Menger or Marx? The political ontology of cryptocurrency

One of the perennial fault-lines in monetary theory is that between commodity and credit theories of money. The emergence of alternative payment systems based on blockchain and distributed ledger technologies, of which Bitcoin is the most prominent example, has raised a host of important questions in relation to this debate. This article considers two. The first is ontological: Are Bitcoin and similar ‘cryptocurrencies’ best conceived of as money? The second is political: Do these money candidates represent an emancipatory development over state-backed fiat currency? The ontological question, we will argue, invites the political one. If it is the case, as Chartalists maintain, that (i) for some X to be money it must have certain properties which can only be imparted by political authority (broadly understood) and if (ii) political authority ought to be subject to public control, then attempts by private actors to usurp a social ‘money function’ cannot count as legitimate political developments. We will argue in support of this position. This discussion is limited to Bitcoin, though its implications generalize for relevantly similar cryptocurrencies. Our method involves considering, first, claims made by Bitcoin’s defenders about its status as money, and what accounts for that status. While these claims are often thought to extend Mengerite or generally Austrian lines of economic argument, they resonate more with Marx’s theory of monetary value. Moreover, a close assessment of that theory’s defects yields specific normative conclusions that potentially undermine the notion that Bitcoin constitutes a valid means of resisting state monetary authority.