My occasional alter egos, Goldin+Senneby, were asked by a journalist recently to comment on the similarities (or otherwise) between their art practice (which often simulates economic activities in various ways) and the recent phenomenon of Bitcoin. This request was passed to me in my capacity as ‘spokesperson’. My response (intentionally brief) is as follows:
Bitcoin and virtuality
Angus Cameron – Spokesperson for Goldin+Senneby
As an experiment in the creation of an electronic money, Bitcoin has understandably provoked both interest and controversy. It seems to offer for the first time a potentially viable online equivalent of cash – anonymous, universal, highly liquid. It is not the first attempt to do this but so far has probably been the most successful – despite its very limited penetration into ‘real’ markets. The controversy around Bitcoin arises from several directions. Because it lacks the formal backing of any conventional system of value (state law, precious metals, etc) some deny that it is money at all. Bitcoin’s value arises from an artificial scarcity created through the complex encrypted coding on which it is based, from the upper limit of BTC21 million that will be reached around 2140 and from the simple willingness of people to accept it. Although many of those people are now businesses, hedge-funds and other legitimate market participants, Bitcoin has also been adopted by less ethical and/or patently illegal elements of the digital economy which again has been used to question its status as ‘proper’ money.
All of this tends to obscure the fact that Bitcoin is simply money. It was established as money and, despite problems of market volatility, theft and hacking, continues to function as money (albeit experimental). That it lacks formal legal sanction by any state – i.e. is not a ‘national currency’ – makes little or no difference and, if anything, serves to highlight the already contingent nature of the relation between legal authorities, central banks and money. Much of what counts and circulates as ‘money’ in the global economy (futures contracts, derivatives, Eurocurrencies, etc.) are no more ‘real’ than Bitcoin.
Some of the confusion that surrounds Bitcoin derives from the language used to describe it. In particular it is often described as a ‘virtual’ currency because it has no physical manifestation and exists solely online as digital code. Quite apart from the fact that this misuses the term virtual – because regardless of its origin or location, as soon as it is exchanged Bitcoin is an ‘actual’ currency – it also creates a false distinction with other money – all presumed to be ‘non-virtual’. Many formal state monies have only sporadically had any physical manifestation in the form of notes and coins. Although it has existed for over 900 years, for example, the pound sterling has for much of that time been a ‘ghost’ or ‘imaginary’ money – existing solely as numerical values in accounts books. At least since the emergence and rapid spread of double-entry bookkeeping in the 1480s, all money has had the potential to be expressed in a dematerialized, purely scriptural form – it makes no functional difference whether the script is rendered in ink or on a screen. The vast majority of money circulating in contemporary global financial markets has no physical form and exists beyond the reach of any state. As many conventional currencies came into being before either the nation state or the central bank, Bitcoin can be seen as a return to a situation where money is created without central legal regulation.
Insofar as money has characteristics of virtuality, this arises from its capacity to store and transmit value – however created – over both time and space. This is a feature of all money, however, not just Bitcoin, because in all cases at least part of the current value of a currency lies in its potential to create value in the future and at a distance. The value of all money is in part emergent. Similarly, all money expressed in terms of units of value is ‘digital’ irrespective of the communications systems and/or technologies used to transmit it – the digital cannot be confined to the computer and its networks.
Bitcoin’s increasing integration into to established financial and derivatives markets (it is always expressed as a metric of $US, for example) marks the key difference between the creation of an electronic currency and the creation by contemporary artists of quasi-economies (both within and for particular artworks). Although artworks can become valuable assets, they do not circulate as money. Similarly, although Bitcoin is seen by some as a challenge to conventional monies, it does not carry any critique of the money economy – indeed it seeks only to extend such an economy and embed itself within it.
In short, Bitcoin is money, not art.