Bit #9: Radical System Change: Bitcoin & Degrowth — Issue #2
Originally published on Medium on May 11, 2022.
This issue’s topic: The time I realized that bitcoin and degrowth could be the same…
Just thoughts on the connection between bitcoin and elements of the “degrowth” movement that argues that never-ending economic growth is leading us toward an unsustainable and ecologically destructive path.
So, I got some fun alternatives to “degrowth”. One of my favorites are, “popular prosperity” and “permeconomy” (portmanteau of permaculture and economy). Then there was this one.
https://twitter.com/thetrocro/status/1522079733290205185
Fair point. For the bitcoin skeptics, though, this might be a hard sell. Plus, to be fair, the roots of “degrowth” go back to the early 1970s. The word itself is a translation of the french word, décroissance. For more on the history of degrowth, you can check out degrowth.info’s article. Please note, that readers have differing definitions of capitalism. So, I suggest replacing it with “existing system”, to make it easier to digest. While bitcoin did not exist prior to 2008, there is no question that it is also a response to problems that began to arise in the 1970s.
The first time I made the connection between bitcoin and “degrowth” was when I read a review paper in the journal, Ecological Economics, called, “The economics of degrowth”. In this paper, there’s a section on “non-debt money and regional currencies”. In particular, the late economist, Richard Douthwaite’s work was referenced.
Douthwaite proposes also creating non-debt money. Various communities have had non-debt forms of money in the past. An independent currency authority should be responsible for the issuing of new money since governments can succumb to political pressures and issue more money.
In addition, he was opposed to monetary promises, except in certain cases.
Regional currencies should not be backed by promises, as this would imply a debt. Some issuers may promise to deliver real things, such as energy or electricity that people can buy through bonds with their regional currency. Such regional energy bonds could promise to pay the bearer the price of a specific number of kWh on the day they mature, money coming for the payments made by people to buy energy from the plant that the bond will finance. These bonds will not circulate as money. But once the energy plant starts supplying power its managing committee could as well turn it into a sort of bank, issuing energy “notes” that the locals could use for buying and selling goods, secured in the knowledge that the note has real value as it could always be used to pay energy bills.
I found this section particularly interesting because of bitcoin’s use of proof-of-work to secure the blockchain. It’s interesting that now we are talking about bitcoin mining being a way to accelerate the build-out of new renewable energy generators. Alternatively, there’s been discussion in the bitcoin space around selling green hashrate bonds, to finance the development of renewable energy in energy poverty regions of the world. I think there’s a lot of overlap here.
The role of money in degrowth is really important to understand, so I will continue this thread in the next newsletter.
Until then…
