Crypto-Currencies: From the Fetishism of Gold to Hayek Gold

Abstract

Based on the Marxist perspective of money and particularly Marx’s analysis of the fetishism of money and capital, Nakatani and Mello grapple with the nature of crypto-currencies, especially Bitcoin, highlighting their explosive growth in 2017 as a part of the dynamics of the overaccumulation of capital, which has been circling the world for decades, particularly in financial markets, in search of new and old assets that might serve as the means for the appropriation of fictitious income and which have taken on the most foolish and fetishized forms.

This chapter was originally published in Portuguese with Crítica Marxista, 47, in 2018, and was translated into English by Kenton James Keys.

Introduction

In Book I of Capital, Marx accurately illustrates the fetishism of money when he deals with hoarding as one of the consequences of the development of commodities. He demonstrates that

circulation becomes the great social retort into which everything is thrown, to come out again as the money crystal. Nothing is immune from this alchemy, the bones of the cannot withstand it, let alone more delicate res sacrosanctae, extra commercium hominum [“consecrated objects, beyond human commerce”]. (Marx 1990, pp. 229–230)¹

Money has become increasingly fetishized throughout the development of capitalist production and, dominated by capital, has become the chief expression of wealth as a fetish, even by covert capital. From its very beginning, wealth autonomized as money has taken on various forms,² as coins and commodities whose ultimate materialization occurred in the form of gold coins.

The diversity of currencies and monetary standards, as well as the fundamental contradiction between their nominal content (their name) and their actual content (the amount of gold), opened the way for their replacement by representatives, symbols of value. The history of coins is extremely rich in the descriptions of these contradictions and the problems created by them. The devaluation resulting from the natural wear and tear of coins and counterfeiting in the process of their minting has been discussed and criticized since Nicole Oresme (2004) in 1355 to the present day, along with the problems of controls and determinations on the national “value of coins”. In 1526, Nicholas Copernicus (2004) wrote a short text, “On the coin”, that dealt with a proposal for “monetary reform”, in which he emphasized that the problems around the variety of names and monetary standards were not only due to devaluation and counterfeiting but also to the enormous confusion that arose from their coexistence.

In order to reduce circulation costs and increase safety, together with the intensification of the number of market transactions, gold storage sites were developed. Against these deposits, goldsmiths, and later money traders and banks, began issuing certificates,³ one of the forerunners of convertible paper currency and, subsequently, forced paper currency (on the seigniorage gains arising from such operations, see Note 20). From the outset, those holding these gold deposits issued more certificates than the amount of gold held, thus creating interest-bearing capital which multiplied, on paper, the quantity of gold in deposit because these certificates were loaned with interest charges.⁴

The history of banking is also rich with descriptions of the currency crises that arose from bank competition as they began to issue or create paper money or bank notes beyond their means, with or without gold reserves. These banking crises evidence the contradiction between the quantity of gold deposited and the quantity of certificates or banknotes issued.

The confusion created by the different systems, with recurrent crises, bank collapses, and bankruptcies, led some banks, because of their economic and political power in their respective countries, to exercise functions that are currently assigned to the Central Banks.⁵ These functions were assigned by the different governments to private banks that have been successively nationalized over time, most between the late nineteenth and early twentieth centuries. One exception is the Federal Reserve System (FED), which remains private to this day.

The history of money is long, varied, and extremely troubled. It is private by nature, contrary to what one might imagine or currently defend, because it is the expression of the value of commodities within a singular commodity. The contradictions of this commodity have led it to be replaced by fictitious representatives, unrelated to gold reserves, including that part which appears as printed paper and the more recent version that appears as electronic signals in the accounts of companies or banks. In addition to personal and private ownership, they have all been replaced by special non-interest bearing and non-maturing securities in the form of State paper currency (a development of credit money). These securities have been given the names of their respective national currencies and are created through credits by the private or public commercial banking system.⁶ It is fictitious money,⁷ which becomes general with the end of the convertibility, in fact and right, of the dollar into gold with the collapse of the Bretton Woods system.

More precisely, the strong wave of the internationalization of production, on a “Fordist” and financial bases, and the emergence of the Euromarkets, in particular, led to an overaccumulation of capital that manifested itself as “stagflation crises” capitalism, whose reproduction is based increasingly on promises of a future accumulation of value, in the form of bearing interest capital and fictitious capital. With this, the unrestrained character of capital has been reinforced and is expressed in the proliferation of economic crises that characterize contemporary capitalism.⁸

Crypto-Currencies

It is in this context that crises of capital have sharpened and made explicit the contradictions inherent in currencies and which surged with crypto or virtual currencies, characterized by extreme instability and a volatility of exchange rates that greatly heighten foreign exchange risks.

The first of them, called bitcoin, was created and launched in 2009 by a fictional individual named Satoshi Nakamoto, at least this is how it was disseminated, but whose real identity or identities, as it may well be a group, currently remains unknown. One of the expectations is that bitcoin will become a world currency, as the number of people and companies that accept it as currency increases. To do so, however, it must fulfill the conditions required to function as a measure of value, standard of prices, means of circulation, means of payment, means of hoarding, and finally, of money-capital subject to the fundamental determinations of production, actualization of capital and appropriation of the surplus value produced. In short, it would need to reproduce the elementary determinations of money as money, and hence its functions, as well as those of money as the form of capital. Given this, it again becomes evident that money can only be truly understood as the moment of the conception of capital.⁹

After the successful launch of bitcoin, hundreds of other virtual currencies were created in a decentralized network created from a technology called blockchain. On 3rd January 2019, a list of more than 2000 crypto-currency markets¹⁰ were to be found on the Crypto-currency Market Capitalisations website,¹¹ which are joined by others almost daily, and whose total market capitalization amounted to just over US$130 billion (at the end of 2017 this amount reached US$600 billion). In addition to bitcoin, which accounted for more than half of this capitalization, Ethereum (totaling around US$15.3 billion) and Ripple (Xrp) (US$14.6 billion) stood out. Most of them were launched as means of circulation or payment between different national currencies. Its specificity is that it allows a direct contact between a creditor and a debtor, avoiding the centralized mechanisms of the world banking system and, more importantly, the various national tax systems. In 2015 Hayek gold was launched, which proposed convertibility into gold, but is not listed in this market of crypto-currencies—which shows that new fetishes cannot escape the golden fetish, as will be seen.¹²

The Creation and Circulation of Bitcoin

Firstly, one should make explicit the nature of these virtual currencies, based on the question of the nature of money. All virtual currencies are private by nature, and by the way in which they are put into circulation, they remain fictitiously created credit money, even if their production has costs.

The creation of bitcoin is based on an extremely sophisticated, complex, and global-scale process of networked data processing called, not by chance, data “mining”.¹³ Here, we find an analogy with the ancient foundations of metal coins, the mining of gold and silver. But instead of seeking material wealth in nature itself through work, this process is accomplished through the solving of complicated mathematical algorithms that require increasingly sophisticated machines.

According to Nakamoto’s (2008) article, which revealed the idea of bitcoin a few months before its launch, the challenge was to establish a means of circulation and payments that did not depend on the regulation and trust of a central authority. In addition to voluntary acceptance, it would be necessary to ensure decentralized mechanisms for the issuance of currency and surveillance of the system to avoid fraud, and in particular, “double spending”, that is, use by a malicious individual of the same virtual currency in more than one transaction.

Without entering into technical minutiae, the solution was to create a peer-to-peer network, where each “point” or each computer constituting it is both client and server, as in the torrent network, for example, used for the sharing of music, movies, and so on. Such a network is connected around an open-source software and each member receives two keys, one “public”, known throughout the network, and another private. When transferring bitcoins, an encrypted record is created consisting of the public key of the receiver and the private key of the receiver, which legitimizes the transaction—made “public”—without, however, connecting it to the receiver. The secrecy of identities is thus preserved, which makes operations with bitcoins conducive to the practice of money laundering and illicit payments.¹⁴

Each transaction must be verified by the network and registered in a “block”,¹⁵ and to verify its authenticity, the user (“miner”) needs to solve a complex cryptographic problem (the “stress test”). The first to succeed receives, as a reward, new bitcoins (currently 25 per test solved) as well as a transaction fee. This solves two problems at once: the issue of the crypto-currency and the decentralized zeal for maintaining the system, supposedly through “free competition”. After this, the checked block inserts itself into the blockchain in a chronologically defined order, receiving a single encrypted code (hash). The introduction of a new block presupposes the verification of that code. So, the blockchain is an immense record of all crypto-currency transactions, held not by an institution but by each member of the network.¹⁶

In its initial configuration, each block should be published every ten minutes; it happens that the longer the network, the greater its processing power, and in that sense, the bitcoin algorithm was designed to progressively increase the complexity of the “stress test”. This makes it increasingly difficult to “mine”, thus simulating actual mining and depletion of deposits. The system foresees the exhaustion of these “virtual deposits” around the year 2140, with a total production of 21 million bitcoins (on 3rd January 2019, just under 17.5 million bitcoins had been mined). So, by analogy, we can associate the creation of bitcoin with the antiquated production of gold and silver metallic goods, which, when they enter the circulation of goods and that of capital too, come to function as money and as currency in its unique forms of existence. As such, it meets one of the main requirements of the old quantitative theory of money.

The creation of bitcoins implies a cost of production resulting from equipment wear and energy consumption in addition to the working time of each “miner”. This currency is priced according to the same standard currently used by all national currencies, the decimal number system, which replaced the weight measure of the metal, gold, or silver contained in each coin. The mechanism for putting it into circulation, without which it does not acquire an existential status, is the same as any other currency, either through the purchase of goods or services, loans or debt repayments. Since all these things are listed or denominated in their respective national monetary standards, such as the dollar, a certain exchange rate must be established between bitcoin and its national currencies.

When it began, the production cost of each bitcoin was quite low, rising as larger quantities were mined.¹⁷ As demand for them rose, this difference also rose, reaching stratospheric levels, impelled by speculative demand. According to the Blockchain website (https://blockchain.info/charts), from their creation in 2009 until the beginning of 2011, the bitcoin was worth cents.¹⁸ From 2011 until the beginning of 2013, its price rose to a few tens of dollars, achieving significant appreciation, and went on to be worth a few hundred dollars. Then, from the second half of 2016, a strong rise began. To give an idea, from $995.00 on 1st April 2017, each bitcoin was worth $19,499.00 on 15th December 2017, a 20-fold increase. As a result of this rise, and further reinforcing this trajectory, on 10th December 2017, bitcoins began to be traded in the futures market, the powerful Chicago Board Options Exchange and the Chicago Mercantile Exchange, which had a significant repercussion on the current price. Notwithstanding, on 29th December 2017, bitcoin price fell to US$13,216, and its total capitalization fell to US$221.6 billion, and, on 6th February 2018, the quotation fell below US$6000, which corresponds to a drop of more than 70% compared to the peak of 2017. On 3rd January 2019 bitcoin was priced at US$3822.00 and its total capitalization was US$66.9 billion. In any case, the discrepancy between the price of bitcoins in dollars and the volume of transactions is striking.

The difference between the cost of production and the price, in dollars, reached by bitcoin, is like the old seigniory in the coin minting process or the printing of paper money notes.¹⁹ This difference may be one of the explanations for the stimulus to bitcoin mining, due to the frenetic development of its market.

Can bitcoin Assume the Functions of Money in Capitalism?

Measurement of Values

The primary function of money, as a measure of value and price standard, has already been resolved and developed in its own contradictions by national currencies. All commodities, debts, and contracts are already denominated in these currencies. As the accumulation of capital developed, and because of its own tendencies and contradictions, the money form has been withdrawing.

Today, the world currency is the US dollar, which, despite all its challenges and its own contradictions, still occupies the role. So, considering that an exchange rate between bitcoin and each currency exists, in which all economic transactions would be denominated in bitcoin, this process could see national currencies being replaced by bitcoin (in the same way that the euro replaced all the national currencies in the Eurozone). As the measurement standard for both is decimal, the exchange would occur with the change of name and the value would be converted by the respective exchange rate. The greatest difficulty arises in determining if this conversion rate stems from the spectacular growth of the exchange rate or the market price of bitcoin, as well as its volatility and its instability, all typical of an essentially speculative market.

So, even if these special virtual commodities, crypto-currencies, could take on and replace the role of money as a measure of value and price standard, the volatility and instability in determining their prices, or exchange rates, would be generally transferred to the daily prices of goods and services. There would be enormous upheaval and confusion, because rather than reflecting the relative variation in the productivity of the different products, both domestic and international, it would carry with it the speculation of the fictitious virtual currency market. In the few years of its existence, in which the price of a bitcoin went from a few cents to more than US$19,000, all prices of goods and services, quoted in dollars, would have suffered brutal deflation. In the same way, all products previously quoted in dollars, as well as the company revenues, the amount of profits and State tax income would all have suffered the same falls.

Means of Circulation

Available information indicates that bitcoin has been used with increasing frequency and on a worldwide scale²⁰ as means of circulation and means of payment, that is, it participates in the final conversion of capital, of commodity into virtual money. But as a means of circulation, the world of commodities requires that there be a certain amount of money²¹ arising from the prices of commodities to be transacted. Just as the creation of bitcoin simulates the mining of gold, its quantity has a pre-set limit and its use has been, so far, very limited. The development of capital in the period of the gold standard accelerated the emergence of new forms of credit in place of the limits imposed by the production of gold or silver money. It follows that this is the pathway that bitcoin, as virtual (fictitious) credit money , will also have to tread.

Credit money, as a private creation between banks and corporations and sanctioned by State credit money, is fundamental and determinant in today’s capitalist world. This credit money is an imaginary, fictitious creation that expresses commodity values using a decimal standard of measure. Its existence is ephemeral, determined by the terms of contracts in which they have their origin and is cancelled as soon as the term expires. In the circulation of capital, that is, in its continuous metamorphosis, the entire gigantic mass of wealth in circulation is represented through debit and credit registers in companies and banks. “Money serves here as money of account and expresses the values ​​of the commodities in their prices but does not itself confront the commodities in a material shape” (Marx 1990, p. 259). In this way, fetish money as credit, whether it bears the name gold, dollar, sterling, or bitcoin, becomes a purely ideal and idealized representation of wealth, money of account, or fictitious money. That is, from the denomination of the values to the circulation of them, there is a need to create credit, either in bitcoin or any other or all crypto-currencies, totally free of any restriction or regulation, as it currently occurs. Their exchange rates should be determined in virtual markets with thousands of currencies.

Money Itself

Money, as money, has the functions of hoarding,²² of serving as a means of payment, and of world money. In this way, all owners of bitcoins, whether miners or buyers, can keep their wealth in this form as a negotiable asset in a highly developed virtual market through global computerized networks, which allows point-to-point trading, from one owner to another, without any intermediation and outside national tax systems. The hoarding of bitcoins has implications, as it can only be obtained through mining or purchase from other owners. This means that a miner can only realize his wealth through its metamorphosis, that is, through the purchase of goods or through conversion into a conventional currency, dollars, euros, pounds, yens, and so on. There is no other form of realization, usufruct or expansion of this fictitiously created wealth, except the overcoming of the hoarding of bitcoin. Currently, the difference between the cost of production and the market price is a form of transfer of wealth accumulated in any of the currencies into bitcoins.

In the early days of capitalist production and as already seen in previous modes of production, hoarding played an important role in the accumulation of wealth. With the development of capital and, particularly, its autonomous form of interest-bearing capital, hoarding has been replaced by the new determination that money has acquired in becoming money-capital . A banking and credit system has developed, which gathers together all surplus and accumulated wealth in the form of money, mainly the idle part of it, under the banner of interest-bearing capital. Furthermore, we have witnessed the credit system begin to produce credit money autonomously, a fictitious form of wealth. The current exacerbation of the alienation resulting from the fetish in which all money acquires a mysterious property of generating more money,²³ as is the appearance of bitcoin quotations, stems from this production. Nowadays this occurs daily within the banking system but also in the markets for currencies, debt, or property titles, developed and accelerated by the accumulation of capital, no matter what the specific national currency. It is in this process that bitcoin and all other crypto-currencies arise and develop yet more alternative forms for the accumulation of fictitious wealth.

A miner who creates bitcoins and accumulates them without ever converting them into commodities or capital, is outside of the circulation and global reproduction of capital. He can become a fictitious billionaire and never take advantage of the best things capitalism has ever produced, those special commodities produced for the more privileged strata of the international bourgeoisie, such as spectacular properties, yachts and jets, and private airplanes. The only way forward is to overcome the fetish of hoarding and move them into the global circulation of capital.

Other functions, such as means of payment and world money could be exercised by bitcoin, or any other virtual currency, under the condition that their exchange rates with all other currencies maintain some stability so as not to cause excessive fluctuations and accelerate currency exchange risks. In this case, the system would tend to replace it with currencies whose market prices tend to be more stable.

Money as Capital

In the dynamic, continuous, and global process of the general reproduction of capital, money functions only as money at two points in the metamorphosis of capital: first, in the conversion of money into commodities, and again, at the end in the reconversion of new commodities into money. As capital accumulates and advances, capital becomes autonomous in its forms of money-capital, productive capital, and commodity capital. In its accumulation, under the autonomous form of money-capital, it acquires a new property, that is, it becomes capital-money—a new special commodity whose value of use is to be capital and whose value is determined by its expression of quantitative value in terms of socially necessary working time. But in its most developed form, bearing-interest capital, its value will be determined by capitalizing its income, the portion of surplus value that it appropriates in the form of interest capitalized at a current or average rate of interest . This form of capital is not money even if it appears as if it were. Interest-bearing capital accumulates, fundamentally, and in its greatest quantity, as credit money, in all its most varied forms, and as debt securities.

The main and fundamental question is how virtual currencies would replace current currencies, including the dollar, which still functions as world currency, in the dynamics of circulation. This hypothetical crypto-currency would have to exercise the functions of money as money and money-capital on a daily and increasingly generalized basis, supplanting the roles played by existing national currencies. It would be a process not dissimilar to the monetary reforms in countries that replaced the monetary standard, including the name of the national currency, as occurred with the creation of the euro. The fundamental condition would be the acceptance and incorporation of the crypto-currency into the social imagination, as the new fetish. To do this, it would be necessary for most private capital units and nation-states to replace their currencies, whether as cash, credit money, or as a means of payment, not only in their territories but also in the world market, in such a way that the new currencies would be sanctioned and accepted as such. Associated with this, the blockchain networks, that produce, circulate, and control these virtual currencies, would have to surpass the central banks and replace the current credit system, the interconnectivity of credit markets, and even the banking system, as this system does not have a share of the global process of capital circulation.

In addition to the difficulties already mentioned, such developments would run counter to possible resistance from State bureaucracies, which would be against the subsequent limitation of their monetary policies. More importantly, they would face economic and geopolitical difficulties stemming from the United States’ interest in preserving the dollar as the world currency, and from other countries that might eventually aim for that position. In addition, as explained above, the fragmentation and multiplicity of crypto-currencies’ conflicts with the demand for unification and monetary standardization, driven by competitive capitalist dynamics, as well as with the increasing mobilization of the State to push forward financial markets and prevent the collapse of production of fictitious capital.²⁴ In fact, the trend toward concentration and centralization inherent in capital also occurs in the crypto-currency markets. The three most important “mining pools”, all Chinese in origin, are BTC.com, AntPool, and F2Pool, which on 3rd January 2019 held 14.3% 11.9%, and 10.7% of the bitcoin market, respectively. In fact, among the ten largest world pools, eight are Chinese, accounting for approximately 80% of the known production.²⁵ Regarding the possession of bitcoins, the numbers vary a lot, but a recent estimate estimates that 0.1% of the computer addresses connected to the bitcoin system concentrate 62% of the total offer.²⁶

One of the mechanisms propelling this centralization, and which also opens loopholes for all sorts of frauds, is so-called cloud mining, which consists of outsourcing the bitcoin generation service. Instead of investing directly in the necessary equipment and inputs, a contract is signed with a supplier, defining the mobilization of certain computational capacity for a certain period. In theory, by paying a fee, the supplier would use the means corresponding to the capacity contracted, and the investor would receive the bitcoins generated. Finally, online portfolio services are available from companies that pay interest on deposits held in crypto-currencies, so that ownership and control of these assets is transferred there.

Soon, despite the devout yearnings of the ultraliberals, and as the young Engels (1981, p. 69) observed, monopolization will tend to dominate competition, which, in turn, tends to intensify competition among ever more monolithic capitals. Such a dynamic, therefore, tends to undermine one of the pillars of virtual currencies, decentralized production and control, which would otherwise guarantee them the advantage over national currencies.

As we know, very different visions have emerged around crypto-currencies, ranging from utopians who saw in the technologies an instrument for building egalitarian relationships with voracious speculators. As transactions with crypto-currencies intensify, prices swell, and people become millionaires overnight, as was particularly the case in 2017, so-called harmony collapses, and the true nature of these markets becomes manifest, sans phrase. The technocratic logic of considering the production of money as a purely technical issue, conceived in strictly mathematical terms, collapses in the face of inescapable truth; money is a social form, a moment of capital form, fraught with contradictions and a tributary of the turbulent dynamics of capital accumulation.²⁷ Let’s take a closer look at these issues.

The Crypto-Currencies, Their Theological Mantras, and Their Ideological Underpinnings

As mentioned, hayek gold, launched in 2015, originally called hayek coin, differs from other crypto-currencies. Strictly speaking, despite being based on blockchain technology, hayek gold cannot be considered a virtual currency; it is rather, a derivative of gold; a title quoted in gold, where each hayek gold is equivalent to a gram of gold, guaranteed by the reserves of a company specializing in gold trading, Anthem Vault. ²⁸ So, it functions as an asset, whose price is linked to the gold market, valuing or devaluing according to the price of gold. But it could be, supposedly, a return to commodity-convertible currencies, as some nostalgics have suggested.²⁹

Here we have an explicit return to the gold fetish, leading to the paroxysm of the mysticism and irrationalism inherent in the ultraliberal creed that drives the apologists of crypto-currencies, as is shown in this “homage” to Friedrich August von Hayek, the main figure of the “Austrian School” along with Ludwig von Mises. In a context in which money becomes autonomous from its substance, it becomes fictitious, and to a large extent, virtual; it is intended to re-establish a kind of gold ballast, in the case of hayek gold, or to mimic (virtually) the production of precious metals, a chimera, of course, but quite significant. Underlying it is a certain intuition that making money autonomous, in relation to the general equivalent commodity, undermines an elementary determination of money, that of measure of value. If this so-called autonomization is in line with the prominence assumed by the financial markets and the fictitious forms of capital in the last decades, which is at the same time the product and nourishment of this trend, it softens the regulating character of value and enhances the excessive character of the current and increasingly turbulent and explosive dynamics of capital accumulation (Prado 2016).

Far from understanding the roots of this dynamic, which entails employing a critical and historically grounded view to penetrate the core of capitalist social forms and confronting its barbaric nature, many crypto-currencies ideologues react by reasserting the dogmas that derive from an aesthetic view of the surface of economic phenomena in the sphere of capital circulation . They understand money primarily as a means of circulation, mediating an economic metabolism that goes no further than a sophisticated barter economy, and attributes the contradictions inherent in money form to pernicious State interventions that hinder the operation of market regulation mechanisms. In summary, society appears merely as the sum of the actions of individuals carried out according to their supposedly immutable nature, that of “welfare maximizers” or “of utility”, whose initiative in a freely competitive environment would be the means of guaranteeing that which would come close to being the “common good”.

In complex societies, the nexuses established would be essentially mercantile, and the means of communicating with others and acquiring the information necessary for their rational actions, in accordance with their will and “preference structures”, would be the price system that emerges from repeated exchanges. Because consumption is seen as the ultimate purpose of all economic action and individuals are regarded as fully cognizant “economic agents” (atomized monads) who are remunerated in line with what they have dedicated to production, and because money is merely an instrument of trade or, as the Austrians would have it, a sign of “temporal preferences” through interest rates, a “metaphysical balance” between supply and demand is supposed, as Marx (1969, p. 493) denounced in his critique of “Say’s law”. The dissonant notes in this idyllic picture are almost always attributed to the State , which by its arrogant and autocratic nature extends its functions and manipulates the money supply by changing the general price level and disrupting the relative price system, thereby compromising mercantile harmony. In countering the evils of State arbitrariness, the cult of technocracy is reinforced, creating mechanisms and technical rules based on strict criteria of efficiency and effectiveness and devoid of any political or ideological influence.

In defense of the crypto-currencies, there is a common resonance in some infamous economic theses that have gained strength in the wake of the stagflation crises of the 1970s and the ensuing crisis of Keynesianism. To cite just two, it is worth recalling Hayek’s pamphlet on the “denationalization of money”, in which he proposed the abolition of State monetary authorities and the full privatization of money (Hayek 1976), or Friedman’s “monetary rules” in works such as Capitalism and Freedom (Friedman 1985), which proposes a constant increase in the monetary base at a fixed rate, and later proposes replacing the FED with a computational algorithm (Friedman 1994). Unsurprisingly, ultraliberals (Ulrich 2016) roundly applauded the proposal for a currency that was produced and “managed” in a supposedly decentralized way, immune to the discretion of a “monetary authority”, that would guarantee individual privacy and that would be produced and marketed by means of strict technical rules, supposedly based on unbridled competition and economic rationality (teleological), and which would even determine a maximum issue limit, thus defusing the inflationary and disturbing tendencies of the relative price system so feared by monetarists and the “Austrian school”.

So, in the ultraliberal idyll, everything appears to be inverted and simplistic: an anarchic and inherently unbalanced production dynamic, which repeatedly produces disastrous crises (which are the negative of capital itself, following each step of the concept, according to Grespan 2008) and to which are attributed mystical self-regulating powers; the State , which is the political form of capital, reproduces its haughty, excessive, violent, and authoritarian character, is understood as the source of all evils, and analyzed in a dualistic way, as an institutional and normative framework cleaved from the economy; this, whose foundation, engine, and purpose is the tautological valorization of value, appears to be structured around the satisfaction of individual needs and desires.

This is the crux, a highly speculative financial asset which guarantees programmers and pioneer producers an exorbitant power and advantage, whose production and management are heavily concentrated and oligopolized, which is crossed by a strongly ideological conception, and which is highly expensive in energy terms, is presented by apologists as being at the same time a mere currency and as a prodigy of technology, politically and ideologically “neutral”, a bulwark of economic rationality and free competition, and, therefore, an instrument of individual freedom, the foundation of all freedom (Varoufakis 2013; Dodd 2017).

Final Considerations

From what we have seen, at first glance, any crypto-currency could become a new national currency and even replace the dollar and other currencies as world money. However, the role played by the dollar as the main world money stems fundamentally from the power of the US economy. But no longer as money, but as money-capital . Strictly speaking, there is no impediment to the substitution of national currencies and world money for any virtual private currency in the dynamics of reproduction and expansion of capital provided they meet the requirements of the general laws of money circulation under the determinations of capital and the general laws of the capitalist accumulation.

But the conclusion that cannot be avoided is that the full and complete domination of fetishism over the production, circulation, and appropriation of capitalist wealth has reached unimaginable limits. Contemporary capitalism is solving the craziest dreams of the alchemists, of producing wealth, even if fictitious and at the same time real, through the gigantic social retort that allows us to create money from the air and turn paper into gold. These are the great fetishes of our time, far beyond the golden calf.

In criticizing the fetishism of money, Marx also managed to grasp elements that counter-indicate the possibility of building social relationships that are uncensored and not demeaned by the steamroller of capital, in which everything seeks to subject itself to the tautological movement of expanded reproduction. In his words:

[G]old and silver do not possess only the negative character of superfluous objects, with no practical use; their aesthetic qualities make them the natural matter of luxury, adornment, sumptuousness, Sunday clothing, in short, the positive form of superabundance and wealth. In our eyes they appear as the virginal light torn from the bowels of the earth: the silver reflecting all the luminous rays in their original mixture, the gold reflecting only the highest power of the colour, the red. Now the sense of colours is the most popular form of the general aesthetic sense. The etymological connection of the names of precious metals with the names of colours in the different Indo-Germanic languages was demonstrated by Jacob Grimm. (See his History of the German Language). (Marx 1994, p. 211, modified translation based on Romano 2004, p. 16)³⁰

Not even this can be said of the fetishism proper to crypto-currencies, which restores the fetishism of gold as a mere simulacrum. Its potential technological and technical innovations are necessarily subsumed to speculative fever, felt particularly acutely in contexts such as the present one, marked, on a global scale, by immense quantities of overaccumulated capital and by a lurching enlarged reproduction. Far from being an outlet for the contradictions of contemporary capitalism, crypto-currencies are, at one and the same time, their product and sustenance. More frightening than the Sphinx, it is not enough to decipher the riddle of these stunted social forms; until we overcome its foundations, we will continue to be devoured.³¹