticipated end of philosophy, there has never previously been a more convincing model for it. We know, from around the back, what truth is now.

§3.9 — While this book contains numerous signs representing economic values, this does not mean that it is made – even partly – out of money. The expression ‘BTC 21,000,000’ – as it appears here and in comparable texts – evidently has no monetary value whatsoever. From this alone we can confidently presume that monetary signs have some crucially distinctive characteristic, which is only very inadequately captured by any general semiotic determination such as ‘representations of economic value’. A monetary sign is something more than a sign that means ‘money’. Money, nevertheless, is made out of monetary signs.

§3.91 — In order for signs to function as money, they have not only to represent value as a signification, or to indicate it (for instance as an account code), they also have bear it, as something else. Alongside the semiotic aspects of signification and indication – and even perhaps on occasions instead of them – monetary signs require the characteristic of commutation, collection, or allocation.[5] They involve real, rather than merely metaphorical, substitution or exchange, as a condition of possibility for expenditure. A language-user can spend time and energy emitting words, but the words themselves are not – in any rigorous sense – spent. Vocabulary is not consumed in the process of speaking or writing, because a word is not – unless merely figuratively – ‘passed’ from one party to another, but rather duplicated each time a message is communicated. Where a message is spread, or proliferated, money is transmitted – in accordance with the rules of double-entry book-keeping, and contrary to the dynamics of multiplication through double spending. When money is as such, it is added to one wallet or account only in being deducted from another. Whenever – in contrast – money operates in the manner of a linguistic sign, it is spent without cost, and rapidly reduced to worthlessness.

§3.92 — It would be convenient if the word ‘token’ were available to carry the sense of the allocative sign, and there is some indication that the word is being adopted in crypto-currency circles in this way, indifferent to potential interference (and confusion) from its previously established technical and philosophical usage.[6] In their ordinary deployment, tokens count as money. Yet precisely because they allocate more than they signify, their meaning has remained – overwhelmingly – lodged in obscurity. They circulate in immense numbers, saying little.

§3.93 — If a new semiotic settlement is to follow in the wake of the Bitcoin protocol, and its solution to the DSP, there is an alternative common term all-but destined – if not, in fact, simply destined – to be cemented into the foundations. The allocative sign is the coin. General acceptance, in this regards, requires only an increment of abstraction, accompanied by an automatic reversal. Once the crypto-currency ‘-coin’ suffix, rather than alluding to concrete specie, acquires the status of a defining model, the word ‘coin’ becomes the technically-precise bearer of a semiotic function. A coin, then, would be fully characterized as a unit of DSP-resolved currency, typically instantiated as a highly-virtualized, Internet-communicable ledger entry, reproduced on a blockchain.  

§3.94 — Beside the signifier and the index – or no less beneath them – is the coin.

[1] Melanie Swan, whose writings on Bitcoin are distinguished by their extraordinary visionary sweep, describes the cryptocurrency as “in some sense … a supercomputer for reality”. (This is a ‘sense’ that she proceeds vigorously to explore.) Unfortunately, her framework of understanding is impaired at its highest level by a propensity to abundance theorizing, under the sign of cornucopian illusion. This error is unfortunately common – and even typical – among those drawing upon transhumanist inspiration. As the genealogy of Bitcoin vividly demonstrates, the primary manifestation of digital abundance is not the supercession of the commodity, but spam. Bitcoin restores robust scarcity, precisely insofar as it filters-out spam money. …

[2] See:

[3] Bitcoin is an experiment in digital security. See:

For an examination of more exotic threats, in the emerging epoch of quantum computing, see Vitalik Buterin:…

[4] See the Bitcoin paper, section 6: “The incentive may help encourage nodes to stay honest. If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth.”

In this same vein, Morgen E. Peck asks: “Why trust Bitcoin, or more specifically, why trust the technology that makes Bitcoin possible? In short, because it assumes everybody’s a crook, yet it still gets them to follow the rules. … In old security models, you tried to lock out all of the greedy, dishonest people. Bitcoin, on the other hand, welcomes everyone, fully expecting them to act in their own self-interest, and then it uses their greed to secure the network.” This is of course simply liberalism, as it was once understood. Bernard Mandeville’s The Fable of the Bees had already securely apprehended the principle. Originality lies in the implementation.

[5] The task of completing the basic triad of semiotic dimensions is a voyage into terminological torment. For signs to fold-back so far into themselves is an invitation to madness. If ‘commutation’ is vulnerable to ruinous interference from its dominant mathematical usage, ‘collective’ buckles under its hyper-density of ideological associations. To collect is to accumulate. The most primitive money, Nick Szabo suggests, consists of collectibles. Yet a social collective, in its strong ideological sense, reduces property to its zero-degree (with the full suppression of exclusive use). To invoke ‘collectivism’ in the context of monetary semiotics, then, could quite reasonably appear as a gratuitous provocation, only partially excused by the entertainment potential it releases. Its abrasiveness would most likely prove culturally unsustainable.

[6] The most firmly-established technical determination of the word ‘token’ is that locked into the logical and philosophical ‘type / token’ distinction, which has been adopted into computer science and programming. It distinguishes a type or class of thing from a thing. Wikipedia illustrates the distinction through an unimprovable sentence from Charles Sanders Pierce: “There are only 26 letters in the English alphabet and yet there are more than 26 letters in this sentence.” The counting of letter-types and letter-tokens is different. Only in the latter case does the arithmetic incline to economics, opening to factors such as production capacity and cost, batch sizes, and supply limits. (Transition to the economic register occurs via the product prototype, and its special, initial, or unique costs.) This book refers ambiguously either to the output of an authorial and editorial process, or a unit from a print run. The digital complication of the distinction, or the meaning of an instance and its economics (encompassing the entire conceptual and practical problematic of intellectual property), is in this case especially evident. Typal property, of the kind found in IP, is reliably confounding. This coin, similarly, splits on the type / token fracture line, which divides it between its twin faces as an example of a class of coinage, and as a unit of currency. A ‘token’ in this sense has a definite relation to the idea of the non-duplicitous or allocative sign, since it isolates non-generic (or ‘numerical’) identity.

2 thoughts on “Crypto-Current (038)

Leave a Reply