The Elemental Leverage of Pacific Possession(s): Mining Bitcoin’s Colonial Semantics

Assets of labour and trust

Before, during and after 1865, rai preceded, endured and survived the intrusion of every (other) currency in keeping with Yap’s reputation as a traditional empire that began to quarry between 125 and 500 AD. Stone money is still visible today, preserved at roadside archives in the municipalities of Ruul and Welloy. By touch and sight, the aragonite wheels are as unmistakable now as by their delineation in 1865 by German trader Alfred Tetens: ‘The large coins cut out of glistening white stone have the shape of a big Swiss cheese; in the middle is a hole as big as a fist through which the beam for carrying them is passed. Only a limited amount of this coinage may be made at one time, thus assuring a controlled financial system’ (Gillilland, 1975: 4). The descriptions capture rai’s curiously semiotic and politically iconic conventions. Each piece of currency is – and historically was – rarely relocated due to the extraordinary heft of being an ‘immovable, elephant-sized stone on the beach’ (‘Bitcoin’). Quasi-centralized, rai is so often alluded to in introductions to bitcoin, hackers all but claim it prototypes the distributed cryptocurrency known for ‘[p]ublic (permissionless) blockchains’ (Walch, 2015, 841 note 15):

If we take the time to search in Google the word ‘Bitcoin’ we get thousands of pages explaining that it is a decentralized system based on P2P networks using an efficient method of encryption, which is not very helpful if we want to understand how Bitcoins really work. Perhaps it is best to start at the beginning and ask ourselves: What is money? And to this end we will analyze the currency used in one of the islands of Micronesia. (Giménez, 2014)

It was determined that cryptocurrency needed to be ‘durable’ and ‘portable’ (Popper, 2016: 16); conversely, how is it possible that massive wheels of stone, heaved along on rafts of logs or by pole suspension, have come to exemplify the most unfixed fiscal signification of modern design? More to the point, how are the economic anthropologies of ‘ancient’ and ‘industrialized’ monies connected?

Bitcoin, as the first alternative currency, revolutionized the socio-economic infrastructure of blockchain, the public roster of participants whose computers are involved with payment for the work of eliminating bugs in software (Walch, 2015: 844). Thus, ‘no longer did one party have to go through a central authority or trust the other party to share information, including information in the form of value transactions’ (Raval, 2016: 1). Instead, ‘consensus’ is ‘decentralized’ (Raval, 2016: 2), making the blockchain ‘a consensus decentralized network … between decentralized miners’ (Antonopoulos, 2016: 77). Likewise, built into rai’s very architecture – and ritualized by its culturally specific exchanges – were assets of labour and trust highlighted by the famous story of stone money Keynesian economist Milton Friedman quotes in ‘The Island of Stone Money: Working Papers in Economics’ (Friedman, 1991): In Yap, there was once a coin, a ‘remarkably large and exceedingly valuable’ fei that ‘sank out of sight’, to ‘the bottom of the sea’ while being transported during a storm. The sailors, nonetheless,

…all testified that the fei was of magnificent proportions and of extraordinary quality, and that it was lost through no fault of the owner. Thereupon it was universally conceded in their simple faith that the mere accident of its loss overboard was too trifling to mention, and that a few hundred feet of water off shore ought not to affect its market value, since it was all chipped out in proper form. The purchasing power of that stone remains, therefore, as valid as if it were learning visibly against the side of the owner’s house. (Furness, 1910: 97–98)

Thus, the pre-colonial Yapese economy illustrated the epistemic phenomenon of twenty-first-century cryptocurrency: ‘a system that could live entirely in the collective computing memory of the people who used it’ (Popper, 2016: 4). Rai represent ‘a valuable present or gift’ (Gap, 1978: 44) that could transfer ownership entirely by word of mouth.

Rai functioned as ‘payment’ for expenditures accrued during daily life and cultural obligations on the island. This included compensation for tattoos, spiritual advisement and monthly food (taro, fish and yam), as well as ‘fishing equipment, canoes, for pigs or for a feast … to pay for war indemnities and the funeral expenses of the chiefs’ or to ‘buy the assistance of a neutral tribe’ during war (Gillilland, 1975: 11). It was rarely stolen; literal theft would be difficult to accomplish with rai, because it can weigh up to seven tonnes (Lafargue, 2016). Valued in the 1960s at ‘25 dollars per diameter foot’ (Gillilland, 1975: 17), and signifying greater value if transported by canoe than by ship (Gap, 1978: 46), rai were at times a matter of life and death. Transactions afforded by the stone wheels offset ransoms and funded hits or ‘hurting a person’ (Gap, 1978: 46). It did not start off so macabre.

The legend of Anagumang (Gap, 1978: 45) tells of a man inspired by his ‘fairy mother’, Le-gerem, to carve coins into fishes and moons before arriving at its ‘wheel-like form’ (Gillilland, 1975: 19) and ferried to Yap by bamboo raft (Gap, 1978: 45). ‘The first stone money was found in Tomil and the name of the stone money was ‘pul’. PUL indicates that the name comes from the word moon in Yapese’ (Gap, 1978: 47). The stone was sourced from Palau, home to ‘lime stone caves … where the stalactites are’ (Gap, 1978: 46). Made by hand, rai were chiselled using a ‘clam shell … used as TOW, the tool’ invented for that purpose (Gap, 1978: 46). Next, minders deposited rai into malal ‘village banks’ (Gap, 1978: 47) where they increased in value according to ‘the hardships one had to encounter in the process of making’ as well as its off-island sourcing (Gap, 1978: 50). These practices imbue stone money with the functional distinctions today’s analysts debate of bitcoin: ‘to serve as a unit of account, a store of value, and a medium of exchange’ (Walch, 2015, 847). For thousands of years, rai exceeded modern standards of monetary performance before these even existed. Ancestor of the Bitcoin, fei of the longue durée proved impervious to stealth, bear markets and crises of confidence.

Volatile markets, resources: All mine(d)

A bear market hit the international silver economy in the 1640s; Spain raised taxes by the 1750s (Flynn, 2001, xxxiv–xxxv). Throughout both the centuries, silver was so critical to global economics that, ‘as early as the first half of the 16th century, the Portuguese obtained significant quantities of Spanish-American silver by trading West African slaves across the Atlantic for the Spanish silver smuggled down the so-called ‘back door’ of the Andes’ (Flynn, 2001: xxviii). Such colonial presumptions of European power entrenched the foundational triumvirate Sylvia Wynter (2003) writes about: the ‘African enslavement, Latin American conquest, and Asian subjugation’ (p. 263) ‘from the Renaissance to the eighteenth century… that the West was to discursively constitute and empirically institutionalize on the islands of the Caribbean and, later, on the mainlands of the Americas’ (Wynter, 2003: 264). By 1865, stock in industrial commodities was being traded on the New York Stock Exchange. By 1866, when Mariano Torres de Navarro became the first governor of the Western Carolines of Micronesia, Spain was primed to withstand any political or economic predicament following two centuries of lost grip on a supremacy based in Mexican silver.

The year 1865 was already pivotal for Britain – between Morant Bay in the Caribbean and Second Opium War aftermath in Asia – and no less so for North and South America. The Chincha Wars were beginning in Latin America, signalling most importantly the power struggle between Peru, Chile and Spain. Around the world, economies rose and fell according to political contexts that WEB Du Bois (1986 [1940]) captures in ‘A New England Boy and Reconstruction’:

The Fifteenth Amendment enfranchising the Negro as a race became law and the work of abolishing slavery and making Negroes men was accomplished, so far as law could do it. Meanwhile elsewhere in the world there were stirring and change which were to mean much in my life: in Japan the Meiji Emperors rose to power the year I was born; in China the intrepid Empress Dowager was fighting strangulation by England and France; Prussia had fought with Austria and France, and the German Empire arose in 1871. In England, Victoria opened her eighth parliament; the duel of Disraeli and Gladstone began; while in Africa came the Abyssinian expedition and opening of the Suez Canal, so fateful for all my people. (p. 559)

Pressures that destabilized the former colonial powers churned worldwide and reverberated in the Pacific. Cora Lee Gillilland captures the spirit of that time in The Stone Money of Yap: A Numismatic Survey for the Smithsonian (Gillilland, 1975): ‘Europeans during the mid-nineteenth century moved throughout the Pacific, always in search of marketable commodities’ (5). The chronology and political patterns both involve Micronesia and suggest its necessity to Atlantic eminence and historiography. Posting a Spanish functionary to a Pacific island in 1866 brought an unprecedented pragmatism to the venture capitalization of Yap.

There were earlier signs that global economics would come to this. In the run up to 1543, the international commodities market shifted whaling south and interest in coconut emerged. The British population spiked and so did the demand for soap and ‘edible oils’ for other purposes. The resulting uptick in East–West copra trade occurred as whalers navigated from Norway and Japan to the Antarctic (Oliver, 1961: 120). With other major players moving out from the area, Spain could reposition to monetize ‘terra nullius (‘the lands of no one’)’ (Wynter, 2003: 291). Nordic and Asian disinterest in the sixteenth-century Pacific region signalled a sea change from the prior age, which had ‘divided the world into a western half for Spain and an eastern half for Portugal’ (Oliver, 1961: 85), and from 1529, when the Zaragoza Treaty made Tidore Spice Island ‘legally off limits to Spaniards’ (Flynn, 2001: xvi). European agitation may have resulted from being thrust into competition with Turkey, which had the advantage in ‘direct overland access to the silks and spices of the Far East’ (and no plans to share it with Europe) (Oliver, 1961: 84). Undeterred by the blockade and underfunding, Ferdinand Magellan had jumped loyalties from Portugal to Spain, at which point his exploration sought ‘a shorter western passage to the disputed Spice Islands [thus proving] that they belonged in Spain’s rather than in Portugal’s half of the world’ (Oliver, 1961: 87).

Ensuing liquidity events illuminate the intensity of the Spanish quest for leverage, qualifying even indefensible acts of fiduciary duty:

This means that the large-scale accumulation of unpaid land, unpaid labor, and overall wealth expropriated by Western Europe from non-European peoples, which was to lay the basis of its global expansion from the fifteenth century onwards, was carried out within the order of truth and the self-evident order of consciousness of a creed-specific conception of what it was to be human. (Wynter, 2003: 293)

In Yap, being Yapese means acting with restraint and caution. Impulsiveness is devalued; loud speech is too loud. The culture’s interpersonal demands of ‘the human’ privilege a civil outcome and therefore psychological demand. The collective effort associated with mining and stone hewing is an apt metaphor for the labour intensity of internal self-development. To corral and self-sacrifice, part of the traditional Micronesian ethos, was not a universal part of sixteenth-century life.

Along his way, for example, Magellan’s interaction with the Chamorros in 1521 led to Guam’s unfortunate infamy as Islas de Ladrones (Flynn, 2001: xv); the tale bears recounting. Upon his arrival with his crew, their island hosts, ‘in accordance with Micronesian culture’ of symbiotic barter economy, ‘began taking any item they desired from Magellan’s ship’ (Flynn, 2001: xv). Misinterpretation became immediately combative. Europe fired their arms on the Chamorros, who in turn relieved Magellan of a skiff. Magellan responded with the burning of a village and the kidnap of an islander. Epitomizing the age of planters, blackbirders and merchants (Oliver, 1961), we find fractious contact beginning to literally underwrite the ‘theological grounds of legitimacy’ King Ferdinand discursively imagined for Spain (Wynter, 2003: 293), part of Europe’s larger puzzle which would include English ‘wealthy but non-landed bourgeoisie’ and ‘the established ruling elite of the landed gentry elite’ (Wynter, 2003: 319).

As a static resource, the early Pacific island filled the cognitive gap between the Atlantic speculators (who rushed it like a hope magnet) and the breathless exceptionalism for which modernity would be known.

A successful ‘masterer of Natural Scarcity’ (Investor, or capital accumulator), what might be called the archipelago of its modes of Human Otherness can no longer be defined in terms of the interned Mad, the interned ‘Indian’, the enslaved ‘Negro’ in which it had been earlier defined. Instead the new descriptive statement of the human will call for its archipelago of Human Otherness to be peopled by a new category, one now comprised of the jobless, the homeless, the Poor, the systematically made jobless and criminalized—of the ‘underdeveloped’—all as the category of the economically damnés (Fanon, 1963), rather than, as before, of the politically condemned. (Wynter, 2003: 321)

Considering statistics by which the West categorizes places like Micronesia, recipient of United States Agency for International Development (USAID) and Australian Agency for International Development (AusAID), inflection points of renaissance, enlightenment and modernity prove inauspicious. ‘To us, at any rate, these are [still] islands of adventure and glamor, the delectable havens of escape, the scenes of fantastic and exotic beauty, and the seats of earthly paradise’ (Oliver, 1961: ix), writes the twentieth-century historian, leading the student of history to wonder if the island’s place in semiotics is by design. Even as it indicated the availability of a bright coin to others, the Pacific island served as complex referent: both ‘native token’ – like cryptocurrency (Catalini and Gans, 2017) – and land, once again begging the application of Sylvia Wynter’s (2003) ‘terms serving to validate the hegemony of the owners of landed rather than of moveable wealth, or capital’ (p. 322). Discursive celebration is the gambler’s tell. ‘Magellan and his European crewmates had just become the first Westerners to cross the Pacific Ocean’ (Flynn, 2001: xiiv), announces the successful solicitation of underwriting by Germany as well as Spain. Jacob Fugger, the banker in business with Magellan, hoped to recoup for Germany a loan of millions to the grandfather of Charles I (Flynn, 2001: xiiv). Theirs was an economic performance by distinct persons evoking the individuality inherent to ‘blockchain (the ledger that stores the history of every single transaction for every single bitcoin)’ (Harvey, 2014: 5). Furthermore, with personalized intentionality, Magellan’s banker sought ‘to replace existing financial market infrastructure’ (Walch, 2015: 843) with that of (his recorded labour on behalf of) Charles I.

The Micronesian connection to libertarian coders continued to solidify from 1932 to 1933 when the Bank of France feared that the United States would not hold the gold standard at the traditional price of US$20.67 per ounce of gold:

Accordingly, it asked the Federal Reserve Bank of New York to convert dollar assets that it had in the U.S. into gold. To avoid the necessity of shipping the gold across the ocean, it requested the Federal Reserve Bank simply to store the gold on the Bank of France’s account. In response, officials of the Federal Reserve Bank went to their gold vault, put in separate drawers the correct amount of gold ingots, and put a label or mark on those drawers indicating that they were the property of the French – for all it matters they could have done so by marking them ‘with a cross in black paint’ just at the Germans did to the stones. (Friedman, 1991: 3–4)

Friedman’s comparison refers to the Berzirks-Amt, the German district office (Gillilland, 1975: 18) responsible for unmarking rai leveraged for road repair work completed by Yapese islanders in 1898 (Friedman, 1991: 3). Recounting the transaction, Friedman quotes William Henry Furness III (1), who claims the Berzirks-Amt’s process consisted of ‘a cross in black paint to show the stones were claimed by the government’ (Friedman, 1991: 3). Following completion of the repair, ‘the government dispatched its agents and erased the crosses. Presto! the fine was paid’ p. (3). With this retelling, Friedman effectively predicted blockchains’ concept of ‘proof of work’.

The blockchain’s final ‘entrant’, Japan, sought to increase Yapese security and value under the Treaty of Versailles. Japanese civilian administration began under the League of Nations mandate (‘Timeline’). By 1938, when military preparations began, the Yapese were forced to work in labour gangs. Nickel mines opened in Gagil. Strip mining for bauxite and phosphate began on Yap and Fais ( ‘Timeline’). On the other side of World War II, Germany had gained Asian geopolitical alliance; Japan enjoyed decades of reparations and world attention, and Spain was US$4.2 million richer, having flipped the Carolines and the Marianas for 25 million pesetas (‘Government’).

The plenty to be found in Yap the territory, Yap the host, Yap the capital gain was fully realized by mid-nineteenth century, when it could be perceived that ‘commercial developments were precursors to political annexation[:] the progress from informal trading to more structured shipping, and on to large company dominance’ (Couper, 2009: 136). Obviously, demographic changes ensued. Yap’s Asian population grew ‘from 97 to 1933’ between 1920 and 1940. In 1944, the Allies bombed Colonia, aiming for nascent aircraft developments in Tomil (‘Timeline’). Rupture of the literal and social terrains of Yap first rumbled because Pope Leo XII quelled the bickering of nations with the caprice of a coin flip, in this case Yap Island, once targeted for Catholic conversion. To King Alfonso went possession; to Bismark, Yap’s ‘commercial rights’ ( ‘Timeline’). Europe gained leverage clinched by policies allowing ‘the Reich to establish coaling and trading stations in the Carolines’ (Ballendorf, 1994: 24).

Compared with industrialism at full throttle, the years between Spain’s possession of the Caroline Islands in 1659 and Spanish administrative instalment in 1866 seem hollow. From the long memory of Yapese governance, a reminder comes that ‘Spain did not do much activity in the islands until other competitive countries were found establishing themselves in the area for trade and religious purposes’ ( ‘Government’). P2P relay may not have transformed continental Oceania all at once (or Yap at all), yet Old World conceptions of money certainly did. Spain’s gamble in 1865 on the forexing of Yap buttressed the Spanish Crown after silver values had tanked, and the enslaved and colonized rebelled. Islanders, on the other hand, returned to bounties of communal land and sea – harvests of yams, sweet potatoes, the Tahitian chestnut and local fish (Alkire, 1972: 34). Yapese farm to table routines endure to this day free of colonists who, according to oral history, poured cement into their taro patches most likely during the era of ‘intensive gardening’ during the commencement of World War II (‘Timeline’). Slow foods accrue intellectual interest valued across wide time; stone monies do also with correction to underestimations of industry.

United nations of ethereality?

Traced backwards from black paint on rounded stone, the logical connection between rai and today’s alternative currencies really began to matter in 1865 when the Thirteenth Amendment outlawed outrageous analogy: African diasporans as transnational ‘gold standard’ to back USD, pesetas and Mexican dollars. These silver reales – circulating throughout Transatlantic colonies and among Europeans trading in Asia-Pacific (Moisés, 2005: 74) – signify actual, ubiquitous cultural capital but not bitcoin blueprint. Why not?

Anthropologists have discovered that with rai, money’s referent could be disappeared under an ocean without disrupting its signified possession. Economists have found explanation for money relieved of static definition, presence even, when banked in a drawer across the world. These nineteenth- and twentieth-century ontologies incubated how ‘money imagined by the cypherpunks looked to take the standardizing character of money to its logical extreme, allowing for a universal money that could be spent anywhere, unlike the constrained national currencies we currently carry around and exchange at each border’ (Popper, 2016: 16). Such ‘meshnet’ (Raval, 2016: 32) is an intellectual inheritance of the pursuits from earlier ages when intimately interconnected (Flynn, 2001) were Peruvian, Chilean, Central American, Mexican, Philippine and East Asian networks characterizing the ‘resurgence of Spanish activity in the Pacific’ during the eighteenth century. By the late twentieth century, rai had reached the end to the indignity of its homeland. By mid-twenty-first century, Satoshi Nakamoto and Martti Malmi manifested the ‘first successful decentralized store of wealth’ (Raval, 2016: 21). Its investors were held in thrall, by new year’s 2018, with a ‘mania… more important than wealth’ (Johnson, 2018: 1). In other words, Yap released from stone, a proprietary source code of indivisible invisibility.

So richly integrated were rai into the cultural ethos of Yap that even colonial attempts to stem ‘the quarrying of stones in 1899’ failed to clip economic production, whereby ‘one new stone was added to the Yapese money bank every 2.48 days for 86 years’ (Gillilland, 1975: 21). This was under the Germans, who exiled to Yap and Palau the guerilla Pohnpeians of 1910 (‘Timeline’). Yap and its Caroline counterparts changed hands (a third time again without, obviously, changing location) as ownership signified by contractual representation moved from Spain to Germany and eventually to Japan. What obviously, aside from the ethereality of having ‘had’ Yap, do these disparate entities share?

In this way, the blockchained islands resulted in actual ‘financial market infrastructures’ as defined by the Federal Reserve: ‘multilateral systems among participating financial institutions, including the system operator, used for the purposes of clearing, settling, or recording payments, securities, derivatives, or other financial transactions’ (Walch, 2015: 841 note 17). Home governments helped fund the new way of making money and managing finance but lacked oversight and found their purview displaced by an elite pragmatism. Established then, was the economic efficacy of a ‘peer-to-peer’ cooperative independently transacting with ‘an actual currency that displaced the fiat currencies issued by governments’ (Walch, 2015: 847). The colonial peers who literally and figuratively prospected Yap ultimately remitted the island as payment for additional goods and services:

As early adopters and investors experimented with the cryptocurrency in the hope that the network would increase in users, security and value, the underlying token appreciated, generating the positive feedback loop needed to attract subsequent batches of users. This organic diffusion process uses high-powered incentives similar to the venture capital model to reward early contributors for taking risks and dedicating their time, effort, and capital to a new platform. The same incentive system is now used by entrants to raise capital and lower switching costs for the user base and developer community of entrenched incumbents. This allows them to compete in a context where network effects are strongly in favor of established players. (Catalini and Gans, 2017: 2)

Established players from the Reich to the papacy trafficked in assumptions that ‘Islanders seem to cherish the sense of mystery that surrounds their culture and makes it impenetrable to western eyes’ (Hezel, 2013). Along the seam of a Pacific/Western dialectic, the colonial network extracted the worth of a people’s homeland out from under them – three times. Paradoxically, inverse tithe in the digital imagination is notably pluralistic: ‘The right to mint money is one of the defining powers of a nation, even one as small as the Vatican City or Micronesia’ (Popper, 2016: 15). And, e-money was initially valued for its incubational future(s): ‘Bitcoin is in an embryonic stage. It solves many problems that existing currencies face. While it is miniscule ‘today’, that does not mean it will be small in the future’ (Harvey, 2014: 6–7). What remains to be seen is whether renaissance is on the horizon for rai, which is beginning to enjoy global awareness of Pacific postcolonial relevance.