Pete Campbell: “I have to bring this up to you. Only because I believe … it would be damaging to Sterling Cooper. It has come to my attention, completely by accident, that Donald Draper, is not who he says he is. His real name is Dick Whitman, but Dick Whitman died [in the Korean War] ten years ago. It stands to reason that he is an [usurper, and] deserter at the very least, and who knows what else!”
Bertram Cooper: “Mr. Campbell… who cares?”
“Mad Men,” where the above exchange takes place, is a meticulously made TV show. The drama that unfolds around main character Don Draper, the rest of the Sterling Cooper advertising agency workers, and their relationships, reveal layers of meaning, understated symbolism and a profound revision of identity.
From the mind of one of “The Sopranos” writers came these broken, contradictory, complex characters, full of secrets, dreams, unpleasantness and falsehood. In character design, this is known as “three-dimensionality.”
Dimensions are the aspects of something, which in a certain perspective makes it what it is. And that’s the keyword: “perspective.” In life outside of a script, we show the faces, the dimensions that we want to leave to different sectors of society, so they can shape a version of us that we are allowing to reveal.
For Cooper, founder of the agency where Draper works, the version of Dick Whitman that is a charismatic and mysterious creative director and genius of persuasion is the one that interests him. He ends the initial dialogue with: “A man is whatever room he is in, and right now Donald Draper is in this room.”
On the other hand, in geometry and physics, the dimensions of an object are the minimum coordinates to specify any point on it. For these fields and daily life, three spatial and one temporal dimensionalities are more than useful. But, in the already dying string theory, for example, the conception of an eleven-dimensional (multi) universe is fundamental.
In both ways of thinking about dimensions, we would be talking about layers of reality.
However, in science we cannot give ourselves the same freedoms as we can with social dynamics. It is necessary — for some, a duty — to bare the aspects of nature.
Between the social, and the sciences, we have disciplines such as economics, sociology, anthropology and psychology, which, although they have objective aspirations and count on methodologies and in some cases analytic units, may be difficult to know when are enough, and correct the dimensions of a phenomenon addressed.
Defining The Dimensions Of Bitcoin
So, from what perspective is Bitcoin generally viewed? When it comes to how Bitcoin “works,” in many, if not the majority, of low- and high-level explanations available, we’ll hear about distributed networks, cypherpunks, proof of work, blockchain, cryptography, the Byzantine Generals Problem, mining, hash rates; and Bitcoin as the definite solution to the proposals in DigiCash, eCash, B-money and BitGold. In other words, a straightforward progression of technological development. The product of this technical hodgepodge is described as a very unique kind of asset class, with a deflationary issuance and absolute scarcity; the money of the future.
At this point, Bitcoin can be identified in two dimensions: the monetary policy and the technological infrastructure. This latter is what pushes, and enforces our stateless, borderless and censorship-resistant money.
In assessing Bitcoin’s dimensions it is clear that it complies perfectly with the principles of run, study, share and modify. Still, it should be emphasized that Bitcoin is not to Litecoin like Debian is to Ubuntu or, more accurately, like BitTorrent is to qBittorrent. Bitcoin is more than “money backed by math,” and, as such,Bitcoin is not the same as any of its bizarre copies.
“People think software is just rules, but forget it’s a fundamentally social endeavour, and every day developers are making value decisions,” as Amir Taaki said after he reviewed my essay “New Institutional Theoric Model for Bitcoin.” “I’m not even talking about 21 million coins or the algorithm, but small changes shape the longue duree and evolution of the community/ecosystem.”
Unlike the more recognized dimensions of Bitcoin noted above, Bitcoin’s organizational dimension lacks much of a theoretical body. I think that this dimension is often reduced to the “network effect” and the element of control (who controls Bitcoin and who controls the reference implementation, Bitcoin Core); topics that could be assigned to the technical dimension.
So how do we define Bitcoin’s organizational dimension?
If we look for the definition of “network protocol,” we’ll find “sets of established rules that dictate how to format, transmit and receive data so computer network devices — from servers and routers to endpoints — can communicate regardless of the differences in their underlying infrastructures, designs or standards.”
This definition fits with Bitcoin, and is sufficient for Bluetooth, routing, file transfer, web services, etc. but not for value transmission, since it involves a fundamental social factor. But we can find a solution in the fact that the homologous of protocol in sociology, is the institution.
Defining Bitcoin’s Organizational Dimension
Douglass North, one of the fathers of Neoinstitutionalism who holds a Nobel Prize in economics, has established an important analysis in the understanding of different societies’ wealth creation.
To summarize, you can import infrastructure — let’s say some fabulous factories or transportation — from Society A to Society B, but the economic success that Society A has accomplished is still not guaranteed for Society B. You can’t import the trust, the social norms and values that are key to economic success as factories. Institutional development is not something that can be systematized, as generations of technocrats have gone out of their way to make us believe. This applies to Bitcoin as well: Anyone can replicate the infrastructure and even the monetary policy, but the culture cannot be replicated, history cannot be replicated, the development fabric and community cannot be replicated.
It’s not just the technology or the digital scarcity, but also the social endeavor around Bitcoin that makes it valuable and perpetuated in time.
Bitcoin’s Amphibious Institution
It has been common to hear that the departure of Satoshi Nakamoto in 2010 was key in making Bitcoin what it is today. This was the beginning of a metamorphosis that was consummated in the very symbolic failed attack by those who signed the New York Agreement in 2017. The product of this metamorphosis is a new type of institution, the Amphibious Institution.
Formal institutions are structures, frameworks of behavior that are easily identifiable with a defined hierarchy and therefore inherently exclusionary, where the information and capacity for action is completely asymmetric. But, how can people convince others to follow the rules within certain formal frameworks of behavior?
Well, we need existing informal institutions, like family, religion and commerce, as well as even more basic things (which doesn’t mean they are simple) like shared manners or language. Basically, everything encompassing and known as “culture” that creates frameworks of behavior without clear heads, but that are sustained by the social fabric.
Now, the Amphibious Institution has the advantage of having the rigidity of a formal institution, but without the exclusive hierarchy; and the decentralization of the informal institution, but without the inevitable fragmentation. Hence the name, since “amphibious” works as an adjective for something that has two (institutional) natures. Also, amphibians are born within one structure (aquatic), and their metamorphoses end up shaping their biological potentials (aquatic and terrestrial).
The following concepts are not new, of course, but could be understood more accurately within the model of the Amphibious Institution (organizational dimension) and its relation and dependency on the monetary and technological dimensions:
- Code Is Law: Unlike within a traditional legal framework, where the same law has its own degree of ambiguity and is also conditional (if you follow it, there is an incentive, if you do not do it, there is sanction/punishment), in the digital infrastructure there is no option or openness to personal interpretations, so coercive enforcement is not necessary or even possible. However, code becomes law when it regulates systems of behavior and has its own institutional tendencies (points two and three). A good example is the TCP/IP protocols. As David Clark put it in 1992: “We reject: kings, presidents, and voting. We believe in: rough consensus and running code.”
- Smart Money: When something is inherently enforced by code, its very nature allows automation, interaction with and maintenance of the infrastructure as long as taking into account the law (points one and three).
- Conservative Law Change: In the specific case of Bitcoin, the nature of the infrastructure is clear: a gnostic system of checks and balances. Monetary policy is an abstraction of an absolute and concrete balance in the system, with a maximum of 21 million units of account, and to make the balance effective and open, everyone has to be able to access it and it has to be difficult to control. The rigidity of the central laws is what gives credibility to the institutional body (the network). Changes to Bitcoin, while slow since each one goes through an extensive peer review, help to increase the reliability and maturity of Bitcoin (points one and two).
Thinking of Bitcoin as an institution, it doesn’t just have an epistemological advantage by bringing terms and analysis tools which were lacking before. It also represents a concept in the popular culture linked to stability and consistency, which is precisely what Bitcoin is.
I believe that this model can help to unify the understanding of the monetary, technological and organizational dimensions. This would be key to clarifying the minds of many new agents, individual users, companies and formal institutions, whether private or public.
I explain this better in my essay “New Institutional Theoric Model for Bitcoin,” which I invite you to read, where I briefly present the historical process and the metamorphosis of what would become the Amphibious Institution.
This makes me think that maybe Agustín Carstens, General Manager of the BIS, was somewhat right in declaring “Stop trying to create money!” Money is a delicate device, which has to be treated with respect and prudence, something that only an institution can do. But someone with the power to safeguard a national or multinational currency, also has the ability to destroy it. That’s why some of these formal institutions have robust systems of checks and balances, which however, can be easily evaded or convinced with an ideological narrative.
The tragedy in the character of Don Draper, which has nothing to do with his arch on “Mad Men,” is the fact that he has become an archetype. It takes just a simple search on YouTube to find that a large amount of people fantasize about being like him, working on techniques to emulate his behaviour.
Draper is a deeply dissatisfied and sad guy, in a wild industry, but they have decided to focus on the dimensions that can be used for self-projection, and I think this is a similar problem in the creation of value transmission protocols. The obsession with the infrastructural dimension has led thousands and thousands to create their “improved version of Bitcoin.” But money is not a mere technical problem; it is only through institutional development, both formal and informal, (and in this specific case, amphibious) that money can be pushed to maturation.
This is a guest post by Solairis. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
The post The Dimensions Of Bitcoin appeared first on Bitcoin Magazine.
via bitcoinmagazine.com
