Part 1. Digital Gold Fever
When we first imagined the Lonely Old Bitcoin Miner (or LOBM, as we’ve come to know him), we imagined that he was a sad, sorry late adopter.
We began thinking of him about two years ago. It was the end of 2013, the height of digital gold fever. In November, Bitcoin’s price had peaked at, for a moment, over $1000. Bitcoin was going to be the new currency of Cyprus or Argentina or maybe the world. Bitcoin could be used to buy literally anything, from Alpaca socks to pizzas to murders. Bitcoin was the new Facebook, at least for the Winklevoss twins, who claimed to own 1% of all bitcoin in existence and were bullish that it might easily trade at $40,000. That year, we couldn’t attend any party or family gathering without being cornered by someone who wanted to know how they could get in on it.
To be honest, on some level, we found the whole bitcoin thing to be a bit silly and unsettling. Not least in part because it seemed motivated by what one of us, Lana, and her co-authors, Bill Maurer and Taylor Nelms call digital metallism.For traditional metallists, having a currency backed by a scarce commodity allows people to transact autonomously without any need for trust in each other or in centralized authority like a state. For digital metallists, Bitcoin is a commodity currency “backed” by cryptographic proof, unforgeable scarcity guaranteed by the distributed blockchain. For metallists, money is a ‘creature of the market.’ Those interested in getting rich quick through Bitcoin — such as the LOBM and nearly everyone we talked to at Thanksgiving and Christmas in 2013 — were engaging in speculation on the value of Bitcoin as a commodity.
For us, digital metallism implies an overly marketistic, individualistic, and ultimately anti-social vision of money and, with it, human nature. We tend to think, alongside anthropologists, historians, and plenty of economists, that money is more a creature of politics than markets. Its value is tied to the collective institutions that produce and manage it. We want to believe that people can come together to design better monies, better worlds. But we also want to believe that people need not do so as a collection of antagonists in a hostile marketplace. We’re not against or afraid of markets, we just prefer other fantasies, for example, those about, say, democracy, somewhat untethered from markets, that can manage our public institutions as public goods.
As off-putting as we found digital metallism, we were even more unsettled by our friends and family who, like the LOBM, had no political stakes in Bitcoin. The Bitcoin Bonanza seemed fuelled by a kind of blind faith — not in markets, but in a belief that some cabal of internet nerds know all the secrets so the rest of us don’t have to. We normal people didn’t need to understand Bitcoin, worry about whether it made sense, or be concerned about whether it would lead to a better world. Instead, we just needed to be sure that we didn’t miss out on it — whatever it was. In this way, if you think about it, aren’t we all a little bit Winklevoss-like sometimes? And isn’t that a craven and avaricious instinct we might work to overcome?
By late 2013, the idea of getting into Bitcoin hoping to get rich was laughable. Sure, many early adopters told tales of running an improvised mining rig in their dorm room or home office, but by the time Bitcoin hit its peak of attention and value, even those storied set-ups that were used to heat houses over the winter would have seemed quaint. By design, Bitcoin is meant to simulate a ‘scarce’ commodity, so over time, fewer and fewer can be mined. Because of this built-in scarcity curve, along with rapid acceleration of technology optimised for mining, that there was little hope for anyone — save for perhaps those willing to invest a large amount of expertise, time, and so-called “fiat money” — to ever hit real Bitcoin paydirt through mining.
We imagined the LOBM, then, as a sad, sorry dreamer, the digital version of the “crazy, lonely, and toothless” prospectors of yore. Most likely, he would never mine a single Bitcoin. He was greedy. He was a laggard. He was unimaginative. He was not a critical thinker. He was silly. His dreams were silly. And yet he was also kind of beautiful. There was an optimism there that we found touching.
We wanted the LOBM to exist. We both wanted to learn a little bit more about how mining and the blockchain actually worked so, inspired by an interest in what Matt Ratto calls “critical making,” we began to think about how we might build a Lonely Old Bitcoin Miner of our very own.
Before we built the miner, we knew, basically, how Bitcoin worked, but building the LOBM helped us to really know it. Together with the LOBM, we wrote code and clipped wires and panned for digital gold. We’re surprised how many so-called Bitcoin experts we’ve met over the years who’ve never done the same. In real life, using electronics to compute that which has been imagined on paper is not easy. There is a lot of invisible labor that goes into IT.
There is no Bitcoin manual. The original whitepaper by Satoshi Nakamoto that launched the Bitcoin project describes the principles behind Bitcoin-in-theory, but it can tell you nothing about the institutional and technological regimes that constitute Bitcoin-in-practice. In 2013, five years after Nakamoto’s paper was published, Bitcoin remained sparsely documented and unstable. To get started mining Bitcoin, we also needed to become members of various forums like bitcointalk.org, join Internet Relay Chat (IRC) channels, and compile the latest open source software. More like joining the circus than watching the show.
Part 2. The LOBM stakes his claim
Early Bitcoin enthusiasts took great pride in their custom-built mining “rigs” and press coverage of the growing movement typically included at least one portrait of a miner standing in front of his server rack, legs spread, arms crossed, encircled by rows and rows of blinkenlights. In contrast, our ideal LOBM would have been an antique mechanical tin bank in the form of a prospector, like this politician bank that ‘eats’ coins. We dreamed that the movement of the bank would somehow power the mining, making the LOBM perhaps the first Bitcoin mining automaton.
But, alas, we couldn’t find any mechanical banks that seemed right, so we settled for some old Disney merchandise, a plastic bank in the likeness of Stinky Pete, the antagonist of Toy Story 2.
The technical requirements for mining Bitcoin are simple: reliable electricity, a computer, and an internet connection. We wanted the LOBM to be self-contained, mining with only the gear he could carry. So like the gold-seekers who made their way with little more than a bindle and a song, our LOBM was likewise minimally outfitted with a BeagleBone Black hobby computer and a cheap Wi-Fi dongle. Powerful enough to run Debian Linux but hardly a match for the custom Bitcoin rigs already chugging away on the blockchain. The BeagleBone seemed like an appropriate platform for a clueless and enthusiastic newcomer — poignant, absurd, and a bit pitiful.
In retrospect, 2013 was a year of technological upheaval in Bitcoin. Just as LOBM was getting ready to start mining on the BeagleBone’s 1 GHz CPU, all of the serious Bitcoin miners were dumping their homebrew rigs in favour of ‘application-specific’ chips, or ‘ASICs.’ These specialised microchips were bundled into devices designed to precisely execute the cryptographic function required to mine Bitcoin and nothing more. Even the most tricked-out consumer hardware was no match for these ultra-high efficiency machines and our BeagleBone cowered at the feet of intimidating ASICs like the Butterfly Labs Bitforce and the TerraHash DX Large. Off-the-shelf mining fell so far behind the state of the art that the maintainers of many popular mining applications simply deleted their CPU mining code.
The general opinion among Bitcoin experts was that trying to mine on a CPU was like entering a go-kart in the Indy 500. Ignoring this advice, we installed an out-of-date copy of cpuminer anyway and, against all odds, LOBM was ready to hit the mines!
It seemed, however, that the Lonely Old Bitcoin Miner was not going to be so lonely after all. In 2013, nearly every tutorial we came across suggested joining up with a mining ‘pool’ rather than mining ‘solo.’ Mining pools are cooperative networks of miners who divvy up the work and the rewards that come with validating Bitcoin transactions. The topology of a typical mining pool is a ‘hub and spokes’ network in which only the hub node connects to the global Bitcoin network. When the hub learns about a new block of Bitcoin transactions, it sends out computational work for the members of the pool to grind over in parallel. Due to the inherent randomness of the “proof-of-work” function that secures the blockchain, the likelihood of finding a solution quickly grows with the size of the pool. The key advantage of joining a pool is that even low-power miners have a chance to earn some Bitcoin for their work.
With LOBM chipping away on the periphery of a giant mining pool at 560 kilohashes-per-second — roughly 1/1000th the rate of the cheapest ASICs on the market in 2013 — we decided to introduce him to the world. As a member of a very active pool, he was able to successfully mine tiny fractions of Bitcoins, digital flashes in the pan, so we made a Twitter account for the LOBM, and watched as he broadcast his luck. After a year, he had more followers (14) than he did Bitcoins (0), which isn’t saying much.
After about twelve months working with the pool, the difficulty of mining had risen dramatically and LOBM was in desperate need of an upgrade. By one estimate, the productivity of the global Bitcoin network jumped nearly 3000% between January 2014 to January 2015. And yet, despite this explosion of computational power, Bitcoin was designed to yield a steadily decreasing number of Bitcoins over time. We decided to give LOBM’s CPU a rest and find him an appropriate ASIC: the Block Erupter.
At the time of its release in May 2013, the Block Erupter was an instant hit. Unlike earlier ASICs, which could look rather menacing, the Erupter was a cute little circuit board that plugged into a standard USB port. Posters on BitcoinTalk enthused about their “low cost of entry” and described their release as “history in the making.” Soon, users were posting photos of dozens of Erupters cooled by desk fans. Eighteen months later, however, Block Erupters were abundant on eBay. They seemed like an artefact of another age, more nostalgic icon than practical tool — a perfect tool for the LOBM’s return.
Part 3. Blockchain Eureka!
With the newly equipped LOBM rating an average 336 megahashes per second, our understanding of his relationship to Bitcoin began to change. We stopped thinking about LOBM as a digital metallist hoping hopelessly to strike it rich. After more than a year of hopeless hashing, wouldn’t the LOBM want more than quick money?
With the bonanza far behind him, we reasoned, the LOBM stuck to mining out of a commitment to the network. He’s not alone in this. It seems that no one really wants to talk about ‘Bitcoin’ anymore. Instead, they want to talk about the ‘blockchain.’ The blockchain is the technology underlying Bitcoin that allows far-flung computers to come together as a network to create a permanent public ledger of all Bitcoins. There’s a quasi-joke going around: if you want an audience for any blog post, proposal, or speech about such matters, you should just do a search for the word ‘Bitcoin’ and replace it with the word ‘blockchain.’
An advanced version of this technology could be used, or so the theory goes, to do just about anything. Cryptocurrency true believers are now fascinated by next-generation projects like Ethereum, which aspires to create a programmable blockchain that will back “smart contracts” of all kinds. Some even hope that the blockchain could form the basis for Autonomous Decentralized Organizations, a kind of post-state anarcho-libertarian peer-to-peer governance structure. Of course, the blockchain also appeals to those with a less radical vision. Because it is decentralised, redundant, and public, the blockchain might also be a way to create persistent records. This could be useful anywhere.
Efforts to use the blockchain technology beyond payment reveal a part of the early Bitcoin vision not fully accounted for by digital metallism. Indeed, in Lana’s recent dissertation on payment systems, she made an analytic distinction between digital metallism and another important, and in some ways contradictory, impulse at the heart of Bitcoin: infrastructural mutualism. Adherents value Bitcoin and other cryptographic systems built on a blockchain for their ability to produce, in an idealized vision, a network of peers engaged in a voluntary effort to maintain a decentralized, distributed infrastructure for the benefit of the cooperators. In this way, Bitcoin offers a critique of dependence on state and corporate infrastructure.
Even though the recent interest in blockchain over Bitcoins brings this aspect of the project to the fore, it’s been part of Bitcoin all along. Much early talk about Bitcoin, before the big gold rush, was more about peer-to-peer payment and less about accumulation and speculation. If anything, the present interest in blockchain is a resurgence of infrastructural mutualism.
And we think we know now what the LOBM really wants. Money, the LOBM has come to realize, is, as Keith Hart puts it, a memory bank. It is a way of making material the network of obligations between people. The blockchain is an immutable record of this sociality. The LOBM wants to be part of it. He wants to be a peer. He has become an infrastructural mutualist hoping to come together with others to produce something beneficial for a larger collective, something that will overcome corporate and state oppression, something that will last forever. He wants to host the blockchain, he wants to touch eternity.
Part 4: Some peers are more equal than others?
Bitcoin is often described as “peer-to-peer” but, as our experience with mining pools — not to mention third-party wallet hosts and other Bitcoin intermediaries — taught us, not all participants in are equally addressable as peers. If the LOBM wanted to truly be a Bitcoin peer, he needed to abandon the conveniences of the mining pool and strike out on his own—in the parlance of the movement, LOBM needed to become a full node.
Over the years, many curiosity seekers have tried and failed to set up their own full nodes. Indeed, if you search the web for ‘Bitcoin,’ you are likely to encounter Bitcoin Core, the software needed to run a full node, before you find any of the (comparatively) easier to use options. Bitcoin Core is easy to install but it can be punishing to your PC. The official documentation recommends 50 GB of free hard disk space, 2 GB of RAM, and an internet connection that can handle 200 GB of traffic per month. Before Bitcoin Core can even begin to contribute to the network, it must first download and validate the entire blockchain. Let me repeat: every full node is required to first process the entire transactional history of Bitcoin.
Even ardent Bitcoin advocates attest that most Bitcoin supporters lack the resources and expertise to run a full node. The central compromise in the realisation of Bitcoin, then, is that it is not a fully distributed network of peers but rather a decentralised network in which a small number of peers running full nodes provide service to tens of thousands of ‘thin’ clients. Among infrastructural mutualists, running a full node is considered an act of generous service; an inconvenient expression of one’s commitment to the network. Whereas the early miners were compared to fortune seekers and gamblers, the administrators of full nodes are described as volunteers ‘doing their part’ for the good of the network. A group of Bitcoin advocates in Brisbane recently declared 30th August “Bitcoin Node Day” as a way to raise awareness about the need for more full nodes. Whereas digital metallists see Bitcoin as a platform for autonomous competition, they see it as an infrastructure of cooperation.
Running a full node is the ultimate dream of the LOBM, but it tests the limits of his modest hardware. We outfitted the Beaglebone with a new 64 GB SD card but the blockchain currently weighs in at just north of 70 GB and its rate of growth is rising. Storing the data is less challenging than verifying it. After 2013, new Bitcoin software began to generate increasingly large blocks that repeatedly caused Bitcoin Core to crash until we started to re-allocate big chunks of the BBB’s internal memory as swap space to prop up our limited supply of RAM. There is no easy shortcut around the computational challenge of validating the blockchain. After days and days, the LOBM is still hard at work, grinding away on transactions that were conducted back in 2013 when he first took up the Bitcoin dream.
We know that the LOBM’s meagre mining system doesn’t seem like a legitimate, good faith effort to build a full node. But the difficulty faced by the LOBM forces us to wonder what it really takes to be a peer, to imagine that we can all be peers? How might we design a truly decentralised, truly peer-to-peer economic information system?
Bitcoin, it seems, is ‘mined out’. The Bitcoin Foundation no longer suggests mining as a reasonable path to acquiring Bitcoin. But we ought not to forget that the end of homebrew mining was the result of rapid acceleration in the development of special purpose mining technology. Our little sad, sorry miner would still be sad and sorry if we’d spent most of our disposable time and income on him. Since 2013, mining has reached a truly industrial scale. According to Vice, a mining facility in rural China, one of six owned by four people, cumulatively generates 4,050 Bitcoins a month, accounting for a not insignificant 3% of the entire Bitcoin network.
Our guess is that the secretive group that owns these facilities are not fundamentally or primarily motivated by mutualism. This is evident in the top comments on the Vice video, which demonstrate the view that beyond the use of Bitcoin as a speculative commodity, the infrastructure —the blockchain itself and the computers that power it— is a vehicle for speculation. Aspiring to own the backbone of the blockchain is a longer-term gamble than simply hoarding the paltry Bitcoin that are yet to be found.
Of course, this should perhaps come as no surprise. In all gold rushes, those who produce the means for mining always make out better than the majority of individual prospectors. Efforts to ‘dig coin’ have resulted in a mining oligopoly. Going forward, there can only be a distinct miner class and a user class. Digital metallism has overwhelmed infrastructural mutualism. In this sense, Bitcoin is as much like a land grab as it is like a gold rush.
In the face of this, how could any individual — not just our sad, sweet, Lonely Old Bitcoin Miner — aspire to be a peer in Bitcoin?
Perhaps the LOBM represents a brief spark of resistance, a tiny mutualist doing his part in network of metallists. A hopelessly idealistic volunteer, he has developed an expertise and commitment to infrastructural mutualism that far outstrips his available resources to enact it at scale.
Maybe the ambiguity of peership was a problem lurking in Bitcoin all along. The following infographic, published in IEEE Spectrum in 2012, uses Alice and Bob, the classic hypothetical ‘peers’ in any cryptography puzzle, to describe how Bitcoin works. In this case, Bob is an online merchant who accepts Bitcoins and Alice is a buyer who wants to pay Bob with her Bitcoins. The infographic also adds to the mix Gary, Garth, and Glenn, who are described as Bitcoin miners. If Alice and Bob are peers, what are these guys? What is their relationship to Alice and Bob? The key problem, at least for our idealistic LOBM, is that our habits of mind are not adapted to answering questions like this. The lack of a clear definition of “peer” is as much a problem of policy (and politics) as it is a problem of technology. It therefore requires social solutions, not technological ones.
Which brings us to a conclusion our LOBM would be very disappointed with. The future of blockchain technology will likely belong to those who are neither metallists nor mutualist, who don’t really care about the techno-social politics of peership either way, who don’t care what we or the LOBM want. Most of the capital investment and serious thinking around blockchain is not happening with anarchists or activists or agorists in mind.
The world’s largest financial institution are interested in adopting the technology for their own purposes and are building private blockchains that could be used, for example, to speed up settlement latency for interbank clearance. This would be less like the World Wide Web, and more like the Sabre global distribution system, which allows all airlines, travel agencies, and distribution channels to manage reservations and schedules in a single private network. The ‘decentralised’ ‘peers’ here would be member banks.
This might be all well and good. We, and we think the LOBM, are not categorically opposed to large financial institutions doing their thing. And we may not even mind Winklevosses shadowy mining industrialists, and other Bitcoin gamblers doing their thing(s), either.
But these things have nothing whatsoever to do with the dream the LOBM once dreamed. They’re nothing compared to touching eternity.