Resistance Money: A Philosophical Case for Bitcoin. 2024. Andrew M. Bailey, Bradley Rettler, and Craig Warmke. Routledge.
“Bitcoin is for criminals. It’s a tool for terrorists, drug dealers, and hackers, and a plaything for degenerate speculators.”
“Compared to physical cash, bitcoin enables some wrongdoing more easily over longer distances.”
“Perhaps in the long run, bitcoin could destroy the international order by making sanctions less effective.”
“Even if bitcoin intrinsically has no serious problems, it is surrounded by a culture rife with scams.”
“Bitcoin does involve significant carbon emissions. This is bad.”
“…bitcoin benefits North Korea’s totalitarian government. This is bad.”
“…bitcoin does not automatically provide users with significant financial privacy.”
“Throughout its history, bitcoin has shown enormous volatility.”
“It might even go to zero.”
The preceding excerpts from Resistance Money will likely strike readers of this review as puzzling in view of the book’s subtitle, “A Philosophical Case for Bitcoin” (emphasis added).
In reality, authors Andrew M. Bailey (Associate Professor of Humanities, Yale-NUS College, Singapore), Bradley Rettler (Associate Professor of Philosophy, University of Wyoming), and Craig Warmke (Associate Professor of Philosophy, Northern Illinois University) are forthrightly stating the case against bitcoin in the course of arguing that on balance, one should prefer to live in a world with bitcoin rather than one without it. The book’s evenhanded approach is a welcome contrast to the extreme comments regularly heard from both bitcoin’s zealous proponents and its frequently ill-informed opponents.
High among the positives that, in the authors’ view, outweigh bitcoin’s negatives is its users’ ability to defend themselves against financial censorship. They point out that people with dissident political views who depend on conventional finance are vulnerable to shutdown of their bank accounts, blocking of their transactions, and even seizure of their funds. Bailey, Rettler, and Warmke note that such tactics are not employed solely by dictatorial governments.
From 2013 to 2017, the US Department of Justice and Federal Deposit Insurance Corporation’s “Operation Checkpoint” pressured banks to deplatform individuals and companies involved in fully legal businesses, including ATM operators, coin dealers, dating services, pawnshops, and payday lenders. In 2022, 22 rights groups including the American Civil Liberties Union and the Freedom of the Press Foundation asked PayPal to stop shutting down accounts under a new user agreement which gave the company sole discretion to confiscate up to $2,500 from customers it deemed to be publicly spreading misinformation. Bitcoin is not censorship-proof, say the authors, but it is censorship-resistant.
Resistance Money also pleads on behalf of the world’s billions of unbanked individuals. Bitcoin requires no minimum balance, charges no fees for opening an account, and does not exclude people with problematic credit histories. It is accessible to immigrants who lack documents to verify their identities and financial histories and the poor who lack the resources to obtain them. Bitcoin users need not worry about being surprised by a hidden charge, being discriminated against on the basis of their ethnicity, or living too far from a branch bank to obtain access to banking services. All they need to enter the bitcoin network is a mobile phone or a laptop. Eighty-five percent of Americans currently own smartphones, up from thirty-nine percent 10 years ago.
Masters of argumentation by virtue of their training as philosophers, the authors also tackle in a reasoned manner such standard objections to bitcoin as its high price volatility and the sizable quantity of energy consumed in mining bitcoins. Happily, the scenario presented by a 2017 Newsweek headline, “Bitcoin Mining on Track to Consume All of the World’s Energy by 2020,” did not come to pass.
Bailey, Rettler, and Warmke even address several criticisms of bitcoin that many well-informed financial practitioners have probably never previously heard. These include complaints that bitcoin is divisible into unduly small subunits (one bitcoin equals 100 million satoshis, each of which was worth about $0.00025 when the book was written), the objection that bitcoin is very unequally distributed (about 7.9 billion people on earth own none), and the allegation (disputed by the authors) that although bitcoin is purposely designed to operate without makers, mediators, or managers, bitcoin miners are in fact mediators.
The last point touches on a problem that many readers are likely to encounter in reading Resistance Money: Following certain of its arguments requires a deep immersion in the technical details of bitcoin’s design and operation. Nonspecialists may, for example, find the lengthy description of bitcoin’s failed predecessors a slog and somewhat beside the point.
Along with most other books that Enterprising Investor reviews, Resistance Money is not completely free of error. The text refers at one point to the “Great Recession of 2007-2009.” In reality, the National Bureau of Economic Research dates the beginning of that economic contraction to January 2008.
None of these difficulties or imperfections should deter practitioners from reading this authoritative examination of a controversial asset with a current aggregate value of $1.3 trillion. The book comes much closer to a CFA Institute-style ideal of rational, evidence-based analysis than most comments on bitcoin’s merits, or lack thereof. With clients asking their advisors either to add bitcoin to their portfolios or to provide a good reason for not doing so, Resistance Money will immensely help advisors reach a firmly grounded decision on which way to go.
