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Labour, control, and value: Marx meets Negri in Bitcoin mining

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A Correction to this article was published on 27 December 2021

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Abstract

This article analyses the production of Bitcoin through two contradictory approaches to value: the labour theory of value as formulated by Karl Marx and value as an effect of political control proposed by Antonio Negri. Bitcoin mining is used as an exemplary case of a decentralized network that utilizes abstract labour as a regulatory mechanism. The process of Bitcoin mining is described in detail, and its consequences for the organization of labour are discussed. I argue that Bitcoin mining is a form of socialized work where abstract labour becomes a mechanism of control and thus also a source of Bitcoin’s value. I further demonstrate the controlling aspects of abstract labour on three interdependent dimensions: control of Bitcoin’s integrity, control of access to the network, and control of the class positions within the network. Consequentially, Negri’s and Marx’s views on value serve as complementary approaches to value creation in decentralized networks.

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Notes

  1. See http://speculative.capital/ (retrieved 20.7.2021).

  2. Although, as Fraser (2017) argues, even these reproductive processes were historically indirect sources of value for capitalist accumulation.

  3. This position is later expanded and reformulated as the hegemonic dominance of immaterial labour in Negri’s most famous work, the Empire trilogy (together with Hardt and Negri 2000, 2004, 2009). In this paper, my aim is to avoid the concept of immaterial labour, since the concept brings many controversies into the discussion.

  4. I follow the standard of using a capital B in “Bitcoin” when referring to the technology as well as the name of the currency. However, the lowercase b in “bitcoins” refers to the units of exchange (i.e., to the coins or tokens).

  5. Proof of work is not the only mechanism of validating transactions of cryptocurrencies, although it is most common. The other way is called the proof of stake (PoS), which is more reminiscent of the traditional banking system. In PoS, the validators have to put down a stake in the form of a certain amount of native coins, and then they can validate transactions. If they validate honestly, they receive back their stake and part of newly emitted coins plus transaction fees. If serious disputes over their validation occur, they lose a part of their stake. The higher the stake, the higher the reward for the validation in a proportional share. This system thus rewards the richer validators for being able to afford higher stakes (similarly as more prosperous banks are allowed to emit higher amounts of new credit money).

  6. The productivity of the mining devices increased from less than 0.01 gigahashes per second (GH/s) in 2009 up to 44,000 GH/s in 2019; at the same time, the energetic demands lowered from 9000 joule per gigahash (J/GH) to 0.05 J/GH within the same period (Stoll et al. 2019, 1648; de Vries 2020, 4).

  7. Stoll et al. further support this claim: “Back in January 2011, a miner with an up-to-date GPU (2 GH/s) could expect to find more than two blocks a day [with reward 100 bitcoins]. In November 2018, because of the increasing difficulty of the search puzzle, the same miner could expect to find a block every 472,339 years [with reward 12,5 bitcoins]” (2019, 1651, emphasis added).

  8. Current price per one bitcoin is $18,604 (https://coinmarketcap.com/currencies/bitcoin/markets/ retrieved 20.11.2020).

  9. The most significant share of the hash rate was previously allocated in China (up to 70%), but after the Chinese government’s crackdown on mining in June 2021, the map of global mining will undoubtedly be redrawn.

  10. Such conflict over the block size and Bitcoin’s scalability occurred in 2017. A small group of developers and miners separated from the Bitcoin Blockchain (so-called hard-fork) and created a new cryptocurrency called Bitcoin Cash, which allows the size of blocks to be adjusted according to the needs of the network. Nevertheless, Bitcoin Cash is being strongly ostracized by many members of the Bitcoin community as a “shitcoin” and the majority of the investors rejected the new cryptocurrency and stayed with the original Bitcoin (see Jeffries 2018). Some commentators described this split as a “Crypto civil war” (Clifford 2018).

  11. There are actually numerous platforms — from YouTube channels to Facebook groups to Telegram channels — where investors coordinate their trading strategies.

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Acknowledgements

I would like to thank Filip Vostal, Pablo Ampuero Ruiz and Mathias Krabbe for their valuable comments.

Funding

The article was supported by the Charles University, project GA UK No. 1298119 and project SVV No. 260 596.

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  1. Institute of Sociological Studies, Faculty of social sciences, Charles University, Prague, Czech Republic

    Martin Tremčinský

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Correspondence to Martin Tremčinský.

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Tremčinský, M. Labour, control, and value: Marx meets Negri in Bitcoin mining. Dialect Anthropol 46, 17–34 (2022). https://doi.org/10.1007/s10624-021-09638-1

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