Antonopolous Denounces Black Market Dichotomy In New Video


Andreas Antonopolous, a popular blockchain speaker and educator, has released a recording of a presentation that he gave at LaBITconf earlier this month. In the video, he discusses black markets and white markets, the biases that we hold toward them, and their relation to cryptocurrency.

Essentially, he argues that black markets do not necessarily have the traits that we usually ascribe to them. Furthermore, he says, cryptocurrency can improve every type of market indiscriminately. “Bitcoin doesn’t care,” he says. “Blockchains don’t see colors.”

Black, Grey, and White Markets

We usually assume that black and white markets have certain attributes, according to Antonopolous. We believe that black markets are bad, unfair, dangerous, and immoral, and we believe that white markets are good, fair, safe, and moral. Antonopolous questions those assumptions by describing taxi regulations:

“The taxi cartel is a white market…it is a regulated, licensed guild. A cartel. It is an inefficient, broken market, full of corruption. Uber works. It is efficient, fair, and transparent, but it is a black market. We [just] don’t call it a black market because it is run by a multinational corporation with nice graphics.”

He then goes on to describe the state of cryptocurrency in Venezuela, where individuals are using Bitcoin exchanges to bypass currency controls and escape hyperinflation — an activity that is not entirely legal, but one that is morally justifiable.

The bottom line, Antonopolous argues, is that black markets and white markets are only distinguished by whether they are licensed or not. Grey markets, he says, are the “natural state of markets” and arise whenever two or more people agree to transact. Only then do other factors, such as licensing, come into play.

Blockchain as a Justice Network

However, licensing does provide one advantage: it gives white markets access to recourse and justice provided by a government. Unfortunately, Antonopolous notes, this can lead to corruption and abuse. Measures that originally existed to protect consumers can begin to prevent competition and accountability:

“Governments provide ‘justice as a service’… [It] is only available for a certain fee to certain people, and it is usually broken…if you step outside of the white market…you have no recourse, no ability to settle disputes, and violence becomes the solution.”

But open blockchains, Antonopolous says, can provide a network of justice. For example, Ethereum’s smart contracts can protect against forgery and fraud, and public blockchains can serve as a network of justice that would otherwise be unavailable in unlicensed markets.

Furthermore, blockchain-based enforcement is not violent, as blockchain justice mainly relies on financial incentives. It also removes any immediate physical danger: as Antonopolous wryly observes, online black markets are appealing because “you cannot be stabbed over TCP/IP.”

Although Antonopolous is seen as politically incendiary by some, his speech presents a fairly broad perspective. In the grand scheme of things, Bitcoin’s once-dominant presence in black markets and its subsequent adoption by the mainstream are both sides of the same coin – the fact that markets are a universal phenomenon.

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