Bitcoin, Blockchain and Prosumption

Bitcoin (and other cryptocurrencies) and its underlying blockchain system are prosumption systems. There are no producers or consumers associated with Bitcoin and blockchain. All of those involved both produce and consume; they are prosumers. One journalist makes this absolutely clear in the case of Bitcoin when he points out that those who use the system are “both customers and owners of both the banks and the mint” (italics added). While the “customers” in this context are, in the terms of this approach, prosumers-as-consumers, those associated with the banks and especially the mint (the “producers”) are prosumers-as-producers. Bitcoin (and blockchain) involve both the production (especially by “miners” in Bitcoin) and consumption of data by all “nodes” in the system.

While all involved in Bitcoin (and blockchain) are prosumers, some are at times more producers (prosumers-as-producers), although they must also of necessity consume information. Such prosumers (actually their nodes) function as miners whose computers and their software compete to order new and unordered transactions into a block. They must also create a hash for the block. This involves solving difficult computational problems. Miners (and others) also serve as prosumers-as-producers when they verify transactions (e.g., creation of a new block) undertaken by others. They thereby help to maintain and secure Bitcoin’s network.

While all of this is challenging for the miner, it is easy for others (really their computers) involved in the blockchain to check (to serve as prosumers-as-producers) to make sure that the requirements are met.

As in many other instances today, it is not prosumption that is new. What is new are the technologies (e.g. Bitcoin and blockchain) that make possible new forms of prosumption.

While Bitcoin may yet fail for myriad reasons (a bursting of the current economic bubble, theft of large numbers of bitcoins, loss of faith in digital currencies, etc.), it fits well with various developments in the social world. One is the increase in prosumption and the technologies that expedite, even require, it. Others include the increasing importance of consumption and the spread of consumer culture, globalization, and rationalization (McDonaldization). Blockchain has a similar fit with contemporary social changes, but it is more likely to succeed even if Bitcoin fails. Blockchains, both public and private, have many other uses.  For example, they can be used to track almost everything including voting; use of, and payment, for music and art; and locations of cargo containers