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Cryptogenesis: The Society of the Spectacle in the Cryptocurrency Ecosystem

November 26, 2018
Matan Shapiro


Cryptogenesis: The Society of the Spectacle in the Cryptocurrency Ecosystem

The expansion and normalization of cryptographic money is less dependent on the dollar-equivalent value of different coins and tokens as much as it is contingent on the acceptance of cryptographic tools as mediators of group identity. To be more precise, mass adoption is contingent on prevalent imaginaries of decentralization and distribution more than it is about rational cause-effect calculations or economic and financial considerations.

We are indeed witnessing an emergence of sort, an opening, a process of crawling legitimization despite encroachment from regulating authorities. It is a process that I call ‘cryptogenesis’.

The meaning of the term is pretty straight-forward. ‘Genesis’ stands for the re-imagining of how people navigate social relations, a conceptual map premised on ‘distributed’ coordinates as opposed to ‘centralized’ anchors. ‘Crypto’ stands for the contemporary dominance of technological utopias that push towards a sociality increasingly mediated by technologies of encryption, both as a form of surveillance from ‘above’ (i.e. state and corporate apparatuses) and as a form of fencing or avoidance from below (i.e. citizen X, Y and Z).

Taken together, Cryptogenesis is the ongoing process of endorsement and justification of the adoption of cryptographic tools in everyday transactions of values (which I think it is possible to define quite widely as economic, aesthetic and ethical), along with the recreation of a processual ‘logic’ that alternately associate with or dissociate these transactions from established economic and political-economic ideologies in the contemporary Global North.

All in all, cryptogenesis is an emergent cultural cosmology in late-capitalism, that is, a coherent framework that supplies certain explanations or narratives about the origin of power in society, the boundaries that segregate between those who are ‘in’ and those that remain ‘outside’, and the different myths and rituals that sustain that global social network of a multiplicity of seemingly disconnected full nodes and peers in a state of ongoing communication.

A cosmology here is, of course, a metaphor taken from physics, but it is near enough; in the crypto-sphere there is a ‘big bang’ that came with Satoshi Nakamoto, there are relational trajectories into the future and lines of flight in provisory hack-proof wallets, space-time curves on the blockchain, planets and ‘ecosystems’ in different sizes, and even burning supernovas and black holes and comet-like rising stars as well as extra-human life-forms such as bots and crypto-cats and a dogecoin.

It is a new frontier on cyberspace, which people are eager to explore, and cryptogenesis is the term I use to encompass the kinds of human imaginaries, logics, and convictions that make its exploration possible.

The Spectacle

In his book The Society of the Spectacle (1972), French scholar Guy Debord argues that modernity has substituted authenticity, ephemerality and experience of the concrete force of reality with representation. Debord claims that this happens primarily through the modular and mimetic reproduction of appearances as commodified subcultural styles. Appearance — that is, the desired way of representation of things, an aesthetic that is culturally acceptable — is determined by commodified objects, which always represent something they are not and quantified regardless of their real value.

A bottle of perfume may cost one dollar to produce but it sells for a 100.

It is an appearance in and of itself, which justifies the desire to appear in a particular way, to smell in a particular way, to substitute real value with symbolic value, which also produces an image, a status. Appearances, and especially images, thereby force into being a fabricated, inauthentic experience of social relations. The appearance, the consumed image itself, becomes a relation that mediates between people. It substitutes the direct experience of any situated encounter with its collectively-oriented image, which precedes the content of the interaction and therefore defines its meaning.

This increasingly creates a society in which every type of relationship is mediated through the reciprocal reproduction and consumption of images that encapsulate false meanings.

In order to deviate away from the unifying tyranny of the consumed image, Debord advocates a ‘return’ to concretely individualized experiences that emphasize immediacy, recognizability, and direct impact. He argues that through the production of counter-images and other disruptive tools it may become possible to seize the ephemeral unknowability and unpredictability of everyday life, if only momentarily, thereby actively resisting the reifying power of the image in late capitalism.

For Debord this is a revolution, the ultimate response to the tendency to accept a bureaucratic logic and machinery, which in late-modernity increasingly governs more and more aspects of the civil order in ways that very often constitute a subjectivity premised on docility, passivity, and simulacrum. He insists that such ‘revolution’ must negate the very idea of the spectacle by way of rejecting commodity fetishism. Disrupting the ‘spectacle’ can only be efficient if the act of disruption disobeys the very root of the system of production and consumption in late capitalism, for, if it fails to do so, negation itself would become just another aspect of the spectacle, its own refraction, which perpetuates the ideological premises it readily prescribes.

Cryptogenesis and the Spectacle

To use Debord’s terminology, cryptocurrency is both a hyper-inflated version of ‘the autonomous movement of the non-living’ (Thesis 2), which is at the technological core of the Spectacle, AND the actual social activities by which the spectacle is disrupted, fragmented and negated. A sort of paradox.

Evidently, the emergence of Bitcoin has, on the one hand, created an alternative class of assets that replace authentic human relations in a market where values were determined almost exclusively through the fluctuating relations between digital goods. But, and this is the key tension, it has simultaneously produced a system in which direct engagement between persons always-already assumes a high level of individual autonomy, self-reliance and the strengthening of personal boundaries which is the very rejection of the numbing effects of the Spectacle. It is the reworking of relations between commodities, which is the nature of Spectacle, back to reflect direct relations ‘between men and classes’ (Thesis 24).

Guy Debord’s analysis becomes very relevant here precisely because it can be reformulated more subtly, beyond the binary distinctions he has created, to understand how the spectacle of commodity/asset fetishism intrinsically produces its negation within its own mode of operation. And this is very interesting anthropologically both as a critical comment on Debord’s work at the theoretical level and as an analysis of contemporary socioeconomic processes at the ethnographic level. Here the situationist revolution that Debord tried to promote has already occurred almost spontaneously due to the global distribution and decentralization of the means of production of appearances.

I am referring here to the exponential acceleration of computational capacities and the widespread distribution of these technologies around the world, which have made it possible to celebrate individual experiences — and profit from them — in ways that were barely imaginable in the early 1970s. This is not a tactical straw man, but a credible description of what made Facebook and Twitter and Instagram and YouTube what they are today; people started to produce, edit, ‘share’, cut, paste and disperse self-proclaimed authenticities in unparalleled scales.

Political ideologies, advertisement and marketing industries, as well as economic rationalism, often merely followed, rather than initially conditioning or determining people’s desires for personalized time-frames and online spaces. Any way you choose to look at it, from either side of the equation, this is a tautological or recursive process, I think, not causal.

The Spectacle of global late-capitalism itself has therefore made it possible to produce that which fragments it from within. This, as Debord correctly observes, paradoxically serves to reaffirm its inherent logic, but at the same time it also changes that very logic in the course of its acting-out.

In a distributed or decentralized world, wherein multiple parallel ‘truths’ are accepted as credible, such paradox is no longer even considered a problem, but rather, a virtue. In this state of affairs, as opposed to Debord’s prediction, the Spectacle of the relations between commodities (which substitutes relations between people) carries an ontological significance. It is experienced as something real. The bots have a life of their own, even if they are merely dumb machines.

The interesting empirical question for me, to which I now turn, is how this experience of realness is cultivated and made manifest in the cryptocurrency social space.

Cryptogenesis and Blockchain

The structural dynamic I tentatively call cryptogenesis is contingent, in the case of cryptocurrencies, on the operation of the blockchain. On the one hand, the blockchain includes a more centralized, ‘Spectacular’ manifestation, and on the other hand it includes a decentralized, ‘subversive’ manifestation. The former is related to its adoption by regulators, entrepreneurs, and startup companies in the fintech industry, all of which work well within the logic of established capitalist ideologies. The latter is the case of anarcho-libertarian enhancements of Bitcoin and a few other cryptocurrencies, which overtly seek to constitute a parallel, unregulated, extra-corporatist system for the transaction of values. I will briefly summarize these two aspects.

Firstly, take the typical perspective of an occasional maximalist in the Bitcoin world. Blockchain here is seen narrowly not as a ‘technology’ but as a regulating mechanism of the Bitcoin Protocol. Most of the altcoins (although not all) are considered ‘shitcoins’ precisely because their blockchain is controlled in some way or another by central management. You cannot have a decentralized system that is, in fact, centralized, people claim. After all, the whole idea of the blockchain is to get rid of the third party, not to become another tool that allows that third party to rule.

Using the blockchain as a centralized system simply annuls its most important feature, which is distributed authority, achieved by the individual or ‘encapsulated’ sovereignty of each node. For that same reason, they also stress that the appropriation of blockchain technology into the banking and fintech industries is probably going to be much LESS efficient than current procedures, which allow for huge amounts of transactions to take place simultaneously around the globe. The blockchain simply cannot make it more efficient or even ‘safer’, they claim, and it is therefore deemed useless in a system that is based on trust in a mediator or third-party.

Blockchain, in short, must be understood within this worldview as an ideological apparatus, not an efficiency-enhancing rational economic tool. The blockchain, as one person once told me, is in fact a trade-off. Transactions are slower but power is decentralized.

On the other hand, policymakers who discard Bitcoin often nonetheless claim that ‘Blockchain is the real revolution’. Regulators declare the technology a ‘breakthrough’ and a ‘game changer’, sometimes without actually understanding almost anything about it. The near-mythical qualities of the Blockchain as a magic formula for the democratization of peer-to-peer transactions is increasingly accepted uncritically by so many people in the Fintech industry because it is perceived as the good established idea that comes from the top of the hierarchy rather than from the margins.

It allows for the use of distributed ledgers while simultaneously disarming these ledger-based networks from their anti-establishment, anarchist, libertarian content.

In order to suppress the disruptive potentiality imbued in a global network of full-nodes that enable the use of an unregulated global currency with a universal value, a systemic logic of the Spectacle must strengthen the reasoning underpinning a mainstream language and imaginaries relying on structured hierarchies. This language takes the blockchain away from its intended function in the original Satoshi whitepaper — to create a trustless system of cash transactions — into what is seen in the eyes of ordinary citizens in the Global North as a very sophisticated, ‘smart’ use of technological innovation, in the benefit of society.

This also sits perfectly on the liberal nerve when people are being told that the blockchain will save the ‘unbanked’ and the disenfranchised by ‘connecting’ them to the global financial system. It is a language of prosperity, inclusion and progress, which simply ‘makes sense’ to the global middle classes.

These generic definitions eventually construct a similar paradoxical pattern to that advanced above concerning the society of the Spectacle, that is, a logic rooted in the simultaneous continuationand fracturing of the process of commodification of people and things. This takes place in and around the uses of the term ‘blockchain’ but also include the notion of ‘disruption’, which has in the past decade or two become a double-edged sword because it is used both by those opposed to the ‘system’ and those sustaining it. ‘Disrupting’ and ‘scaling’ in hi-tech circles have become mainstream foci, which actually do not imply radical breakup at all but rather the contrary, a way of perfecting established ways of doing things, in fintech and elsewhere.

Likewise, all that ‘crypto-nation’ talk in Switzerland is, in fact, the antithesis of what radical libertarians think the blockchain is supposed to do in the world: for them cryptocurrency is a tool for decentralization, individuation and movement, whereas the crypto-nation suggests centralization and profiteering from innovative regulation.

This tension around the use of terms and their implications in mainstream versus subversive circles is very interesting analytically. Rather than a binary distinction between a Spectacle and its unilateral rejection, people can and often do transgress the boundary, depending on their particular uses of cryptocurrency. Even the most devoted Bitcoin early-adapters I have spoken to rarely purport a supersessionist view in favor of the substitution of one financial system with another. Rather, most of the people I know in the crypto-space often actively seek a middle way by which they can be inside and outside the dominant political and economic system at the same time, to different degrees. Depending on the person, and within a multitude of contradicting interests, they seek the possibility of movement into and away from different social institutions, both ‘centralized’ and ‘distributed’. It is this potentiality of movement that stands at the heart of cryptogenesis, and, I suggest, maybe the most important aspect in its potential mass adoption. Rather than economic rationalism, it is about cultural adaptability through the incorporation of the possibility of a constant flux between more ‘decentralized’ social spaces and ‘centralized’ ones.

Final Thoughts

I associate the emergence of the cosmological complex I called cryptogenesis with the increasing entrenchment of the power of Spectacle in late modernity. Evidently, the cryptocurrency social space can be seen on the one hand as a fractal of a hyper-capitalist system — a continuation of its logic and core values — while simultaneously the negation of its structural dynamic on the other hand. The notion of trustlessness — the idea that people cannot and should not be trusted as opposed to the proposed flawlessness of sound mathematical procedures ran by emotionless machines — here allows for an emergence of a new social structure from within the ‘old’ one. People all across the cryptocurrency eco-system, in fact, use these exact terms to communicate such a temporal reference for a revolution or ‘evolution’ (as Joseph Lubin from ConsenSys likes to call it) of human consciousness and governmentality.

My argument concerning cryptogenesis, then, is very simple: the impact of encryption technologies on civil society is linked with core capitalist notions of individual sovereignty and rampant competition, in both their ‘centralized’ and ‘decentralized’ variants, each stressing the underlying capacities of these tools ‘to make the world a better place’, in different forms. Both these forms of thinking about society and relationships in fact emerge from a single cultural cosmology of commodification, which has a distinct temporality, foundation myths and maps of the social as well as the natural universe.

The cryptocurrency scene is increasingly becoming one of the main arenas for the instantiation of this very clash over sovereignty, individualism and freedom in and around the production and distribution of wealth. Centralized encryption (and surveillance) here meets decentralized encryption (and anonymity) head to head precisely because both are in fact founded on a single technological and cultural apparatus, which is the mathematics of encryption.

Note: This text is published as part of Matan Shapiro’s research ‘Cryptogenesis: Value-Making, ‘Trustlessness’ and Egalitarianism in The Bitcoin Embassy in Tel Aviv’. The research makes part of the of the ERC-funded project Egalitarianism: Forms, Processes, Comparisons Project, which is coordinated by prof. Bruce Kapferer in the Department of Social Anthropology, University of Bergen, Norway. This article was initially published on Medium.


Matan Shapiro

Matan Shapiro is a postdoctoral fellow at The University of Bergen. Matan's research revolves around value-making, 'trustlessness' and egalitarianism in cryptocurrency sociality. The research is part of the of the ERC-funded project Egalitarianism: Forms, Processes, Comparisons Project, which is coordinated by Prof. Bruce Kapferer in the Department of Social Anthropology, University of Bergen, Norway. You can see the full research description here.