The Tao of Bitcoin

Recently, while reading Ontology of Motion and revisiting Lucretius’ poem, the Taoist metaphor about how the nature of things is like water was in the back of my mind. While considering the way in which water and air and galaxies move in spiral motion, it occurred to me that liquids–because their motion is much easier to see than that of gases, and because their motion is quicker and more frequent than soil or rocks–tend to be the easiest to study when we want to learn about motion in nature. For instance, sand particles and small pebbles behaves very similar to water when they fall down a declined slope. Ice sheets in the poles behave similarly, but slowly. Tectonic plates are even slower. But water is always in motion.

Water, then, captures the attention of the student of motion merely because the movement of matter is much more easily and quickly observed in water than is the case with other elements. This–like all things–is, of course, relative. In Saturn’s moon Titan, methane behaves like water does on Earth, forming lakes and raining down. If Lao Tzu had been Saturnian, he would have dedicated the 8th chapter of the TTC to methane!

When I went back to re-read the passage of the Tao Te Ching on water, it reminded me of crypto-currencies and the high efficiency of block chain technology.

The highest excellence is like (that of) water.
The excellence of water appears in its benefiting all things,
and in its occupying,
without striving (to the contrary),
the low place which all men dislike.
Hence (its way) is near to (that of) the Tao.

… And when (one with the highest excellence) does not wrangle (about his low position),
no one finds fault with him.

Chapter 8 of Tao Te Ching by Lao-tzu, J. Legge’s translation

Notice that the word used for the widespread availability of money in a market is liquidity. Liquidity (particularly across borders and in spite of government control) is also the problem that currencies on the block chain–like bitcoin–are attempting to solve. Here is the definition:

the availability of liquid assets to a market or company.
liquid assets; cash.
a high volume of activity in a market.

The Te portion of Tao Te Ching means virtue, but in Chinese philosophy this Te is usually defined as efficiency. The book’s title therefore means “The Book of the Way (or, of the Nature of Things) and its Efficiency“. What the book teaches is that when particles, bodies, and people behave like water, they are much more efficient. This logic is applied in crypto-currencies, which is why their efficiency is compounded when compared with traditional currencies.

Behind block chain technology one finds a Tao-like anarchist philosophy. In crypto parlance, the term used for the increased efficiency of crypto liquid assets is de-centralization. But notice that the logic is similar to what is suggested by Taoist imagery: water behaves in such a way that it does not seek to control, and is not controlled itself. It simply follows its path of least resistance, occupying all the spaces that yield to it. In de-centralized networks, efficiency is not enforced and operation does not occur from the top down, but from the bottom-up. Like water, the system yields to the multitude of crevices and spaces available in the network, maximizing their usefulness, and in this way it does away with centralized authorities or a central mind–achieving in effect the efficiency of an ant colony and imitating a swarm-like, highly-efficient and organized collective mind.

The Tao Te Ching reminds us that this is how all of nature operates, not just water, and that in behaving like this, all things get done effortlessly and nature is supremely efficient. There is no central bank issuing water, or air, or putting planets in their orbits and attempting to keep them there. Things merely are allowed to do what they do. Block chain technology attempts to imitate this de-centralized logic that we see in nature, and in doing so it greatly increases the efficiency of money (and of other goods and services).

This does not mean that there are no glitches, or that better versions of these systems can’t be created. It’s also an open question to what extent what is essentially a computer program made up on 1’s and 0’s can imitate the behavior of things in nature. For now, it seems like everyone will be forced in the coming years to give the benefit of doubt to the anarchist ideologues and programmers who are experimenting with block chain technologies and see how far their innovations will take us. As for myself, I can appreciate the theory behind the block chain technologies and I’m cautiously optimistic.

About hiramcrespo

Hiram Crespo is the author of 'Tending the Epicurean Garden' (Humanist Press, 2014) and 'How to Live a Good Life' (Penguin Random House, 2020), and founder of He's also written for The Humanist, Eidolon, Occupy, The New Humanism, The Secular Web, Europa Laica, AteístasPR, and many other outlets.
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