Would Karl Marx Support the Existence of Bitcoin

Abstract

Bitcoin, the digital currency making headlines around the globe, is revolutionizing the ways at which people understand industry and commerce.The cryptocurrency was created in 2009 and it is currently valued on the U.S. stock market at over $7,000.Although the price has fallen from its high of almost $20,000 back in late 2017, it still begs the question, what makes this cryptocurrency so popular (Yahoo!Finance.2019)?Going back to the origins of Bitcoin, it was created to undermine the contemporary paper form of money by breaking down national barriers and establishing a universal money that can be spent anywhere.The developer of Bitcoin goes by the alias Satoshi Nakamoto and when he first introduced this idea on a forum, he branded the new currency as "decentralized," removing the necessity of trust from the transactions (Nakamoto 2009).Unlike paper currencies which rely on a centralized agency to regulate transactions, Bitcoin is unique as it is created on a peer-to-peer network.This network is known as blockchain and it functions without a centralized authority.More specifically, every computer that's a part of the Bitcoin community tracks and records every transaction made which allows a transparent and smooth exchange of goods.Because people do not need to place their faith in a bank or a centralized agency to overlook their transaction, Bitcoin can be considered a trustless currency.Although Bitcoin was only recently created, if one examines the currency in tandem with historical, political, and economic theories such as socialism, there is a surprising relationship between the two.In fact, Karl Marx, the creator of socialism, would likely support the existence of Bitcoin because of its decentralized and democratic nature.To understand the relationship between Marx and Bitcoin, it is important to understand the essence of Marx's 19th century arguments.In many of his works, Karl Marx often describes the limitations and problems that derive from capitalism.Specifically, in The Communist Manifesto, Marx emphasizes that although capitalism may lead to many new inventions and innovations (i.e.railways and navigation technology) the whole essence of the capitalist system is rooted in constant growth where the working class is left behind (Marx & Engels 1848, 10).The working class, also referred to as the proletariat, is Marx's targeted audience for socialism and he directs his argument as their advocate.While the upper-class bourgeoisie accumulate capital for themselves and make a living, the proletariat are exploited.His issue, Marx explains, is extrapolated in the ever-expanding market, as the need of a continuously growing market "chases the bourgeoisie over the whole surface of the globe" (Marx & Engels 1848, 12).The resulting consequence of this type of economic system is centralization.While property and power seem to be concentrated in the hands of the bourgeoisie, governmental systems are lumped together under one nation and one code of laws (Marx & Engels 1848, 13).In other words, separate cultures and communities become intertwined under the same goal of profit.This presents Marx's main argument for socialism.Marx wants the proletariat to revolt and by doing so, disassemble all forms of social hierarchy.He writes that with socialism, the working class will create the state and the state will regulate all means of production (Marx & Engels 1848, 28).The difference between the capitalist society and the socialist society is that the socialist society will not be based on the want of profit and instead be based on the collective wants and needs of the working class.