Blockchains: building blocks of a post-capitalist future?

Hannes Gerhardt

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Finding the political power to pursue a more just and sustainable economy is the hard part, but the tools to effectively execute such an economy are developing quickly.

On a small boat off the coast of Thailand fishermen take stock of their haul for the day. They whip out a phone, open an app and record essential information regarding the amount of fish caught, the location, the time and under what conditions. This is uploaded to a database with similar information from other fishermen; the fish itself is packaged with a tag linked to all the sourcing information.

The fishermen are credited with a cryptocurrency called Fishcoin, which they can redeem for costly data from their local phone service provider. If they have the means, they could also trade the Fishcoin in online cryptocurrency markets. Keen to source sustainable seafood, the information on the fish is of great interest to governments, businesses and consumers, who use Fishcoin to pay for access to it, reinforcing a currency that serves local fishermen and environmental stewardship.

In Canada, Sensorica, an “open value network,” produces sensor and sensing equipment. A recent project is a sensing system and app that can help monitor and assist in the safe use of particular urban areas during the pandemic. What is unique is that there are no bosses; workers are in control of the projects to which they contribute and are paid through an algorithmically enabled value accounting system based primarily on the quantity and quality of work. Sensorica sees itself as offering a new peer-to-peer vision of manufacturing in which, “people [are] creating value together, by contributing work, money and goods and sharing the income.”

In Catalonia, the anarchist-inspired FairCoop is seeking to refashion the current global economic system from the ground up. It is pursuing this aim via a cryptocurrency called FairCoin, which is to become the preferred means to pay for goods and services among like-minded, cooperative actors worldwide. With a deep enough pool of assets denoted in FairCoin, the thinking goes, it will be possible to create a significant degree of independence from capitalist markets, especially to meet basic needs.

A Commons Bank has been formed to service FairCoin and an online FairMarket with goods and services denominated in FairCoin. By controlling this cryptocurrency, Faircoop is able to fund commons-centered, counter-capitalist initiatives like FreedomCoop, which offers legal and banking services to self-employed individuals seeking to make a living outside the exploitative grip of capital or the state.

The above cases may seem disparate, but they share a common interest in using “cryptographic ledger technology,” often referred to as “blockchain,” as a way of rethinking the valuation inherent in market-based pricing. By offering new, non-capitalist ways of measuring and pursuing value(s), blockchain promises the ability to pursue an alternative economic path to capitalism as we know it. Assuming the social and political power to do so, what would such an endeavor look like?

Valuation within capitalism

Before turning to the technology, it is important to be clear about the dysfunctional value system dominating the current economic order. In Ancient Rome, the thinker Publilius Syrus captured what would later become capitalist dogma when he said, “everything is worth what its purchaser will pay for it.”

Today, the obfuscated workings of the market — Adam Smith’s “invisible hand” — is seen as an omnipotent super-computer cranking out the current value of everything in the form of price. Following Marx, this simple reduction of value to what price it will fetch on the market happened when the basic rationale animating economic interactions shifted from one of pursuing commodity exchanges, facilitated by money (C-M-C), to using commodities as a means to gain more money (M-C-M). Money here becomes the marker of all the value in the world.

Such a valuation system, which is the very foundation of capitalism, leaves no room for any considerations of derived or inherent value, let alone ethical values. The consequences are clear: the reduction of labor to price leads to exploitation; viewing commodities as disconnected from labor results in the alienation of workers and consumers; and the never-ending externalization of environmental costs precipitates the collapse of global ecosystems.

Logically, therefore, any counter-capitalist movement must explore ways in which values — not one sole overarching value — can be re-incorporated into valuation by internalizing aspects of the economy that are generally excluded or hidden from view — both the good and the bad. Today, technology-inspired efforts, as illustrated in the examples above, are being pursued to do precisely this.

Blockchain and beyond

Blockchain is a digital, decentralized database of value-exchange transactions — essentially a ledger. It is open for anyone to see, like a shared Google document. Those who take part in viewing and building the ledger are called nodes. The ledger is established in a linear sequence of encrypted, time-stamped datasets, or “blocks.”

It is almost impossible to tamper with the ledger owing to a number of ingenious security measures, of which the most important is that the blockchain is based on the consent of the majority of nodes, i.e. it is a decentralized, peer-to-peer security system with no central site that could be compromised. The far-reaching contribution blockchain offers is the ability to create and maintain incorruptible records of monetary, product, or labor exchanges, among many other things, with no centralized intermediary such as a bank, a boss, or a government.

We are now also beginning to see the unfolding of second- and third-generation blockchain technologies, which have moved beyond capturing value transfers to establishing entire systems of value exchanges using smart contracts. A smart contract is a blockchain-enabled “if-then” program in which a particular event is triggered if a certain condition is met, which can be assessed by peer-to-peer or automated systems.

For instance, Sensorica’s value accounting system would be based on self-reporting and group verification. The information supplied by fishermen claiming Fishcoin could be assessed via a combination of autonomous sensing equipment, audits and reliance on users’ honor. Smart contracts can also be bound together into larger systems using artificial intelligence (AI) applications to create distributed autonomous organizations. Think here of Sensorica’s entire open value network being coded — from articles of association to bylaws — meaning that its complete production environment would have been created to function autonomously according to specific norms and values.

Despite its potential to make short shrift of centralized rent extractors and bosses, it is important to acknowledge that blockchain is not inherently progressive. In fact, it embodies the libertarian sentiments that are entrenched in capitalism’s market-centered value system. This means that technology-inspired, counter-capitalists have to fundamentally re-design, repurpose and re-govern blockchain’s underlying code.

FairCoin, for instance, successfully circumvented the ridiculous amounts of energy required by the verification system of traditional blockchains by re-coding the procedure through which blocks are added. FairCoin has also embraced open, democratic governance arrangements for managing its code in order to avoid the often opaque and guarded decision-making structures employed in systems like Bitcoin.

Some commons-oriented code writers are even developing cryptographic ledger systems beyond blockchain whereby anonymous, “trustless” networks are replaced by interlinked trusting groups, thereby enabling greater speed and scalability of data processing. One such effort is the biomimicry-inspired “Holochain,” a blockchain-like code described as a “method and reward structure for storing and accessing data and applications among users themselves.”

The ultimate aim of the Holochain project is to overcome the internet’s server-dependent centralization by using the participants’ excess computer processing power and hardware storage to create a true peer-to-peer internet, or “Holo network.”

Such a network will eventually require the widespread adoption of HoloPorts, the hardware that enables computer power sharing, as well as decentralized Holo applications that will run in the Holo network. The Holo apps, or Happs, will generally be aimed at making use of and expanding the peer-to-peer nature of the network, ranging from alternative social media platforms, such as Junto, to energy monitors and distribution systems such as Redgrid.

Re-valuing and de-fetishizing

How could this fancy new code challenge the human and environmental degradations caused by capitalism’s valuation system? We know that the current value system reduces labor to an exploitable commodity. In Sensorica’s open value network, however, the exploitation of labor is directly challenged by creating a value accounting system that is inherently meritocratic and fair, where work done within one project can also be credited if it is picked up by another. It is a commons-based peer-to-peer production arrangement rooted in fundamentally non-capitalist values — collaboration, openness, decentralization — yet one that its proponents believe can compete with and ultimately replace capitalist actors in the marketplace.

Developing such a system has been one of Sensorica’s main goals and it is now seeking blockchain-based solutions to increase its functionality, scalability and security. Holochain is one of the leading contenders to build this infrastructure.

The idea of coding commons-centered environments such as these is also the impetus for the creation of the Economic Space Agency (ECSA), a global collective of counter-capitalist economists and computer scientists seeking to expand and scale up the values-infused production pursued by the likes of Sensorica. According to Tere Vadén at ECSA, the aim is to create environments for economic interaction that “… encode incentive mechanisms and choose specific valuation metrics of non-monetary assemblages (from relationality, trust, and quality to land, labour and material goods) in smart contracts.”

Importantly, the values being coded into these environments, which can expand far past a single enterprise to encompass trans-local economies, are not limited to labor but can also address environmental issues. According to David Dao, a pioneer in employing distributed autonomous organizations to further sustainability, “we now have accessible tools to efficiently engineer economic incentives in a cheap and scalable manner…by distilling (crypto) incentives into code, we are now able to treat economics simply as software .” Driven by this conviction, Dao founded GainForest, which uses a combination of smart contracts to link donors, forest communities and sophisticated verification systems to fund and support sustainable forest stewardship, specifically in the Kayapo Indigenous territories in Brazil.

Beyond exploitation, capitalism creates a sense that goods and services are stand-alone things whose value is directly captured in their price, thereby obscuring how this value is actually derived. This is what Marx called “commodity fetishism.” This view of commodities significantly contributes to workers’ alienation because it breaks down the inter-personal relationship between producer and consumer. It also leads to a disconnect between consumer and nature.

Turning again to Sensorica, the voluntary, empowered and justly remunerated labor that could be made feasible on a large scale through blockchain-enabled, open value networks could be a way to return a sense of ownership of the labor provided. FairCoop is another instance in which workers’ alienation is challenged by facilitating self-employment with the help of the alternative FairCoin cryptocurrency. Similarly, Fishcoin challenges the disconnect between producers and consumers inherent in commodity fetishism through more transparent supply chains.

By meticulously documenting the various stages in production, producers and consumers can develop and respond to the various human and natural dimensions in a given economic activity. The blockchain-based system that reveals the various sources of the seafood we eat, for instance, is a first step in overcoming the obfuscation within existing forms of consumption, while simultaneously serving to track and hence manage the tapped resources. The potential here is significant.

Imagine a product in which each step in the production process, from raw materials to finished assembly, documents where the processing or production took place, the working conditions and the accumulated environmental footprint. Each step of the production chain would be another block in the blockchain, whereby each transaction is documented by trusted parties and validated on the digital ledger. Products would thus be given an identification code that could, for instance, be scanned by a smartphone to reveal the entire history of the product and summarize its social and environmental impacts.

Icebreaker, a company based in New Zealand specializing in Merino wool clothing, pioneered such a system by creating a “baacode.” The code could be scanned on each piece of clothing, revealing a thorough record of production, including photos and videos from high-country sheep stations to final assembly in one or more of its globally dispersed factories.

There are limitations, however. While clothing is one thing, providing detailed histories and impact assessments for complex goods, containing hundreds of parts sourced from across the world (like cars), would require an entirely different and unprecedented level of coordination. Furthermore, even if such tracking systems could be established, it would be disingenuous to suggest that they would result in close bonds between consumers, workers and nature; the labor intricacies and distances involved in both agriculture and manufacturing are simply too great.

Nevertheless, the insidious way commodity fetishization blinds us to what actually goes into production by seeing only price could at least be blunted by establishing visible, detailed, and trustworthy history/impact ledgers.


A critical code-based tool for capturing and fostering alternative forms of valuations, as shown by Fishcoin and FairCoop, is the use of values-based cryptocurrencies, or altcoins.

Cryptocurrencies give their issuers power to denominate and quantify particular assets, thereby gaining some independence from state-issued money while also enabling access to it. The blockchain tech industry, for instance, has long used cryptocurrencies as a way to fund its ventures using “initial coin offerings” (ICOs), where crypto coins are sold for “real” money. While ICOs have been plagued by speculation and fraud, this can be avoided with well-intentioned altcoins.

Arthur Brock, from the Holochain project, contends there is room for hundreds of altcoins, which can legitimately be used to fund and incentivize participation in intentional, values-oriented projects. Brock suggests these currencies can be designed to act either as a store of value or a broad medium of exchange.

According to Brock, the key to launching a successful altcoin is to ensure it actually has some worth, so it can be used to access something of value. Fishcoin, for example, is used to incentivize information gathering by fisherman directly interacting with commons resources. It achieves its value because it can both be used to buy cell phone data and coveted information on harvested seafood. As the demand for this information is relatively steady, such a token can serve as a secure store of value. Similar altcoin-based incentive systems can be envisioned to support other goods or services, such as computer processing power and storage (like the Holo network), carpool rides, or urban-produced food.

Solarcoin is one such example, where anyone producing solar energy is entitled to receive Solarcoins. Yet, such currencies have limited appeal if they cannot be used for anything. Thus, in the case of Solarcoin, its worth would dramatically increase if electricity cooperatives, for instance, accepted Solarcoin as payment for energy use. Solarcoin could also get into the business of assembling and analyzing energy data from participating households and businesses, which it could then sell in Solarcoins as a way to secure state-issued money.

Ultimately, Fishcoin and Solarcoin seek to foster particular values-based activities in a market-dominated world. Yet, if the aim is truly to challenge capitalism, then significantly delinking from market valuations would be necessary. This is the aspiration of FairCoin, among other similar altcoins, which seek to become the tokens denominating the value of a substantial, autonomous economic realm. Their success depends on the widespread participation by economic actors committed to the project.

While difficult to achieve, FairCoin’s chances are better than earlier alternative currency initiatives by facilitating blockchain-enabled, safe, digital transaction across the world without costly intermediaries, thereby enabling a much more expansive “marketplace.” If this marketplace were to achieve critical mass, FairCoin would become a viable medium of exchange. At that point, as essentially the central bank of this currency, FairCoop would be in a position to mobilize significant resources to pursue its goals in the political economy.

But …

There are, of course, numerous obstacles to overcome for blockchain to establish alternative valuations in an economic system dominated by capitalism. The open value network approach to organizing production, for instance, could be co-opted by less commons-oriented organizations. Some degree of centralization could be re-inserted, payment arrangements tweaked, while workers’ social reproduction, such as health care, could remain externalized and unvalued.

It is also possible to imagine the values-capturing efforts of meticulously documented supply chains being increasingly geared for profit. Fishcoin and Baacode, for example, were devised by for-profit companies, even if they see themselves as having a broader mission. While incorporating non-capitalist values into capitalist production systems is not necessarily bad, there is nonetheless the constant danger that profit motives will eventually dominate. The fact that the innovative Baacode was abandoned after Icebreaker was bought out by the US retail conglomerate VF Corporation starkly illustrates this concern.

To face these headwinds, any commons-oriented movement committed to alternative valuation systems must find ways to protect the commons while simultaneously trying to expand them. Endeavors like Sensorica will need to soldier on, while benefit-based corporations and cooperatives will have to hold firm against capital’s continuous drive to co-opt them.

Simply adopting a defensive approach will not suffice, which is precisely what motivates FairCoin’s efforts to steadily reclaim economic space from capital. Here, too, there are significant challenges. A fundamental concern is that managing altcoins as a free-floating cryptocurrency (meaning they can be traded at market value) runs the risk of being purchased and traded with speculative, profit-seeking intent. The relation between the altcoin and what it is meant to denominate can thus become corrupted as external, speculative capital flows in and out of the cryptocurrency to profit from price swings, thus endangering the altcoin’s fundamental purpose.

While this is a challenge for any altcoin, including Fishcoin, it is even more so for a currency striving to become a viable means of exchange. The array of goods and services that underpin its value provide significant external motivation to manipulate the currency in order to access this value. There is still significant disagreement about the gravity of this problem and how best to counter it.

Some in the FairCoin organization, for instance, have called for measures that would insulate and limit the attractiveness of the currency to capitalists. For example, a demurage function could be imposed, meaning that the purchasing power of the currency decays with time, thereby incentivizing its active use and stymying speculation or hoarding. This approach has been adopted by the Circles cryptocurrency, which, similar to FairCoin, is pursuing the widespread adoption of Circles tokens as a way to facilitate a guaranteed income.

Most advocates in the FairCoin project, however, argue that their currency is not significantly endangered by open market trade, pointing out that only 10 percent of FairCoins are circulating outside of FairCoin-sanctioned markets. Furthermore, it is argued that allowing the market to determine the currency’s value, even if that value is low, is necessary to maintain FairCoin’s ability to access state-issued tender, which, after all, still denominates almost all of the world’s goods and services.

This tension between seeking autonomy from capitalist markets and being able to engage them will undoubtedly continue to be a critical balancing act as the potential of altcoins is just starting to be explored.

Tackling the root of capitalism

David Graeber, the late anthropologist and activist who long wrestled with the question of value and money in human societies put it this way, “The ultimate value … is the freedom to create and determine value itself … The degree that such capacities can or cannot be, should or shouldn’t be, measured, quantified, ranked, compared, etc., is perhaps the greatest intellectual and ultimately political challenge we face.”

While efforts like Sensorica, Fishcoin and FairCoin face numerous obstacles and still have a long way to go, they offer promising examples of tackling the root of capitalism, namely the oppressive hold on value by market-based pricing. They offer different, intentional quantifications, not just of value, but of values. They point to possibilities of how a post-capitalist future could be arranged.

Such a future is by no means a given.

The impact of these technologies will depend on how they are designed, employed and within which broader contexts they will function. For instance, if Sensorica-type organizations begin to flourish, how will the autonomous workers, even if they are co-owners and co-beneficiaries, gain access to health care and retirement savings? Will distributed autonomous organizations be created to bring about effective and fair access to such needs? Will the state be asked to provide support, or will we descend into an individualist, libertarian nightmare economy?

How these questions are answered will depend on the continuous socio-political processes that determine what value and values are and how to pursue them. Thus, before becoming infatuated with the revolutionary potential of any given technology, counter-capitalist movements need to build awareness of, and find answers to, the essential question of value(s). Only then will it be possible to turn to emerging technologies like blockchain, which are making the operationalization of values and the incentivization within values-based systems increasingly manageable.


Hannes Gerhardt is Associate Professor of Human Geography at the University of West Georgia. He has published on a wide range of political and economic issues and is currently working on a book exploring pathways to establishing non-capitalist forms of economic production.

This essay is part of the Digital Futures series TNI is producing in collaboration with ROAR, where it was first published.

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