The Cultural Impact of Blockchain Technology

The field of Game Studies examines many parts of play

Those with an ethnographic bent follow the players. Those from cinema and literature often explore the narrative techniques. Others take interest in the socio-economics of the various game industries. While I have dabbled in all of the above, games grip me for different interests. Specifically, I am obsessed with the intended and unexpected ramifications of rules.

My peers in the field are called “the proceduralists.” We tend to believe that procedures can be intentionally authored to produce desired results. Doing so is no easy feat and, in all likelihood, the procedures designed by game-makers are never wholly intended to produce those results.

This past year, I stopped studying games to focus on different sets of rules.

Those of cryptocurrencies, such as Bitcoin. The thing is, Bitcoin already benefits from a different study of games, called Game Theory. Developed by economists in the last century, Game Theory tries to mathematically model people in cooperation and in conflict. While they bring the math, I bring the cultural critique.  I am trained to think about how those models interrelate with society (as opposed to coming up with optimal strategies for navigating said models).

It turns out that Bitcoin’s meteoric rise is the result of some very interesting rules interacting with one another. And while it began as a techno-libertarian fantasy, its technology has forced upon us a peculiar ideology of its own. These peculiarities stem from bitcoin’s resistance to change and the unintended consequences of its design. My next blog post will tackle this phenomenon.

It is not easy to explain Bitcoin quickly, but here goes.

There is a piece of software that runs on many computers connected to the internet. Each holds a copy of “the ledger,” which is a large set of paired numbers. The first number in the pair is the address. The second represents an amount of Bitcoin that address holds. To get an address, you need only download the software, connect to the network and ask for one. That software acts as a “wallet” which allows you and only you to access the contents of that new address. To increase your balance, you generally give someone something of value and then they tell the network to move some of their balance to yours.

The immediate benefits of this system come from decentralized banking. Everyone who wants to participate can do so from their CPU. The fees can be very low. There is limited legislation on the process, which allows value to move across borders. The addresses are not connected to identities, which makes buying illegal things more feasible. In sum, Bitcoin promises to be un-censorable banking.

This rejection of governance is celebrated by its libertarian proponents. To learn more about them, check out “The Politics of Bitcoin: Software As Right-Wing Extremism” by David Golumbia. It is that ideology that kicked it off, but hasn’t quite held on.

Bitcoin to exist, it needed to stop one very glaring problem: double spending.

• Example: If I own 25 Bitcoin and pay 20 to Alice and then 15 to Bob, someone needs to stop me.
• Rule 1: there needs to be a time-stamper. Someone who says that the Alice transaction happened first, making the Bob transaction invalid. The problem is that there is no single owner of Bitcoin, no central bank. Someone needs to have their computer on, with a copy of the ledger, checking transactions. Three new problems: who is going to waste electricity to keep this thing going?; How are we going to prevent denial of service attacks?; and how are we going to keep the time-stamper honest?
• Rule 2: Solving the above, there needs to be a reward for the honest time-stamper. Who provides the reward? To enact this rule, Bitcoin’s code creates new Bitcoins regularly to pay the time-stampers. This incentivized people around the world to leave their computers running.

From these two principles, Bitcoin intended to decentralize control, but in many ways failed. To be continued…

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