Revision as of 15:27, 22 April 2013

Annotations of Contextualizing Texs

Annotation Control / Freedom by Jeniffer Chun

The end of the Cold War was the triumph of the free: the Free World, Free Market and Free circulation of information. These triumphs have all been linked to technology. However in doing so we attribute causality to technology and freedom to control technologies.

In this process Internet was conflated with cyberspace to be sold as a tool freedom. For by it's technological design it could not be censored. By allowing for seeming anonymous communications people would be freed from the limitations of their bodies. Especially those of race, class and sex. Next to that the internet promised to break media monopolies.

The rhetoric of the internet as freedom was also accompanied by rumors of the internet as a control structure. Citing capabilities by governments to listen in to communications and corporations of following our every move with cookies.

The question whether it's a tool of control or a tool of freedom is a misguided one that stems form a paranoid response to power. This paranoia emerges from reducing political problems into technological ones. A reduction that blinds us from realising both how these technologies work and fail to work. And thus that the freedom and control the internet enables are not complete.

As an example: the client-server model of the WWW is as much a cultural construction as a technological one.

The internet as a surveillance device is the obverse, not the opposite of the internet as an agency-enhancing technology. The one requires the other.

Other

Bitcoin & The Crash

Hello Nettimers,

“We have elected to put our money and faith in a mathematical framework that is free of politics and human error,” Tyler Winklevoss said.[1]

Bitcoin has been framed by proponents, like the one quoted above, as the ultimate decentralized and politically neutral currency. However, to me, the recent bubble and it's (partial) burst serve to underline the fallacy the techno-utopian mindset behind projects like this one. The believe that setting the right technical parameters will 'free us of human error' and that systems grounded in mathematics are free of politics.

I have made two observations about Bitcoin I would like to share with the list that I believe support my opinion.

Centralized exchange markets

By design the creation (mining), storage and transfer of Bitcoins happens in a decentralized fashion. The recent bubble however has shown that in order for people to liquidify their Bitcoin assets they are extremely dependent on just a handful of centralized exchange markets. One of the biggest of these online exchange markets, Mt. Gox, claims it controls 80% [1] of the market.

As the bitbubble burst it became painfully clear how dependent on Mt.Gox Bitcoiners exactly are. Also, it showed the extent of Mt. Gox's influence on the value of the currency. The crash that devaluated Bitcoins from $260 to around 100$ dollars was caused by the failure of Mt. Gox's online trade infrastructure. The exact cause of the crash is speculation but it is believed to have been caused either through an orchestrated ddos, technical failure or the sheer amount of server requests caused by a bank run of panicked investors.[2]

The catalyst role of Mt.Gox in the burst and it's subsequent suspension of trade for 'market cool down' illustrate the extent of influence that centralized structures have within this supposedly decentralized network.

Mining Guilds

I would also like to point out the emergence of so-called mining guilds or mining pools. In these pools individual Bitcoin miners join a centralized organization to share equally in the proceeds of mining, guaranteeing a somewhat stable income for it's participants.

One could argue that these centralized guilds have also been 'designed' into the Bitcoin system. Bitcoin miners are rewarded according to a first to come first to serve model. The miner that discovers the next viable batch of Bitcoins gets to have them all. In the early days of bitcoin this could be easily done by individuals. However the mining of Bitcoins becomes more difficult due to the finite amount of Bitcoin. Mining requires increasing amounts computing power, superseding the capabilities of decentralized individuals. For mining to remain profitable in these circumstances miners cluster into pools to share both in computing power and mining proceeds.

As a result, the roughly 30 mining guilds have become the biggest producers of Bitcoins [4][5] In the face of even more difficult mining in the future it is not unlikely that we will end up with a handful of guilds in control of all the production. However, the 30 guilds involved in the production of Bitcoin have already acquired the ability of injecting large amounts of new currency into the market and thus influence it's course. This makes mining guilds de-facto capable of operating as the central banks that Bitcoin believers so strongly oppose to.

To come back to the Tyler Winklevoss quote at the beginning of this text. We can see how the design of Bitcoin as a mathematical framework does not make it free of politics. For in it's design it also contains certain (unconscious) political ideas about society that are grounded in anarcho-capitalism. The mathematical framework has thus for not shown to be capable of preventing the extremely quick formation of potentially disruptive monopolies in a system that was designed to be neutral and decentralized.

The idea that setting the right technical parameters will remove the necessity for supervision and accountability is thus incorrect. For we are witnessing the appearance of cartels and monopolies that could have never been formed in a properly regulated market. Bitcoin as such will not work to empower the individual and free him from centralized power, instead Bitcoin serves to create new centralized power structures that are unregulated, opaque and unaccountable. Although Bitcoin as a system does not free us from human error and on the contrary even facilitates it, donations are welcome on 1u2VMeVbDpWKUQx8cLSMtLUCTSAUfoz7q

;)

Roel

[1] http://dealbook.nytimes.com/2013/04/11/as-big-investors-emerge-Bitcoin- gets-ready-for-its-close-up/

[2] https://mtgox.com/press_release_20130404.html

[3] https://twitter.com/MtGox/status/322355614414147588

[4] https://en.bitcoin.it/wiki/Comparison_of_mining_pools

[5] http://blockorigin.pfoe.be/chart.php

@@ Line 2: / Line 2: @@
+== Annotations of Contextualizing Texs ==
+'''Annotation Control / Freedom by Jeniffer Chun'''
+The end of the Cold War was the triumph of the free: the Free World, Free Market and Free circulation of information. These triumphs have all been linked to technology. However in doing so we attribute  causality to technology and freedom to control technologies.
+In this process Internet was conflated with cyberspace to be sold as a tool freedom. For by it's technological design it could not be censored. By allowing for seeming anonymous communications people would be freed from the limitations of their bodies. Especially those of race, class and sex. Next to that the internet promised to break media monopolies.
+The rhetoric of the internet as freedom was also accompanied by rumors of the internet as a control structure. Citing capabilities by governments to listen in to communications and corporations of following our every move with cookies.
+The question whether it's a tool of control or a tool of freedom is a misguided one that stems form a paranoid response to power. This paranoia emerges from reducing political problems into technological ones. A reduction that blinds us from realising both how these technologies work and fail to work. And thus that the freedom and control the internet enables are not complete.
+As an example: the client-server model of the WWW is as much a cultural construction as a technological one.
+The internet as a surveillance device is the obverse, not the opposite of the internet as an agency-enhancing technology. The one requires the other.