Background: The Disruptive Power of Bitcoin

In October 2008, a person or group of people using the pseudonym Satoshi Nakamoto published in a cryptography mailing list an academic paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” (see Nakamoto 2008). Satoshi, as Bitcoin adopters have come to call them, described a decentralized system for the production of electronic money that innovatively solved what game theory mathematicians and cryptographers call the problem of ‘double spending’ digital money on the Internet (Hayes 2019: 51): how can a random online user be prevented from dishonestly duplicating units of value without the intermediation of ‘third party’ auditing agencies, such as credit card suppliers, Swift services, and banks?

Satoshi's solution combined several technologies of encryption to create the ‘blockchain’, an automated digital ledger in which every ‘peer’ holds a copy of the entire history of transactions.¹ When downloaded and running on a computer, this system will automatically fulfill two main roles. First, it registers and monitors all transactions in real time between everyone who takes part in this system, while verifying and automatically ‘agreeing’ with all those other computers about which of these transactions is fraudulent and which is honest. Second, it will ‘compete’ with other users to decipher a complicated cryptographic code, which conceals a set number of digital coins. The first computer that manages to decrypt the code ‘extracts’ these coins from its digital storage and gets to keep them. Every 10 minutes, more or less, the system seals all this data in a virtual ‘block’, which contains a detailed record of all the legal transactions as well as the details of the single computer that ‘solved’ the encrypted riddle that concealed the coins. Every such ‘block’ is then assigned with a tamper-proof ‘timestamp’ (Antonopolous 2014) and linked to the block that preceded it. This process generates a ‘chain’ of verified blocks that stretches diachronically all the way back to the first block Satoshi themselves produced on 3 January 2009.

Bitcoin is unique for two main reasons. First, its blockchain infrastructure overrides the power of any single sovereign entity to issue money or control data, while relocating and decentralizing this power into the hands of a multiplicity of users (Dodd 2018). It thus enables the establishment of a cyber-libertarian extra-statist ‘free market’ premised on private initiative and micro-economic incentives (Dahlberg 2017; Hayek [1948] 1980). Second, blockchain technology replaces trust in human decision-making processes with trust in the automatic operation of mathematical algorithms (Hayes 2019). This reliance on automation, which cryptocurrency supporters call ‘trustlessness’ (Buterin 2015; cf. Nelms et al. 2018), guarantees that financial interactions will be completed without human mediation. Bitcoin was an instant hit among advocates of laissez-faire libertarianism (Golumbia 2018) precisely because its unique features—trustlessness and decentralization—produced a digital ‘killer-app’ that enabled for the first time the use of extra-statist money at a global scale (Greenfield 2017; Maddox et al. 2016; cf. Chaum 1985).

Satoshi's invention is significant at a historical scale because it effectively initiated the age of digital money. Since 2011 entrepreneurs began creating new cryptocurrencies (Greenfield 2017); some feature their own blockchains while others use already existent blockchain networks such as those of Bitcoin or Ethereum, which was initiated in 2014 and is the second-strongest cryptocurrency in the market (cf. DuPont 2019). Today, thousands of cryptocurrencies are tradable online, most of them still unregulated by state authorities, with about one hundred ‘mainstream’ coins widely exchanged across ‘digital wallets’ that are preinstalled on users’ smartphones or computers. A dynamic ‘crypto-asset’ ecosystem has thus emerged (cf. Buterin 2017), with thousands of new companies seeking to use cryptocurrencies and blockchain technology to automate a wide range of real-life tasks, such as verifying ownership of digital or actual assets, maximizing the operation of supply chains, overseeing voting protocols, and executing ‘smart’ business contracts (cf. Tapscott and Tapscott 2016). In mid-2022 the total daily market cap of this rapidly growing financial market stood at about 1.75 trillion dollars.²

Bitcoin early adopters have been observing this trend with mixed feelings. On the one hand, the expansion of the cryptocurrency scene has been the culmination of a long process of trial and error that began with misdirected attempts at producing a decentralized digital money system in the 1980s and 1990s (Chaum 1985; Dai 1998; Szabo 2002). Those rooting for the detachment of markets from state and corporate controls saw in that process a fulfillment of a dream (Swartz 2017). On the other hand, this process has also threatened the integrity and value of Bitcoin, including the egalitarian impulses that accompanied the discourse of Bitcoin right from the beginning (Maddox et al. 2016). The arrival of new cryptographic coins and ‘assets’ has meant that the blockchain can now be used to advance various political-economic interests, including those of large industries, corporations, banks, and, indeed, states. The potential creation of a cryptocurrency called Libra by Facebook (which has meanwhile been suspended) or taxation on the purchase and sale of cryptocurrencies—all this works against the goal detailed in Satoshi's original paper (Nakamoto 2008), which envisioned the emergence of a financial tool disaggregated from the fractional-reserve banking system.³ If Bitcoin becomes merely one of the many possible applications of the blockchain, decentralization and trustlessness could be appropriated by the very centralized logic that its founders originally set out to disrupt.

I joined this debate during my investigation into the Israeli cryptocurrency scene, which began in September 2017 and continued until late 2019. Initially, I mapped the field by attending open panels and conferences. After attending some drinking nights at the Bitcoin Embassy in Tel Aviv—a Bitcoin social club that has served as a meeting hub for local Bitcoin supporters since its establishment in 2013—I realized that the Embassy was a field where the voices of cryptocurrency aficionados could be heard generically at the grassroots level. I thus focused my research on the Embassy and its people. I now turn to describe this social setting.

The Bitcoin Embassy in Tel Aviv

Yoni Shemesh established the Bitcoin Embassy in his architecture studio in Tel Aviv because he wanted to “support the revolution,” as he told me in an interview. His idea was to create a space for cryptocurrency aficionados to exchange ideas, trade, and actively promote or lobby for the use of Bitcoin. He put a placard on the wall that read “Bitcoin Embassy” and invited other early adopters he had met in Israel to join him as “ambassadors.” He later also redesigned the space to facilitate social interaction, replacing the front wall with a large glass window to convey transparency and accountability. In a country where armed guards control the entrance to almost every public institution, the message was clear: “Everybody is welcome.”

The Embassy quickly attracted different crowds. While they had diverse socio-cultural and economic backgrounds—ranging from upper-middle-class computer programmers and mathematicians to unemployed hippies, from secular atheists to the Orthodox, from millennials to baby boomers—they all shared a passion for Bitcoin and a burning desire to proselytize Satoshi's vision.⁴ It was established that each of the ambassadors would voluntarily dedicate a day or two every week to consult ‘newbies’—or ‘nubim’ in local slang—on the forthcoming cryptoeconomic ‘revolution’.⁵ This included technical advice on how transactions actually take place on the blockchain, instructions on operating digital wallets, and ideological pampering on how the ‘free economy’ of cryptocurrencies concretely advances ‘freedom’. Seeking to pragmatically organize their social world in accordance with blockchain-inspired principles, Embassy fellows distributed the different responsibilities among them. Although they had no boss or manager, they successfully created a system of cooperation based on voluntary participation. Throughout my fieldwork they continuously organized various events, including a weekly drinking night they titled “Satoshi Square,” frequent chess competitions, parties, Bitcoin-related workshops, and various conferences with the participation of some of the most important figures in the global cryptocurrency scene.

The lively environment at the Embassy also inspired the establishment of new business ventures or other relevant cryptocurrency organizations. For example, the Israeli Bitcoin Association was established in 2014 by Embassy core associates. Bits of Gold, a commercial cryptocurrency exchange firm established in 2013 by two Embassy members, was the first of its kind in Israel.⁶ The company located in the bottom floor of the Embassy the first Bitcoin ATM in the country, so that people could buy Bitcoin directly from the machine using New Israeli Shekels (NIS). The small commissions earned from these purchases were reinvested for the purchase of more Bitcoin online and further distribution. Side by side with its social function as a community center, the Embassy thus also became one of the early Bitcoin trading points in Israel.

By 2017, when I began my fieldwork at the Embassy, members had several designated Signal, Telegram, and WhatsApp groups. Over time they had developed a distinct humor, their own slang, and a rich history of shared experiences. The Israeli Bitcoin Facebook group, which Embassy members opened in 2013, now included about 30,000 followers. Smaller Facebook groups were also prevalent, used sporadically by different Embassy members for different purposes, ranging from play to business. They were by then speaking of themselves as a ‘community’ and of the socio-cultural practice of Bitcoin as its unifying infrastructure. In November 2017, this fact became pivotal in the rapid transformation of the Embassy, which almost overnight turned from a sleepy, nearly unknown space into the center of a nationwide gold rush.

The Gold Rush

In the hot autumn of 2017, Bitcoin was all over the news due to a spike in its value. New crowds began visiting the Embassy, some merely seeking information, others interested in purchasing Bitcoin from Embassy members. The first to arrive were binary options gamblers, whose trading activities were made illegal in Israel in October 2017.⁷ Then came taxi drivers and trend-spotting bohemians. By the time the global Bitcoin boom took off in December 2017, the established bourgeoisie had joined in. This included middle-class parents with Internet-savvy teenage kids and crafty high-tech entrepreneurs interested in the ‘disruptive’ potential of blockchain technology. Soon, hundreds of people were cramping the small Embassy space daily, at times waiting three or four hours to buy Bitcoin from the ATM machine.⁸ “We have been waiting for this gold rush for years now,” an ambassador called Rami told me. “I can't believe my eyes.”

The ambassadors were eager to proselytize. Nissim—a 70-year-old man who discovered Bitcoin in 2012 and has since moved into a rented flat in the vicinity of the Embassy so he can “be close to the lads”—was particularly keen. He arrived daily to explain the advantages of Bitcoin to ‘nubes’ in the face of what he kept describing as a crippled global economic system. Nissim was surprised to discover that most of the time his interlocutors were not at all interested in this kind of information. Rather, they were mostly asking questions about how Bitcoin works and how they could “make money” using this new technology. Rami, Nissim, and the other ambassadors then all but dropped their ideological aspirations and instead focused on providing technical help, assisting people to open digital wallets, and explaining the basic transaction mechanism on the blockchain.

For Rami and Nissim, the gold rush quickly turned from a huge promise to disappointment. Until that point, Embassy associates enjoyed an exclusive membership in a small community of well-informed aficionados. Suddenly, nearly overnight, they had to deal with people who were not the least interested in the ideology that was the glue of this community. Instead, they only sought quick profiteering. Excluding Rami and Nissim, who kept expounding ideological prep talks daily, the core messengers of the Bitcoin Embassy gradually disappeared into a self-imposed censorship.

Traders

The vacuum was quickly filled by investors who focused purely on profit. For example, a person in his thirties called Yossi told me that he had recently begun “dealing” Bitcoin for a living. Together with a partner, he was touting Bitcoin to and from private people, as well as gambling on (or investing in) other digital coins using online cryptocurrency exchange markets. For professional traders like Yossi, Bitcoin is a pure financial opportunity; investing in Bitcoin is done exclusively to accumulate wealth. I joined several WhatsApp and Telegram groups dedicated for trade and was amazed to witness the sheer amount of traffic on these apps, which included posts such as “Selling Bit for 50k in Tel Aviv today, driving down from Jerusalem now.” Like Yossi, traders would often buy and sell Bitcoin quickly, in large quantities, while also investing in other cryptocurrencies online in accordance with price fluctuations and market trends. The main coins included Ethereum, Bitcoin Cash, IOTA, Ripple, Cardano, Litecoin, Monero, and Verge.

“Listen carefully, bro,” Rami told a man in his twenties seeking information about Bitcoin. “All these other coins are a roulette, that's why we call them ‘shitcoins’. It's a pure gamble.”⁹ We sat on a bench in the street outside the Embassy among the bustle and indistinct conversations of people who had been queuing there for hours. “Investing in anything which is not Bitcoin,” Rami went on, “is just short-term profiteering. Bitcoin is beyond that.” Bitcoin, Rami continued to explain, provides long-term security because it is truly decentralized and therefore impossible to corrupt or destroy. Bitcoin thereby constitutes an infinite source of wealth that can liberate us from dependency on any other institution but our own free will. “One Bitcoin equals one Bitcoin,” Rami concluded, gesturing with his two index fingers to indicate that the Bitcoin value against the dollar, euro, pound, Ethereum, Monero, or any other known currency is all but irrelevant.¹⁰

The traders who flooded the Embassy were not impressed by such ideas. Instead, they frequently engaged in cash barter relations aimed at making profit in NIS. An immersive sense of thrill and urgency drenched the air, a pretext for scenes that could fit a Scorsese film. For example, a man in his early twenties once stopped his car outside the Embassy, opened the door abruptly, and declared: “I am looking for buyers urgently. I need the money now. I can sell as much as you want. Who is in?” Two young men who were waiting for their turn to use the ATM approached him and asked about his “selling rate.” After a short negotiation, the seller agreed to sell a Bitcoin worth NIS 15,000 (about US$3,500), divided between the two. He then asked them to join him in his car, and they drove away to exchange the money elsewhere.

The fear of missing out (FOMO) attracted new buyers who were willing to take risks despite a lack of experience in financial edgework.¹¹ Oded, for example, a marketing freelancer in his mid-thirties with a Trotsky-style beard and round glasses, approached me one day with a huge smile. “I have seen the light,” he told me. I had met Oded at the Embassy several weeks earlier when the gold rush had begun. He had come there to “draw information,” as he put it then. That visit convinced him that Bitcoin is not merely a passing trend or an economic bubble. Rather, Oded said he had become convinced that Bitcoin is the best possible investment opportunity in the world. He thus began visiting the Embassy daily, buying about a US$1,000 worth of Bitcoin each time. “At the beginning my wife criticized me for wasting our money,” he said. “But then, when she heard someone at her workplace regretting that he had not bought Bitcoin when it was valued at $9k, she realized I was right and told me: buy more!”

Freed from ideological constraints, traders focus on the thrill of profiteering (Dodd 2018). A US-born trader called Emma, whom I interviewed in Tel Aviv before the gold rush, compared trading to playing a game of chance. She used the term ‘egalitarianism’ in that sense, without me mentioning it, claiming that “play” with crypto is a pretext for a more egalitarian society because it establishes “democratic values” in the lives of the players, who can interact financially on equal terms. For Emma, the absence of mediating institutions not only unleashes the thrill associated with this game, but also makes it possible to participate unconditionally. Other traders I met did not specifically speak of egalitarianism as the product of individualism, but like Emma most spoke of the market as a “space” in which all individual traders are equally likely to maximize their gains.

When I spoke with Rami about traders, he gazed back at me intensely. “People who come here for quick profiting get caught up in the illusion of becoming rich, but they usually don't last long,” he said. “They panic when Bitcoin begins to plunge—and it will plunge, because that's what Bitcoin does—and then sell all their holdings and disappear.” Nissim, who sat next to us, nodded energetically. “Bitcoin naturally dispenses all the rubbish!” he exclaimed. “Those people who come here only to make money do not understand the ideology and so they can't take the losses when they come. Then they sell out and so they are naturally being projected out of the system. Only the good people stay.” But who are these ‘good’ people and what defines them as such?

Maximalists

As discussed above, traders treat Bitcoin as just another financial asset in the ‘centralized’ economic order (Swartz 2018). They demonstrate little interest in the advance of trustlessness and decentralization in society, focusing instead on the thrill of financial edgework and the promise of quick profit. Contrarily, those who define themselves as ‘Bitcoin maximalists’ argue that the main reason they use Bitcoin is to advance the emergence of an alternative moral order. In 2014, Vitalik Buterin, one of the central figures in the global cryptocurrency scene, defined maximalism as “the idea that an environment of multiple competing cryptocurrencies is undesirable ‘shitcoins’,… and that it is both righteous and inevitable that the Bitcoin currency comes to take a monopoly position in the cryptocurrency scene … it is a stance that building something on bitcoin is the only correct way to do things and that doing anything else is unethical” (cited in Frankenfield 2021).

In practice this means that Bitcoin maximalists generally reject other cryptocurrencies. For them, most ‘shitcoins’ are potential scams, and investing in them is both a waste of money and a betrayal of the goal to establish a strong, decentralized, and ‘trustless’ economy. For the maximalists I met at the Bitcoin Embassy in Tel Aviv, then, and to a great extent even for those Embassy associates who are willing to trade other cryptocurrencies, Bitcoin is not merely a symbol of rebellious liberation from the shackles that they claim limit civil freedom in the contemporary global capitalist social order. Rather, it is a meaningful tool to actively pursue and proclaim that freedom. As ambassador Jacob once told me in an interview:

We don't want to overthrow anybody. We just want to create a world for ourselves, [in which] we cooperate as a network of people who believe in a particular idea, and whoever wants to, can join us. Those who don't want to join can stay with Miri Regev [a populist Israeli right-wing politician] and the other clowns.

Maximalists insist that the existence of such an enclosed network of collaborators will enable Bitcoin holders to operate as equals in what they often describe as a parallel—in fact, improved—social reality. Equality is here seen to be the result of decentralization, and it is presented as oppositional to the alternatives, which include both the dominant fractional-reserve banking system and cryptocurrency trading practices. Unlike Bitcoin, both of these systems rely on the realization of financial or material assets in fiat currency, which sustains the alleged centralized organization of society that Bitcoinners perceive as profoundly immoral. Maximalists thus juxtapose their own aspired egalitarianism, premised on decentralization and the automation of trust, with the hierarchies of the dominant system of the nation-state.

As Yaron explained:

Why is Bitcoin good as a substitute for money and gold? Let's start with the fact that it doesn't have a sovereign … [or a] central body … [instead,] there is … a wonderful Internet ore, and/or an international freedom language that overrides boundaries and shatters the sovereign, or/and the Prophet Moses of the Third Millennium who will undoubtedly liberate us from Pharaoh … Bitcoin does not redistribute the chips on the table but it does straighten the table. It will not bring an end to poverty and injustice in the world, but it will lead to the fall of the abhorrent [financial] barriers and the profit of the few—banks, big brother, weapon industries, a sovereign, a crazy apparatus—which rape humanity by [instituting] borders and wars and rules and separating [people].¹²

Seen from the perspective of a close-knit maximalist community, investment in Bitcoin advances both personal and collective liberty. It is personal in the sense that it emphasizes free choice, responsibility, and individual boundaries. It is collective in the sense that deliverance from governmental financial regulation is seen to be attainable to every person who is willing “to step out of the matrix and join the alternative economy,” as Eran, a self-proclaimed anarcho-capitalist, told me in an interview. For him, ‘liberty’ becomes a property of the collective will of a strong, intimate community of believers. Every core maximalist I spoke to repeatedly told me that the value of Bitcoin is in fact dependent on ‘faith’ or ‘belief’ (in Hebrew: emuna) in its capacity to become a globally accepted, decentralized currency, and on the ability of those believers to form alliances with like-minded maximalists in their divergent communities across the globe. As Yaron mentions fervently, the very formation of this faith-based community is also seen to advance egalitarian tendencies in the wider society because it will help demolish entire economic and military structures that core maximalists generally perceive as corrupt, hierarchic, and tyrannical. Maximalists thus constitute a formal or nominal sense of egalitarianism that is predicated on the intimacy of the community to which they contribute, and which includes a moral responsibility toward peers, a sense of cultural intimacy, and a spirit of voluntary collaboration that will in turn also help turn the tide over entrenched inequalities at both local and global registers.

I met people whose stories reflect such beliefs even beyond the circle of core maximalists at the Embassy. Tamar, for example, is a 50-something-year-old woman who owns a restaurant in Kerem Hateimanim, a once impoverished neighborhood located in the vicinity of the colorful Ha-Carmel market in Tel Aviv. Tamar is a “Yemenite of the old generation,” as she presented herself, which in this context means a poverty-stricken, working-class background of a family whose roots go back to older waves of Jewish immigration from Yemen. To the best of my knowledge, in 2011 Tamar became the first restaurant owner in Israel to accept Bitcoin payments. In our conversation, Tamar said that she heard of Bitcoin from high-tech entrepreneurs who regularly ate in her restaurant, and that she decided to give Bitcoin a chance because she was looking for ways to circumvent the banks:

I had an ugly bankruptcy in the early 2000s, and the banks sucked my blood. They wanted to evict me from my apartment, with a small child, and claimed I owed them NIS 350 thousand. I took a lawyer and he managed to prove I only owed them 70 thousand. So I made a payment arrangement with them and since then I swore never to be reliant on them. I closed my bank account, opened an account in the Postal Office Bank instead, and began working mainly with cash and Bitcoin. The banks are the worst thieves on earth, and I don't want to have anything to do with them.

Tamar did not come to the Embassy often, but when she did, she always exchanged fiat to Bitcoin, rather than the other way around. She was not interested in buying other cryptocurrencies because, like die-hard maximalists in the Embassy, she was convinced that Bitcoin is the future of money. The crucial problem was, as Tamar also admitted, that she could not rely exclusively on Bitcoin as a main currency. Even people who work in the emerging blockchain industry and ask their contractors to be paid in Bitcoin—I know several people at the Embassy who do that—still require fiat money to buy groceries in the supermarket or pay the rent. Some form of trading—for example, selling Bitcoin for fiat or ‘diversifying’ one's cryptocurrency investment portfolio by buying and selling other cryptocurrencies online (and later using the profits in the centralized economy)—is essential for mundane living. This means that just as much as some Bitcoin investors strongly believe in the values of decentralization and trustlessness that undergird their ideology, many Bitcoin maximalists often (reluctantly) engage in the pragmatics of selling, buying, and trading Bitcoin. Rather than binary oppositions, then, trading and maximalism are two complementary forms of action that articulate different moral and ideological tendencies. I now turn to explicate this assertion.

Ideation and Materialism in Bitcoin

All Bitcoin investors agree that decentralized money empowers individuals to pursue and achieve certain forms of individual liberation, and that this very pursuit of liberation also constitutes greater equality in society at large. Different investment strategies reflect different types of liberties. Maximalists, on the one hand, promote the exchange of Bitcoin, and only Bitcoin, as much as possible; here, Bitcoin is used to advance freedom at the margins of normative social life (cf. Swartz 2017). Traders, on the other hand, simultaneously use Bitcoin, alternative cryptocurrencies, and fiat money in an expansive, or transgressive form; here, liberty is not contingent on disaggregation from wider social practices but on preserving the possibility of movement across regulated and unregulated economic milieus. Inspired by Mikhail Bakunin's ([1871] 1971) “God and the State,” I respectively call these two strategies ‘ideational’ and ‘materialist’.

Using Hegelian dialectics and a Marxian conception of history, Bakunin ([1871) 1971) argued against the idealized notion of organized state power and its ‘natural’ authority (which extends from the divine bliss of God). Side by side with his dismissal of primordial privilege, which he claimed marks all hierarchic power structures, Bakunin also offered a thorough critique of Jean-Jacques Rousseau's theory of the social contract, which holds that a ‘natural’ state of shared humanity manifests in a ‘collective will’, which thus becomes the only legitimating political authority in society. Instead, Bakunin argued, authority must be derived from the situational dynamics of everyday life, which emerge from the material conditions of reality. By the large-scale adoption of atheism, which leans on the conviction that matter constitutes spirit (rather than the other way around), it would then be possible to undermine contemporary states and replace them with new structures of authority. At the intellectual level, Bakunin thus sought to constitute a hierarchy between idealism and materialism, claiming that the former leads to docile or immobile passivity, whereas the latter necessarily anticipates social revolution. It is the rejection of ‘faith’, widely defined, which becomes the precondition for a redistribution of power in society and the precursor for institutionalizing a pragmatic socio-economic egalitarianism on a grand scale. Materialism, within this anarcho-Marxist perspective, presupposes liberty, while idealism enhances and protects the exploitative structures of the state (cf. DuPont 2019; O'Dwyer 2019).

I will use Bakunin's distinction somewhat differently when applying it to Bitcoin investment strategies. In my interpretation, there is no intrinsic hierarchy between ideation and materialism in the Bitcoin social world because both these forms of practice advance egalitarian tendencies in and around the notion of achieving freedom from state authority. Trading assumes pragmatic egalitarianism premised on the idea that all traders can equally maximize their profit potential in an open-end, deregulated market, while maximalists emphasize the ‘faith’ that unites an intimate community of equals who collaborate to create an alternative decentralized economic reality (cf. Swartz 2018). The heuristic contrast between maximalists and traders is more a question of method, and it manifests in two different approaches to the ‘use value’ and ‘exchange value’ of Bitcoin.

Let us begin with the notion of ‘ideation’, which encapsulates the techno-utopianism of Bitcoin maximalists. As I state above, maximalists anticipate a decentralized society that is dependent on the idea—or ‘belief’, as they usually describe it—that Bitcoin will survive the next economic catastrophe and will eventually reign over the world. Here, Bitcoin is seen to contain an internal value, which is derived from the fact that it is dissociated from centralized control mechanisms. Maximalists ‘believe’ that, based on this intrinsic value, Bitcoin will overcome the economic institutions of the state and demolish its financial elites. The idea that ‘one Bitcoin equals one Bitcoin’, as Rami put it, suggests that regardless of its exchange value vis-à-vis other currencies or assets, Bitcoin can be used within the confined perimeters of an enclosed economic order sustained by an close-knit community of devoted activists who constitute relationships, partnerships, and collaborations (O'Dwyer 2019). Ideation in the Bitcoin world here boils down to the social practice surrounding the belief in the intrinsic use value of Bitcoin as the hallmark of a revolutionary society capable of existing side by side with the hegemonic fiat economy, if not actually becoming the axis mundi of an emerging decentralized moral and economic order.

A ‘materialist’ strategy, on the other hand, refers to the pragmatic dismantling of societal norms and regulations by traders, who effectively zigzag between hegemonic and contentious economic orders. Materialism here boils down to the accumulation of wealth, which this zigzag potentiates. By converting Bitcoin to other standards of value, a surplus is created. The goal of investing in Bitcoin here is not the formation of an ideal revolutionary society but the achievement of material autonomy at the level of the individual. The egalitarian society that is supposed to emerge following the normalization and legalization of all crypto-assets is a potential consequence of this practice, not a goal in and of itself. It is ‘egalitarian’, as I claimed above, because it disrupts existing regulatory procedures and norms while also stressing the equal right of every person in the world to join in and maximize profits in the unregulated, decentralized cryptocurrency market. For traders, the issue is not the collapse of governments or the annulling of state economic auditing institutions, nor is it the creation of an egalitarian society of idealistic collaborators. Rather, it is the ability to integrate a new class of financial assets into existing structures, thereby emancipating new forms of value making by way of ‘democratizing’ the crypto chance game for everyone. Traders are not preoccupied with the invention of new Bitcoin applications, for example, but rather with maintaining a dynamic transgression across economic barriers (De Filippi 2014). Traders thus highlight the exchange value of Bitcoin vis-à-vis other currencies and assets. It is this materialist dimension that holds them together as a distinct group of Bitcoin supporters.

Some Bitcoinners describe maximalism and trading as inherently antagonistic, yet traders and maximalists are united in their common attempt to subvert and disrupt the logic of the hegemonic financial system. Maximalists do this by obstructing fiat money, while traders do so by producing profit from semi-legal forms of revenue (an action that in most countries involves some form of tax evasion). Maximalism and trading are also not hermetically bound as distinct phenomena. Evidently, traders at times share a strong maximalist belief in the future of Bitcoin as a digital gold (cf. Swartz 2018; Zimmer 2017) while maximalists often ‘diversify’ their cryptocurrency holdings (as a risk mitigation tactic) when they trade ‘shitcoins’. A maximalist's faith in the singularity of Bitcoin and a trader's extraction of profit thus constitute continuous—rather than antagonistic—financial positions. Precisely because both of these investment strategies are organized around the pursuit of freedom, they become complementary forms of ‘disruption’, a term that is used by both groups heuristically to describe their relative impact on mainstream notions of power and authority. Within this prism it becomes possible to think of ideational and materialist approaches to Bitcoin as ‘mutually inclusive’ forms of value making. I now turn to contemplate further on the connection between these forms of value making and egalitarianism.

Egalitarian Life in Bitcoin

Bruce Kapferer (2015) claims that the idea of egalitarianism is a self-contained paradox. This is because egalitarianism rejects the political affirmation of power—even reasonable, ‘just’, and democratic power—but it is impossible to enact it without the use of some form of nominal hierarchy that wields the power of sanction. Once egalitarian arrangements are enforced, their very ‘egalitarianism’ evaporates. Attempts to enact egalitarian structures in real life consequently often reproduce types of Jacobine terrorism that paradoxically suppress the political permissibility of egalitarian ideals (ibid.). Egalitarianism, in short, cannot produce equality.

To explain the impossibility of the realization of the fantasy of egalitarian sociality, Kapferer compares it with satire. Egalitarianism, like satire, he argues, rejects all forms of moral legitimacy. Once you begin explaining satire in moral terms—for example, by arguing that satire is acceptable only when it targets the strong and the privileged—it ceases to be satirical. Egalitarianism works in the same amoralistic way because its very paradoxicality defies framing. If one form of equality is preferred over another, and once compromise of some kind is made, the egalitarian project will no longer be fully ‘egalitarian’. It is impossible to contain egalitarianism in a concrete moral framework because, in attempting to do so, the universalism and collectivism that are the foundations of the egalitarian demand become obsolete. To solve the paradox, Kapferer abandons political definitions of egalitarianism. Instead, he defines egalitarianism as an emotional dynamic, an energetic force of sociality, if you will, whose main realistic domain is the production of critique against all forms of framing. Like satire, egalitarianism goes beyond moralistic claims to equality because its very effectivity as a social utterance depends on the ability to resist all categorizations. Egalitarianism can only be realized as a comment on reality, never as an organizational form.

When they reject the legitimacy of the fractional-reserve banking system, along with the financial elites, corporations, and governments that sustain it, both maximalists and traders also deny the moral authority and cosmology of the state, which not only ‘intermediates’ social relations bureaucratically but also infuses these relations with an emotional mystique. This denial is done by replacing the state with the market as the main spatio-temporal plane through which social life is realized, while emphasizing the disruptive potentialities of decentralization and trustlessness in the reorganization of economic life at a very large scale. The denial of the moral authority of states also signifies at least a partial denial of the egalitarianism that is implicated in the centralized socio-economic apparatuses that the state legitimizes (if it does not operate them directly). These apparatuses include progressive taxation as well as regulatory checks and balances aimed at protecting the public against corruption and theft. Paradoxically, however—and this is where the amorality of satire comes in—Bitcoinners of all creeds use the language of liberty and the symbols of egalitarianism to endow this very denial of collectivist egalitarian metaphors with a revolutionary fervor (O'Dwyer 2019). They thus substitute one impossible egalitarian mythology with another (Nelms et al. 2018).

This assertion is intuitive when referring to maximalists, who generally claim that a more ethical form of economic organization in society must be based on personal agency rather than institutional authoritarianism. They view Bitcoin as the only reliable system to fully balance societal integrity with individual desires and thus see it as a forerunner for wider egalitarian potentialities. While rarely invoking the notion of egalitarianism itself, interlocutors at the Embassy did speak of nominal equality, both as a moral ideal and a political goal. They claimed that ‘equal’ sociality, based on trustless interactions and voluntary collaboration, is in fact already practiced among the community of Bitcoin maximalists in Israel and beyond (cf. Swartz 2018). By appealing to nominal equality in their community, maximalists celebrate an ideational notion of egalitarianism, which is rooted in their commitment to the idea that Bitcoin alone offers comprehensive solutions as a money technology. The myth of equality is here the instigator of wide-ranging social change.

Traders, meanwhile, advance a pragmatic approach to Bitcoin, which includes egalitarian properties of its own. Premised on free market economic theories that celebrate private initiative and micro-economic incentives (Hayek [1948] 1980), traders presuppose equal starting positions for investors and a natural birthright to maximize profit. Egalitarianism here manifests in a dynamic of expansion across monetary boundaries, wherein all investors can pursue their interests uninhibited by external coercive powers. While Bitcoin traders invest in new blockchain start-ups that do not use Bitcoin or advance decentralization in any particular way, they also actively deal with high-volume Bitcoin trade on a regular basis, thereby contributing to the (maximalist) objective of extending the overall market capitalization value of Bitcoin. Much like maximalists, many serious traders relate to some of their cryptographic assets as rare metals and thus as stores of value rather than units of exchange, thereby taking care not to sell out even when the market slumps. A mythology of egalitarianism in such circumstances does not build on any ideal type determination of equality, but rather on economic pragmatism derived from the equal application of economic rules across society. In most cases, the traders I met in Tel Aviv would thus probably agree with Friedrich Hayek's ([1948] 1980: 15–16) famous argument on equality:

Human Reason, with a capital R … must be conceived as an interpersonal process in which anyone's contribution is tested and corrected by others. This argument does not assume that all men are equal in their natural endowments and capacities but only that no man is qualified to pass final judgment on the capacities which another possesses or is to be allowed to exercise. Here I may perhaps mention that only because men are in fact unequal can we treat them equally. If all men were completely equal in their gifts and inclinations, we should have to treat them differently in order to achieve any sort of social organization. Fortunately, they are not equal; and it is only owing to this that the differentiation of functions need not be determined by the arbitrary decision of some organizing will but that, after creating formal equality of the rules applying in the same manner to all, we can leave each individual to find his own level. There is all the difference in the world between treating people equally and attempting to make them equal. While the first is the condition of a free society, the second means, as De Tocqueville described it, “a new form of servitude.”

Both maximalists and traders reject the collectivist ethos of state egalitarianism—which all of them classify under the banner of ‘centralization’—and replace it with Hayek's type of libertarian egalitarianism, which is based on individual autonomy. However, they take different routes to legitimize such autonomy. While traders value the notion of peer-to-peer transactions well beyond the exclusive boundaries of the Bitcoin community, maximalists emphasize the integrity of a close-knit community to prove that things can be done differently. In both cases, there is an emphasis on disrupting the market via economic means, which can “straighten the table” on a grand scale, as Yaron put it. These positions ultimately promote egalitarianism in differing ways: traders push toward a pragmatic and materialist end that focuses on profit, whereas maximalists tilt toward a more ideational form of equality that builds on voluntary collaboration.

As Kapferer suggests (2015), however, both of these economic and moral claims for greater equality in everyday life cannot be fully realized without obviating the very egalitarian spirit that instigated them (cf. Nelms et al. 2018). This is so, ironically, because both are and will continue to be subjected to the hierarchies of the fiat economy. Traders do not attempt to distance themselves from the fiat economy in the first place, and maximalists are forced to convert some of their Bitcoin holdings to fiat on a regular basis so they could pay their bills. Both traders and maximalists actively participate, wittingly or not, in the economic system they seek to undermine.

Conclusion

More than mere oppositional stances, materialist trading and ideational maximalism in the world of Bitcoin expose a continuity, a range of possibilities for political action and economic protest that ultimately includes multiple ways of thinking, seeing, and doing. Rather than binary oppositions, maximalism and trading can be described as a spectrum on which all Bitcoin investors move as they negotiate structured economic, political, and cultural limitations in the context of their everyday lives. The difference would be a matter of situational focus on modes of exchange and cooperation, which present distinguished ideas about what egalitarianism is, or can be, while constantly changing shape and form in the pursuit of personal and collective liberty.

The co-existence of ideational and materialist approaches to Bitcoin investment, then, tells us something about the nature of egalitarian life. When viewed from the antagonistic margins, established societal norms are always perceived as a coercive force. The ensuing hierarchy, which is sustained by formal rules and informal norms or values, requires pragmatic responses, which ideational maximalists and materialist traders advance in different forms. That is certainly the materialist stance, which tacitly implements Hayek's ([1948] 1980) call to abandon vague romantic ideals such as equality on the road to achieve distributive economic justice. And it also marks the maximalist approach, which uses an alternative economic infrastructure to break away from the hegemonic moral—and, in fact, affective—reliance on ‘trusted’ third parties. Both these formations of value are ultimately egalitarian only in the sense that they openly defy the political mythology of state egalitarianism and seek to disrupt mainstream forms of centralized authority.

Paradoxically, the underlying egalitarian spirit of Bitcoin can be effective only if it remains marginal and semi-wild (Dodd 2018). The institutionalization of Bitcoin as a credible currency, much like the total opening of financial markets to investment in all cryptocurrencies, will merely reproduce the hierarchies that Satoshi's original paper rejected as profoundly immoral. Whether maximalists and traders are aware of the paradoxical limitations of their distinct practices, and whether they can find ways to maintain the satirical and amoral nature of their actions, is a matter of contemplation for future research on this fascinating contemporary trend.