With Salman Sadeghi: About Cryptocurrencies, Education, and Change
Andrew:
Hi Salman, so first I think we should begin with an overall, yet short, summary of what you find interesting and necessary to understand about crypto currencies that an uniformed public should know.
Salman:
Hi Andrew, thanks for your question. The first thing I think those who have not yet joined the crypto world must consider is that cryptocurrencies are not all about financial crimes or dark activities, as we know that all these, say illegal activities, had existed before the emergence of cryptocurrencies. Of course, some criminals may use cryptocurrencies, the same as they use fiat, but it doesn't mean that there is something wrong with the technology. Cryptos are more about transparency and decentralization of power and governance. There is nothing to worry about! At least at the first look!
Andrew:
Okay, I guess two things come to mind: 1) What more specifically should be known so that people's fears or worries are pacified about crypto? And, 2) What would the first steps be for a person to get involved with crypto?
To further elaborate on my questions: What are some basic points to know about crypto education and then what are some practical steps that people can take to start their entry into the world of crypto finance?
Salman:
I think the most exciting part of cryptos is that they abolish the roles of banks and in general intermediaries. The core technology most cryptocurrencies deploy, blockchain technology, has removed the need for central verifications and planning. This is what is ever unique with cryptocurrencies. I think people should know that banks are to blame for all economic cycles. Their monetary policies are all the root causes of inflation and economic recessions. So what would be more cheerful than to see the disappearance of central banks and financial intermediaries? I think this could calm down those who are still afraid of joining the crypto world. One may say this is the wild west of finance! At first, it may seem somehow anarchic, but it has its own rhythms and harmony. You have security and transparency at the highest level. In our current financial models, banks own all user's data, and this is what we should really worry about. This is the same for data companies, like social media, they own the user's data and we know how powerful they are when they have such a big collection of individuals’ data. So blockchain can bring a shift! I think of cryptocurrencies as the financialization of data! If data is worth it, those who own it are the new capitalists! In the current centralized systems, companies own users’ data! With the blockchain and cryptos, you have the power to control your data and this is great! Please consider that we are talking about technology: an intrinsically double-sided phenomenon!
And about your second question, I think first of all we should keep in mind that in the world of cryptocurrencies, security means everything. You are the one who is responsible for your funds and information. So you should keep your private keys safe; you should have heard about those unlucky guys who lost their bitcoin keys and, as a result, their access to their funds. This is the same for almost all cryptos. If you make a mistake, you will lose your funds. But it is worth the effort. So the first step, I think, is to increase our fundamental knowledge of bitcoin and the way it operates. Understanding blockchain technology and how it works is unnecessary for all who want to be just simple users of the technology. Of course, it is better to know more, but it is a good idea to read the original Bitcoin whitepaper, which Satoshi Nakamoto left for us. It could be the best way to enter cryptocurrencies. Those who are keen to know more about the technology may consider reading this link. Remember, for end-users, it may seem complicated and unnecessary.
Andrew:
I think one of the fundamental issues whenever we use the word anarchic is that we forget about its actual meaning, which is just a description of a politic where there is very little hierarchy that is not voluntarily accepted — and is closely related to the liberalism of the Paris communes. This is paradoxical in that liberal economics (and mainly neo-liberal economics currently) use rhetoric to explain themselves as ‘free’ and ‘open’ but we see that are not so much.
I am wondering if you can see a parallel between revolutionary ideas and modes of politics and economics in history and their downfalls from over-authoritarian powers and a possible propaganda scheme against crypto? All this to ask: if and when the ‘powers that be’ in neo-liberal economics go against crypto, what do you think their tactics and propaganda might look like?
Salman:
The second question is really great. I think the economy is not a constant phenomenon. It changes as the structure of capitalism changes, like a living organ of a body. You see how crises throughout history changed the very way we think of institutions and dominant ideologies and of technologies and social relations. Cryptos came with the 2008 financial crisis! You remember the collapse of what we conceived as economic value for real estate and then other parts of the economy followed, so it would not be surprising to see dramatic changes in social institutions. It doesn't necessarily mean that we are witnessing a revolution! The key point here is that what you refer to as ‘powers that be’ in neo-liberal economics have already accepted cryptos. They are not going to go against cryptos, all are developing their own cryptocurrencies and regulating others. It has always been the same! Capitalism recaptures new spaces. No matter how revolutionary the change, power hijacks it necessarily. So, here I want to highlight that the war we see between cryptocurrencies and the central banks, or "powers that be", is an internal war in capitalism, a war between two brothers! So you see a kind of resistance in the laziest sectors of neoliberal economics, but it is not a complete denial. I think capitalism needs cryptocurrencies to reproduce itself once again!
And about the first part of your question, I do agree that the neoliberal economy pretends to be free. At the roots of its economical underpinning are the free market and its liberating invisible hand. Now they can celebrate with cryptocurrencies. because it seemingly frees the process of money fabrication from the state and moves it to the hands of the free market. It was the dream of one of the most radical thinkers of the right-wing libertarians, F.A.Hayek, which he proposed in the book, The Denationalization of Money. Now libertarians believe that cryptos can visualize the Hayekian dream of currency competition. to organize the organizer of the market (money) by the market itself! It seems somehow circular. According to the market economists, cryptos can at least solve the problem of inflation, which if so, I think is a great contribution.
Now, I want to get back to your second part of the question, I think the most effective tactic that the power uses against not only cryptos but also all emerging phenomena, is that it robs the necessity and recaptures all emerging spaces. here you see how they try to understand the potentialities of cryptos in relation to their economic assumptions! They are afraid of new phenomena and so of the future. They are a continuous hence never-ending present! Anyway, I think technology is a double-edged sword, everywhere there is power! There is resistance! To cut the long short, I think of cryptos as a potential rupture here in this narrative!
This is why we are here! Ha? Do you feel that the Power relations would resist joining Cryptos?
Andrew:
So, if I am understanding correctly there already needs to be new methods. If you are getting into crypto now, basically you are not doing anything special anymore? I have seen news indicating this. I guess this is related to the ideas that are circulating now that the ‘whales’ can manipulate the markets anyway they want. But actually, can you confirm or deny this? What is your understanding and opinion about whales in the crypto world?
Next, I need to ask, if a person wants to enter crypto but is skeptical because of this internal fight between the brothers of capitalism — what should they do to stay ahead of the curve and be part of something transformative and positive? But NFTs? But IOTAs, MIOTAs? As well, can you please tell us what you think about NFTs and IOTA/MIOTA?
Salman:
I think you mean why don't we stay away and see these brothers kill each other? Yes, You are right! Whales can easily play with the market. They are potential, even actual, threats to true decentralization of power in all crypto communities. We have a new capitalist class here in cryptocurrencies. Those who simply buy some cryptocurrencies thousands of times more expensive than their starting price are doing a great job, of course for the crypto capitalist class!
And I should mention that when I am saying we should join the crypto war with capitalism I do not simply mean to buy some sort of cryptos and enter the Market! I am talking about joining the new modes of production, interaction, and thereby, existence that cryptocurrencies have enabled for us, the decentralized mode of existence! The market noises make it difficult to hear the fundamental paradigm shift that can be taking place and change the very fabric of human civilization with cryptocurrency and the blockchain. May we need more silence! I think we can join the war and make this brotherhood battle a full blown war with capitalism!
Let me get more in-depth.
In the capitalist mode of production, you need capital to organize the relations of production. Everything seems natural and rational. Economically, you need capital because production is a time-consuming process. Here you consider capital as an intrinsic ingredient of production. And what is capital? The accumulated money. So, You need money to do great jobs! What if Cryptos can change this narrative? what if you can distribute time across millions of nodes and provide the condition in which the production is no longer a time-consuming process in our general sense. If so, you have changed the context in which capital seems organic.
Currently, you have Ethereum, and many others, which are distributed computing machines. They can distribute the time and work which is needed to do jobs across millions of computers, in a way that is secure, reliable, and transparent. You have DAOs which are decentralized autonomous organizations and use the potentialities of smart contracts and the blockchain to organize their new relations of production. With DAOs, you can enjoy transparency, security, and decentralization of governance and responsibility and build local communities which are not operating based on the logic of profit, money now for money more later, and resist the very way that capitalism exploits human productive activity, and also save your revolutionary forces for generations. As I was saying, cryptocurrencies require us to reconsider ideas about human relations, money, and economic value. As Catherine Malabou once said, it could be the most challenging problem of philosophy in our time.
And NFTs are among the most interesting parts of the crypto revolution. Simply, NFTs are non fungible tokens! You know that there is no difference between a one hundred dollars bill in the hands of you or me! Because fiats are fungible! But NFTs are a unique representation of intellectual ownership or digital identity. Artists would be more interested in NFTs. Of course, there is a lot of hype around NFTs these days. but as time goes on, I think NFTs will find more real use applications especially in the context of digital identity and metaverse.
Andrew:
Ok, so two things: One, you say “I do not simply mean to buy some sort of cryptos and enter the Market! I am talking about joining the new modes of production, interaction, and thereby, existence that cryptocurrencies have enabled for us, the decentralized mode of existence!” — Can you clarify what you mean by this more in detail for us? Perhaps give us an example of what you think our interaction with the fiat market looks like versus what a new interaction through crypto would look like where we join new modes of production and interaction. Maybe give your answer in the first person or second person so we can clearly see what this reality will look like.
Salman:
Fiat, is the current form of money and by fiat I mean any sort of money as for me the capitalist society is a society in which all human productive relations are mediated by money, once it was commodity money and now it is digital money, it is not important what is the appearance of money. And, I conceptualize my ideal cryptocurrency as a "less-than money", a tool to enable dramatic changes in the way that the capitalist mode of production operates. A tool for changing the context in which money seems organic and rational. It is somehow my philosophical project, to go beyond the capitalist emergence of cryptocurrency and make it problematic. It is important how to call things! Anyway, let me focus on the current economic system.
Which is, and I think we should agree that we still live in the capitalist mode of production and to which I think Marx's theory of alienation does work here. You know how living in a capitalist society provides the condition in which individuals find themselves alienated from their humanity. In the Economic and Philosophic Manuscripts of 1844, Marx expressed the theoretical basis of alienation within the capitalist mode of production, which I think still works. In the current economic system, workers, as economic entities, are nothing more than working power and the owners of the means of production dictate their own desires and goals, which is to gain more money, to them. In the capitalist mode of production, the design and process of production are not determined by the workers nor by the consumers, but by the owners of the means of production, or the capitalist. The capitalist mode of production converts labor to commodities, for market supply, and this is only through this process that the use-value (product) transforms to exchange value. here you have a contradiction! a contradiction between the use-value and the exchange value of the commodities, which I believe constantly produces economic crises.
The separation between the means of production and the workers as the forces of production also provides the condition of exploitation as we know that the capitalist mode of production reifies the individuals' working power into a job for which the worker is paid wages. By means of commodification, the labor-power of the worker is reduced to wages and the psychological estrangement between workers and their act of production happens. According to Marx, it also results in the alienation of the worker from their essence and from other workers. In the market based society everything is tradeable goods even human labor and lives. At the very heart of the philosophical underpinning of market economies, the fact lies that humans are Exchanger subjects and all human relations are based on exchange. In this sense, society is a collection of strangers who enter into exchange relations. If we suppose that all human relationships are based on exchange, I think then money seems natural because money is the most economic way to manage exchange relations. But I think the exchange is not the only way through which humans make relations with other parts of society and the whole world. We know that in the pre-capitalist era human societies had different economic systems. According to Graeber, the American anthropologist, humans have evolved from early communist societies (human economies) in a historical process to Gift economies, and ultimately to the market economies. So for me, cryptos can visualize once again a human economy in the Graeberain sense.
I said that cryptos can bring a paradigm shift in the way we manage productive activities. So the question would be how are human economies and how can cryptos help us build true human economies? In simple terms, the human economy is an economy that is not based on exchange. I want to quote Graeber again here. He believed that there are three moral grounds for productive relations which are: communism, hierarchy, and exchange. Referring to Mauss, he stresses that each economic system, like the market economies or gift economies, elevates one principle above others, for example, capitalism elevates exchange, and shapes human's basic conception of the world based on that. Humans, on the other hand, use a combination of all three of these principles in their everyday affairs. The important point is which principle becomes the dominant institution and forms the human perception of self and existence.
In the decentralized mode of production, which I imagine could be visualized with the potentialities of blockchain and cryptocurrencies and smart contracts, you can provide the condition in which there is no separation between workers and their production as you can manage collective but decentralized relations which are designed to serve the commons of the community. By extending the logic of communism to the relations within and between cryptocurrency-based communities, I think it would be possible to imagine the creation of new subjects, new consciousness, a decentralized one, which can provide us with an entirely new world. Unlike mainstream economists, I do not believe that capitalism is an abstract concept, for me it is a specific economic machine. It is more like a living body. It may be surprising to know that we, human beings, share over 99 percent of our DNAs with plants — the difference is in the manner of combination. So, I think if we deconstruct capitalism from within and reshape it we can reach new bodies and appearances. It may be a repetition of our past history of localism but this time with an artistic differentiation. because we are wiser and more equipped with technologies, here I mean blockchain technology. Cryptocurrency is about the decentralization of power and governance. remember, It removes the need for centralized verification and planning. I think it can provide the condition in which new ways of governance and responsibility can emerge and obsolete the previous forms of exploitation.
Andrew:
Ok, thank you for that informative and well thought out answer. First, you say at one point that Graeber mentions the “three moral grounds for productive relations which are: communism, hierarchy, and exchange.” Can you explain more of what Graeber meant by each of those with some examples?
And, second if and/or how these Graeberian morals work in crypto — if they do, and how so, and if not, why not?
Salman:
I think violence and debt best help us to know the thin conceptual difference which, according to Graeber, exists here in the way we make relations. According to Graeber, both exchange and hierarchy involve a symbolic sort of violence in their essence. They both require debt to make their relations possible, a debt which is economic and produces debtor subjects whose all aspects of lives are shaped in relation to debt repayment! Compared to exchange, The hierarchy here is more honest I think, and less violent also! Because it does not lie! In a society based on hierarchy, You, depending on your position in society, are suffering from a level of indebtedness that has been inscribed to you; by the upper classes! and here the god, lord, or the aristocrat is the visualization of the creditor!
But exchange begins with the premise that you are equal to all and you can exchange whatever you have with whatever you need! And we do know that the capital symbolically controls what we need and what we produce! In the logic behind the exchange, the fact lies that you are not indebted to anyone! So how could it be possible to make relations? symbolically, when the exchange begins debt springs up, and when it ends, debt fades away! somehow we can say that the exchange becomes what it primarily denies. Otherwise, it would not be possible to make relations.
So debt still exists to make the relations, with an exchange, you need an eternal presence of the debtor class! It may seem silly but I think this is why the United states' national debt is not repayable! because when it becomes repaid, all the relations would be ended!
And we have communism which according to Graeber is the foundation of all human relations! Communism is any kind of human relationship that operates on the principle of ‘from each according to their abilities, to each according to their needs'. communism is not just about property relations or the simple fact that lets own the means of production collectively. It is also the basis of pleasure! Every human enjoyable experience involves a level of sharablity and communism! Communism is the principle immanent in our everyday life! according to Graeber, Whenever action proceeds ‘from each according to their abilities, to each according to their needs’ –even if it is between two people – we are in the presence of ‘everyday communism’. for example in the family and when you are kid, when you ask your mother for foods, she will not say ‘And what do I get for it?’ So with communism, the community would not be considered as a collection of strangers who find themselves isolated individuals who have no way to make relations but to enter the exchange!
Here the whole community would care about its members and of course at the end, every one can control the means of production and what to produce in favor of the commons! Here the economic debt can take a new form which is ethical! Cryptos and the blockchain I think can help us to design new communities in which the dominant institution, which shapes all members' perception of self and world, is communism! I don't mean that exchange and hierarchy would completely disappear, but the point is what would be the dominant institutions! with the potentialities of cryptos we can build communities with different economic model, based on a total system of giving with a complex space of relations in which tokens and coins only determine the extent to which individuals participate in human production, a human space full of the generosity of value exchanges and not liquidity of money. This can lead to transition from the idea of money where it corrupts value, which is a qualitative concept, and stores it in the language of numbers and provides the state of exploitation of labor and time. Because of the transparency and confidence that blockchain builds via infinite and not perceived in the present, humans can accumulate their surplus and build communities that do not work based on money predicated on the logic of profit. like GCAS! and the way we do academic relations! it is a praxis of true crypto economics I think!
Andrew:
Ok, thank you for that detailed answer.
You mention that people will take care of each other, but, how do we know this will happen with crypto given that it has not happened with fiat, or older forms of exchange? What makes crypto, if anything, different from any other economic, currency, financial system where exploitation is completely free when left to human interactions? Can you give some examples of how crypto can mitigate exploitation?
Salman:
So as I mentioned, with cryptos, you have transparency and security at the same time. There is no guarantee that cryptos can bring us a better world. The problem is that the world is changing, Whether we like it or not. We should believe that we, humans, are a determining force in the way it changes. This time we are wiser and more equipped with technology. Why do we not think of the deconstruction of capitalism (in its internal war with cryptos) and do not wish to redesign our productive relations? I think it is possible, even on a small scale, to use the potentialities of cryptos and extend the logic of communism within the working groups. We do know how the capitalist economic machine works, and we do know that even a small change in the combination of its organs can result in new bodies and appearances for society. So, I believe while it is more likely that with cryptos, capitalism can mediate its current crises and reach its new state, there is also a peculiar opportunity for us, the oppressed, to build our new ways of resistance. this time, with a capability to survive for generations.
Take for example the GCAS project. you know how academia works in capitalism. students should go into debt to study. Universities need money to survive, capitalism gives the money, and as a result, determines the way knowledge and science would be. This is not like the good dream that in universities, clever students try hard to find answers to their authentic questions, which are the questions of society. On the contrary, they are working on the questions of capitalism, which are dominated by the logic of profit and are to enrich the capitalists and exploit society.
But GCAS has made it possible for students to get out of the debt, by using the surplus existence of its members. In this condition, it would be possible for a student to concentrate on her question, which is authentic and pure and not the questions of capitalism. With the use of cryptos and blockchain, we, the GCASians, can practice the logic of communism and build scientific investigations which are, as I think, new and authentic.
You know that I recently graduated from the Master's program at GCAS. Andrew, let me say that you helped me to edit my thesis. you did it not because of money, you did it because you had the ability to edit English texts. So what do you get in return? Tokens! So what can you do with these tokens? You can pay for your Ph.D. at the GCAS. That was not an "exchange"! That was communism! What were those tokens? (i.e. the GCASy)? A tool to remember and prove your participation in my thesis! This is perfect! Is it not?
Andrew:
Well it is nice to mention how our ecosystem works. I, like you I suppose, feel lucky and excited to be able to do this. I think you are the first student in GCAS history to pay for tuition with blockchain and crypto technologies? Right?
Now, aside from sounding like a GCAS commercial, let us move back to some real skepticisms for those out there who might still not be as invested nor convinced as us. I think we must do this, because we do not want to convince those who already participate in the GCAS ecosystem, we need to demonstrate with proof that these types of economics are beneficial to the smallest and most radical degrees.
Here is my example, would we rather have gold bars or paper fiat currency? I would want the gold. How do we make crypto have that level of certainty that gold has?
Next, what do we do when the market becomes saturated with workers — how do we maintain the same standard and increase over time of our electric currencies?
Finally, what practical moves need to be made, not thoughts, ideal notions, but real tactical moves we do to make technologies like GCAS accessible to the subaltern, those unseen, those outside the periphery, so that they can use this technology as an emancipatory tool?
Salman:
Yes! This is exciting!
And of course, they are beneficial! I mean projects like GCAS. It would be interesting for those with socialistic or communistic points of view, or for those who are really tired of the debt economy. Those who see and understand how neoliberal economics work, would be surprised to see new ways of doing economy will emerge with the potentialities of blockchain technology.
You see that the right-wing libertarians are excited about cryptos as well. I think it is the first time that we can see both radical left and right are interested in one phenomenon.
I think you mentioned something about gold! So the question is what is the source of value for gold? One may say gold has usability in some industries but there are other metals that have more applications in industries, like copper. Or one may say that gold is beautiful! But there are other materials which are beautiful too. It is widely believed that gold has scarcity, but who knows? Bitcoin has scarcity too. I think the main source for the value of gold comes from general acceptance. so if a group of people accepts that something has value, then it has value. And it has been the same for the whole history. Time plays an important role in the degree of certainty for gold. We do think that if something is valued for ages, it should maintain its value in the future. The same is for the other cryptocurrency. but we also know that time is under a paradigm shift also. For a citizen of New York today, the pre-pandemic version of the city is nostalgic. But a decade ago, the 80s version of the city was nostalgic.
For something to be accepted as currency, there should exist collective intentionality. So those who are still skeptical about the event should take some practical steps. they should search for their desirable community. If there is no one, they should build their own communities. Most of the time it is easy to build a new community and a cryptocurrency. The problem is to keep it alive and develop the ecosystem.
And, I have no idea when the market would be saturated with workers, but I do know that there is still a lot to do. We need new communities and new members. It should not be possible to sit in comfort and not risk and see that the world is changing. We should participate and do the practice. It intrinsically has some risk with itself! But rewards always come with risks!
And about the last part of your question, I can say that I am a subaltern. I am living in an isolated country. We are removed from the global financial system. In the capitalist world, having no financial connection means having no real connection. But I am using GCAS! I almost paid nothing for my education! No debt! I participated and spent time developing the community and that was enough for me to study and graduate from the programm. Otherwise, I should spend a lot of money and time being educated!
Everyone with the standard academic quality I think is welcome to the community. No need to have money! It is the same for all small crypto communities. I said that it should be something like a gift economy! Have you heard about airdrops? Most communities distribute their tokens for free in the first step! And about the oppressed, we should reach our voices to them. We are doing so. With this interview. I know that we should do something more. More is always better!
Photo Credit to Joshua J. Cotten