When Bitcoin first emerged in 2009, technologists hailed it as a new messiah of the digital utopia. It was the key to a global, post-capitalist heaven. In the wake of the 2008 banking crisis, societies were looking for an answer to the boom-and-bust cycle that was causing unprecedented polarization. The ninety-nine percent’s rallying cry of occupy everything politicized a new generation of optimists, and the culprits who had caused the crashed looked like they’d gotten away scot-free.
Nine years on and not a lot has changed. Thanks to the current presidency, we’re still petitioning. There are still tax breaks for big businesses. But Cryptocurrencies have. Circumstances have revealed the nature of the beast, and it’s very different to its infancy nearly a decade ago. Bitcoin didn’t make millionaires of us all. It didn’t bring down Wall Street. But it is allowing greater autonomy when it comes to finance – and that’s not a good thing.
Global and personal finance are very different. It’s the same argument that was drowned out in the last financial crash. The maths of balancing your checkbook aren’t the same as the complex formulas that underpin subprime hedge funds and quantum easing. Banks are regulated for a reason. In fact, the single common denominator in the global crash was a lack of parameters.
Companies and brands are quick to jump on the bandwagon. Yesterday, Samsung announced they were investing in a chip to be used for crypto mining. Ironically, the South Korean based company (a brand so integral to the country that there is national holiday for them) are building a component that can’t be used in the country, because of fears how it’ll be used (tax avoidance and online gambling being the two main features).
But there are darker forces at play. South Korea’s proximity to The People’s Republic of North Korea makes it a natural target for money laundering, as the Hermit State tries desperately to circumnavigate the sanctions that have left it with a weaker political muscle to flex.
In the cold light of day, the very same proclamations that championed cryptocurrencies for their anonymity, free from the reign of doctrine or state are what make it a corruptible and dangerous side door into the murky world of criminal agents. The Venezuelan government have announced they’ll be launching petro – their own cryptocurrency, as the socialist state tries to combat the international constraints that it says are driving it into social and political turmoil. Sergei Glazev, one of Putin’s advisors told the Financial Times, that Russia was looking into developing its own cryptocurrency to evade sanctions.
It’s a trend that’s not gone unnoticed in the international community. While China has lashed out, Japan have made bitcoin legal tender, and Australia are working fast to figure out how to tax it. Then there are all the unforeseen environmental impacts. All this mining takes an enormous amount of computer power. It’s not going to wipe out all the world’s electricity by 2020 as much a technology tout has warned, but it’s a serious threat to our already dwindling environment. Bitcoin generates as much CO2 a year as 1m transatlantic flights. More and brands are getting on board the crypto-craze. Last year Bloomberg reported that shares in LongIsland Ice tea soared after they changed their name to Long Blockchain. As cryptocurrencies use turns towards the dark side, will the companies that moved with haste, spend longer undoing all the negative connotations they just didn’t consider in the first place? Chances are they will.