Money Turns Abstract: A history of money and the emergence of Bitcoin

Money has been the subject of theoretical reflection for at least the past 2500 years. Minds have focused on its definition stricto sensu—as a means of exchange that is minted and accepted in a given territory—as well as lato sensu—as something that serves as a quantitative measure of value, to purchase qualitatively diverse goods. Though Greek philosophy by and large gave scant attention to questions regarding the essence of money and its uses, an early critique of accumulation can be found in an initial systematic analysis by Aristotle, particularly in Politics and Nicomachean Ethics.

Money tends to be presented as a replacement, a common denominator and a link between people that also connects them to the world. For this reason it always possesses some metaphorical or abstract form that allows it to be transformed from being a means to being an end in itself. However, globalisation and extreme financial speculation have particularly propelled money’s evaporation and dematerialisation,[1]Although this term is widely used, ‘dematerialisation’ may not be the most appropriate expression, since the materiality of money is not at stake, but rather the supports that sustain its social … Continue reading accelerating its circulation to the maximum. The widespread digitalisation of economies has allowed banks and states to create money in almost unlimited quantities by issuing loans and using an array of other financial tools. 

It is convenient to differentiate between money as a general and abstract concept that refers to intermediation in exchanges and money as a currency or currencies—that is, what is actually used or accepted for those exchanges in a given time and space. As a conventional creation, money reflects or crystallises the modulation of social interactions. Just like the internet, it is a conceptual entity that cannot exist without a physical/technical support system, which in turn modifies its uses. Or, to put it another way, money always has a physical expression (whether coin or digital servers and fibre optics), but it still has a conceptual existence beyond any of its various physical materialisations. Today, bills and coins comprise a mere 10 per cent of the world’s money. Even while every human action is being captured and analysed, monetary circulation remains almost completely unrestricted and is largely invisible (today it moves faster and better than people). This article means to reflect on money’s contemporary transformations in light of its history and diverse concrete forms. 

Conceptions of money 

In etymological terms, the root of money is convention (the meaning of the Ancient Greek word nomos—from which derives numisma, the term used for coined money—was ‘law’, ‘custom’). Ancients perceived it as a creation established to fix debts between societies and their divinities, later adapted to commerce between people as a practical replacement for barter. Its historical origin is hazy, with multiple instances of its coming into being—it was invented at different times in diverse, unrelated cultures. Although the first ‘Western’ example of coined money was in Lydia in the seventh century BCE, its genesis can be attributed to sacrificial practice (Greek obols came into being in religious rites, and temples were the first banks). If we define the sacred as all that is not under direct human control, then that is precisely the sphere to which the origin of money pertains, since human beings are not self-sufficient and always have a need of exchange (between ourselves or with nature). This is why as long as there are people there will be money, although not necessarily currencies.

With this in mind, there are two general perspectives on money. One supposes that economic needs are always similar and that the market is natural and ahistorical. This view tends to be accompanied by functional definitions of money. For example, money is defined in economics manuals as a means of payment or exchange used to carry out transactions (buy goods and services, pay wages and bills, and so on), a unit of measure (all prices are set in monetary quantities) and a value reserve (used to maintain purchasing power, with the aim of buying goods and services in the future). Here money is thought of as having an essence, or nature, above and beyond any of its uses, as in Immanuel Kant’s Groundwork of the Metaphysic of Morals and his The Philosophy of Law. This is the predominant line of thought among twentieth-century economists. The second general perspective takes a historical position in which money always represents value, but its uses and the ideas associated with it are different for each society. Xenophon showed an impulse towards this explanation, and Aristotle criticised the accumulation of money for the danger to the community it represented.

In Aristotelian ‘economic’ notions, money is analysed from an ethical, historical and political perspective, given that the problem Aristotle was considering was how to use money for exchanges without its gaining sovereignty over the decisions involved. In other words, the problem from this point of view was how it might be used without its becoming an impediment to the independence of the polis. Aristotle’s ideas about money are situated ones: they inhabit the context of his own time, when the sectors concerned with accumulating money—even at the expense of others—were emerging for the first time in Greek history. Aristotle gives us a first general description of money: it is anything that possesses economic value, because as long as exchange exists (even in the form of barter), there is a certain notion of commensurability between parties, who acknowledge and accept trading one thing for another thing. Nevertheless, Aristotle clarified how money sufficiently, but not completely, represents value in a utilitarian fashion. In Nicomachean Ethics he explains that commensurability of different goods in trade is not ‘true’ in an ontological sense but is ‘sufficient’ for ordinary, practical and everyday use.

Aristotelian ideas had a robust influence on ancient and medieval concepts of money, but the modern era was born in opposition to them. In the seventeenth century, John Locke argued that although money is a convention, it possesses inner value that cannot be rejected by any regime. This kind of notion initiated a divide between economy and politics that would come to exalt the former and present the latter as corrupt. Locke also professed ‘innatism’, and the virtual inalienability of private property. By way of a mechanism no different from that employed by internet sites concerning cookies (like ‘by remaining on this page you accept our utilisation of your private information’), Locke saw that whoever agrees to carry out an exchange through money consents to an unequal distribution of land and goods. 

A century and a half later, in Principles of Political Economy, John Stuart Mill held that: 

There cannot, in short, be intrinsically a more insignificant thing, in the economy of society, than money; except in the character of a contrivance for sparing time and labour. It is a machine for doing quickly and commodiously, what would be done, though less quickly and commodiously, without it: and like many other kinds of machinery, it only exerts a distinct and independent influence of its own when it gets out of order. The introduction of money does not interfere with the operation of any of the Laws of Value.

Similarly, without great meditation on the topic, Adam Smith saw in money a mere means of exchange. He was more interested in describing certain natural laws which (after some simplistic exegesis) paved the way for interpretations inclined towards naturalising the market. Subsequently, perhaps due to its being founded in the abstract legal subject, liberalism was unable to develop conceptual tools capable of grasping what money, in all its complexity, comprises.

Replicating some facets of Aristotelian reasoning, in Capital Karl Marx differentiated between money [Geld] and capital [Kapital]. He defined the former as a temporal mediator between two items of merchandise—for use and the satisfaction of needs—and the latter as the result of an inversion between means and ends that demands continual increase, fuelling an unlimited desire for accumulation. Among other strategies, Marx approached the study of money using fetishism as a figure that served as a perfect model of capitalist commodification. Commodities, he explained, are seen as independent, self-evident entities, but they conceal the reality of the social relations of production that constitute them. In the same way, money is presented as a means in neutral or voluntary, rather than hierarchical, associations, which hides the unequal interrelations that pierce and constitute it. 

This leads to the paradoxical situation of the objectivation of things and the commodification of people. The mercantilisation of life in capitalism involves an objective form of fetish that acts as both replacement and mask. We therefore accept the equivalence of one ton of iron and two ounces of gold as something clear and natural, despite the fact that the physical characteristics of these substances would enable other forms of relationship. The most thorough and sophisticated of all merchandise is money: it is pure exchange value, universal replacement—the fetish of all fetishes. Due to its indeterminate form, it cloaks and hides from view the social nature of production better than any other thing. In order to gain social recognition (value), all goods must have the ability to be compared and exchanged with others. Like weight or measurement, this ability comes to be seen as a natural property of merchandise. Money enables goods to have a direct relation and favours people’s submission to their productions. The autonomisation of money—which is to say, the abstract forms of wealth that are increasingly separate from and obscure labour exploitation—is necessarily a consequence of commodity fetishism. 

Contemporary money’s avatars 

The birth of the first credit cards (in the United States) reformulated the whole structure of representing value. With the end of the Cold War, a revolution in technical possibilities, and the acceleration of financial capital, money’s digitalisation increased exponentially. 

The transition from the industrial to the financial era implies a greater degree of abstraction, and a process of value gaining autonomy from production. French theorist Jean Baudrillard, in Symbolic Exchange and Death, glimpsed a process through which signs would be liberated from what they apparently symbolise. A correlation of this process of autonomisation was that the mercantile law of value (classical political economy) would take on a phantom existence. In a world of signs ever more liberated from their referents, it becomes impossible to formulate ideas like ‘ultimate Truth’ or, similarly, support for a value with solid, indisputable backing. 

And so, the gap between substance and value has considerably widened. Today, money can be created with almost no physical effort, and concrete human needs have been separated from wage labour (work is done for money, for a pure abstraction; production is not for use but in response to demand). The goal of accumulating money has become tantamount to a collective addiction, naturalised in the attitudes of all. Even though there is more money than world today—more representation than backing—societies find themselves with tremendous levels of dearth and inequity. The grotesque bailout that central countries provided for private banks in 2008 demonstrated the full extent of neoliberalism’s performative power. Economics shapes the world more than it interprets it. We can clearly observe that money is never simply a means of exchange but rather carries a sacred, fetishised charge, turning it into an object of desire. 

Another important contribution on the subject is to be found in Georg Simmel’s Philosophy of Money, which demonstrated that during the modern era, each individual’s concrete possibilities are so far removed from their ‘true’ ends that the means come to occupy their place. Money becomes an end in itself and gains autonomy from individual subjects as well as from merchandise. Following Simmel, what makes modern money a purely quantifiable entity is its totally indeterminate essence. 

Since the eighteenth century, modern money has become more and more impersonal, abstract and quantitative. Treating a bill or coin like an irreplaceable object is nowadays a strictly individual inclination, incapable of being raised to a social level, given that states and banks, which regulate money markets, are ultimately blind to such attachments. In addition, the overwhelming majority of existing money is digital and cannot (could never) be personalised. Simmel described the dangers of money’s autonomy and suggested that traces of it are found in contemporary subjectivity. Comparable to the case of the rich in relation to the poor, money has much greater freedom than any other merchandise. Simmel also reconstructed a material history of money—from livestock to bills—that shows the route from ‘metalism’ to ‘nominalism’; that is, showing the decline of the physical aspects of money in favour of its more abstract characteristics. [2]The metalist theory of money (born in late-feudal Europe) defines the value of currency by its physical content (the embodied metal in the coin). The nominalist position argues that the value of … Continue readingToday, with the increased centrality of banks in the economy and the rapid spread of digital formats, this process would seem to have concluded in nothing short of an absolute triumph for the virtual aspect of money. 

A significant step in this transformation can be identified as taking place in 2008, with the advent of Bitcoin. Given that national currencies today are not backed by any external substance—for example, gold—the creation of Bitcoin can be seen as a response to a continuous need to expand within capitalism’s very architecture, and further facilitated by the unprecedented reduction of money’s physical aspect and the equally unprecedented expansion of its speculative function. Today, national currencies coexist with alternative ‘money’ expressions that manifest new political configurations. Money created by supermarkets, airline companies and other corporations promises to change the rules of economy worldwide. In a similar fashion, Bitcoin encapsulates the search for a form of currency that is independent of governments. 


The Global Financial Crisis of 2008 and the birth of a ‘revolutionary’ new monetary form occurred almost simultaneously. Blockchain is like a distributed accounting system that keeps an objective register of certain information; it is an immutable ledger. Bitcoin (the first world-acclaimed currency using this accounting system) has pioneered a form of decentralisation, allowing payments to be made without the presence of authorities, middle people or third parties entrusted with overseeing such transactions, drawing enormous attention to it in a world battered by the collapse of financial assets. Satoshi Nakamoto, whose identity we do not know, defined Bitcoin as a decentralised and disruptive crypto-currency, ‘a purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution’.

Another central element of this transaction protocol is the novel system of generating units of value encoded by special software that responds to algorithms that are not known a priori. Each blockchain contains a unique cryptographic code not known to anyone beforehand. In addition, as the quantity of blockchain left to be decrypted (or ‘dug up’ in its users’ mining slang) decreases (and it continually does), the algorithms’ level of mathematical difficulty intensifies, with the resulting tendency that more and more resources are concentrated in the hands of fewer actors as the cost of continuing the mining process to generate units rises. Blockchain currencies habitually recover a certain metalism (a reversion to some more concrete form of money, as in the coin era, the period of the gold standard or that of the commerce of the premodern period). Bitcoin, for example, responds to a predetermined limited substance (twenty-one million blocks of information), so each fraction gets value in relation to the proportion of bits it contains. Nevertheless, while that decline happens on each cryptocurrency, it doesn’t affect the crypto environment as a whole. 

A relationship between decentralisation, a lessening of the power of banks and states, and a degree of autonomy returning to individuals and societies is seen by many as inherent in this system. But is blockchain really a tool of resistance against the advance of neoliberalism? Is there a utopian possibility here, or does it work off the same sort of relationship that financial capital exploits today, and by which it has become a more formidable form of political power than any other? Is blockchain a weapon that serves to emancipate people, or to emancipate money? Is it a way back to money used as a means to an end, or the ultimate expression of its fetishism? In the end, does blockchain confront or reinforce contemporary capitalism? 

Blockchain’s digital nature is constructed according to principles similar to those of financial capital, enabling enormous fluidity in economic transactions, and it has the power to bring even elements that lie beyond the reach of national legal systems into capital’s arena of play. Since blockchain is anonymous and non-territorial, in theory it allows for the buying and selling of people, drugs and arms, for example. In this sense, it can be seen as merely a further sophistication of the capitalist game, a new phase of capitalism or an adaptation to the post-state era, dominated by the global market.

It is true that Bitcoin’s foundation as a finite asset makes extremely unequal accumulation impossible (unlike financial neoliberalism). In a limited system, large monopolies have no reason to exist because that would tend to bring exchange to an end. This characteristic does distance Bitcoin from aspects of today’s system. And, while blockchain’s complexity and sophistication render it inaccessible to large portions of the population, many of which have no access even to the internet, there is something in such notions as Dmitri Kosten’s ‘Crypto-Socialism’.

All the same, the present context of COVID’s spread in which physical borders are closing provides especially favourable conditions for corporations to take advantage of digital decentralisation (much more so than in 2008) in terms of conquering new markets and reinforcing unequal production relations. Accordingly, one of the effects of blockchain as a whole (that is, not only Bitcoin but the sum of all crypto currencies) could be the creation of a scenario the opposite of the one imagined when talking about the infinite openness of digital money. Besides giving hope to those who prefer to evade controls and taxes, blockchain may provide new enclosures that offer something like conditions for ‘primitive accumulation’.[3]In Marx’s Capital (chapter 24), primitive accumulation is one of the processes by which capitalism was violently produced, by enclosing public land and restricting its use to the owner. … Continue reading Corporations, such as IBM or Microsoft, may snatch free or commonly shared portions of cyberspace and data by way of privatising the mechanisms of its use. In this sense, blockchain as a whole has the potential to support a new wave of both deregulation and concentration.[4]See, for example, Robert Herian’s, ‘Anything but Disruptive: Blockchain, Capital and a Case of Fourth Industrial Age Enclosure’.

What comes next?

This wouldn’t be the first time in history that money has escaped the control of the societies that created it, entering into cycles of accumulation that dismember social ties and generating extremely unequal conditions of life. What may be different about it this time is that insatiability on the part of very powerful figures will be exacerbated by the almost limitless possibilities offered by digitalisation. Today, the relation between extant money and goods available to be purchased is at the greatest degree of dislocation ever. The infinite nature of virtual money collides with our finite world, whose very existence is in danger if current conditions are not modified. Using money today implies a great deal socially. This involves its naturalisation in a new form and an important series of assumptions that shape our lives, either as necessity or on account of ideology. Making money more available and easier to carry around and spend won’t solve social inequities either. Quite the opposite: the ‘lighter’ it is, the more effortless accumulation becomes. Imagine how many oxen—one of the first monetary standards—one might put in a room and how much cryptocurrency. Finally, let us remember that in Sparta the use of the spear-shaped obol was sustained for much longer than in the rest of Greece because Sparta’s rulers preferred not to replace them with circular coins, to hinder the transport and accumulation of money.

Today we live for money, under the phantasmagorical spell of amassing it without limits even though it no longer represents anything and is backed by nothing other than confidence or a mathematical algorithm. This is why rethinking its history and remembering that it is the result of political conflicts is so crucial. Correspondingly, it would help to keep in mind that money is by no means immune to aesthetic, cultural, social and philosophical tensions. Money exists in relation to our incompleteness. Beyond its material expression (the different materials and currencies used), it makes contact between heterogeneous entities possible; it is always the image, representation and presence of absence—it necessarily implies a leap, a degree of speculation and interpretation. However, money only makes any sense at all if it circulates between members of a society, not if it is produced to be accumulated and treated as a magnetic, autonomous, uncanny good/God. Today, money integrates a network of social relations among the mass of people who are manipulated and neglected by very powerful minorities. With it, a person’s dignity, labour and creativity can be bought, extorted and exploited. And what good is a species of money that grows, we are told, infinitely, in a finite world destined to disappear if the present trajectory of abstract money in the service of capitalism continues? 


1 Although this term is widely used, ‘dematerialisation’ may not be the most appropriate expression, since the materiality of money is not at stake, but rather the supports that sustain its social existence. Plastic, fibre optics, servers and memories are as physical as gold, paper, salt or cocoa.
2 The metalist theory of money (born in late-feudal Europe) defines the value of currency by its physical content (the embodied metal in the coin). The nominalist position argues that the value of money does not depend on the material but on political authorities and social conventions.
3 In Marx’s Capital (chapter 24), primitive accumulation is one of the processes by which capitalism was violently produced, by enclosing public land and restricting its use to the owner. Dispossession and separation from the land was a way to integrate people into the labour market as the new working class.
4 See, for example, Robert Herian’s, ‘Anything but Disruptive: Blockchain, Capital and a Case of Fourth Industrial Age Enclosure’.

About the author

Hernán Gabriel Borisonik

Hernán Gabriel Borisonik holds a doctorate in social science from the University of Buenos Aires, and is a professor in the School of Humanities at the University of San Martín (UNSAM) and a researcher at the Argentine National Scientific and Technical Research Council (CONICET). His books include Dinero sagrado (Sacred Money, 2013) and Support: Money as Material in Visual Arts (2017), free to access at until 31 July 2021.

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