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Does cryptocurrency have a future in the Catholic Church?

Some believe that the technology behind cryptocurrency has the potential to reshape not just the economy, but also the church.
In the Pews

Given its name, it seems only natural that cryptocurrency and the suite of other blockchain-based technologies associated with it would have an enduringly opaque, mysterious, and frequently shady reputation that stretches all the way back to its creation. In 2007, Satoshi Nakamoto—a pseudonym for a software engineer (or perhaps a group of engineers) who to this day remains unidentified—began work on Bitcoin, a digital currency built on a previously theorized but never-before-implemented decentralized database called the blockchain. In the decade and a half since, cryptocurrencies have exploded in popularity.

In its early days, many transactions using Bitcoin or the numerous other cryptocurrencies it spawned were centered around illicit, illegal, or otherwise questionable goods and activities, ranging from drugs to prostitution to weapons. Even as recently as 2018, a study conducted by the Review of Financial Studies found that as much as 46 percent of all Bitcoin transactions were associated with illegal activity. But today cryptocurrencies have also acquired a different but similarly shady connotation, becoming heavily associated with get-rich-quick speculation, massive boom-and-bust cycles, and outright fraud and Ponzi schemes.

Despite this, there are many who still see cryptocurrency and other blockchain technologies as vital innovations poised to reinvent and revitalize the structure of economies, societies, and—for some—even the church.

Matthew Pinto, the founder and former owner of Ascension Press, is one such person. In November 2022, he assembled the first Catholic/Crypto Conference, bringing together technologists, enthusiasts, and other interested Catholics for a dialogue on the ways the church might make use of and perhaps even be changed by this nascent technology.

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“There’s a lot of people who believe that [this technology] has the ability to touch all aspects of life, that this could really be important,” Pinto says of his reason for organizing the conference. “I don’t know what’s going to happen with it, but we want the church there.”

Brantly Millegan, one of the keynote speakers at the Catholic/Crypto Conference and a director of the Ethereum Name Service, which uses blockchain technology to secure users’ personal information for use across the internet, agrees that it is essential for Catholics to get involved in the crypto space.

“If [Catholics] want the new blockchain world to reflect Catholic values, now is the time to be involved, because people are setting up the technology now,” he says. “And the way things tend to go is once you set up a technology, or a protocol, it gets network effects, and then it gets hard to change over time.”

While Pinto and others are distinctly optimistic that the church’s crypto-future is bright and fruitful, others urge cautious discernment. Levi Checketts, a professor at Hong Kong Baptist University who specializes in the intersection of theology and technology, notes that “technologies change moral frameworks entirely by opening new moral possibilities and new moral obligations, and sometimes foreclosing other ones.”

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“The question is, how are these technologies changing what our moral options and requirements are?” he says. “Each technology creates its own constellation of moral variables.”

Cryptonomics

Cryptocurrencies have become a favorite asset for many speculators in part due to the volatility of their valuation. When Bitcoins first became available in 2009, they were generally valued at $0.0008. In 2021, that valuation reached an all-time high of $61,837 per coin. Since then, the value of a single Bitcoin has continued to fluctuate wildly, falling as low as $16,000 in late 2022 and rising to about $27,000 in May 2023. Much of this Bitcoin is held by only a few individuals: According to the Wall Street Journal, as of 2021, approximately 0.01 percent of all Bitcoin users hold 27 percent of the coins in circulation.

For Anthony Annett, an economist and author of the book Cathonomics (Georgetown University Press), this is a natural outcome of a neoliberal approach to economics that places profit ahead of the common good—an approach he says has led
to the massive rise in global wealth inequality.

“Neoliberalism basically says that the market leads to greater efficiency, greater productivity, greater wealth, and the government is only impeding that wealth creation and should get out of the way,” he says. “But even though we had a lot of economic growth over the past 40 years, that growth has only benefited the top echelons of society. It hasn’t benefited ordinary people. This is a major moral failure.”

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Is there a way to square the frequently speculative use of cryptocurrency with an economy oriented toward the common good? Pinto believes that cryptocurrency can provide access to key financial services such as long-distance money transfers to those who would otherwise be unable to access them without steep costs.

“There are about two and a half billion people who are unbanked in the world; they just need a smartphone and [using cryptocurrency] they can send money without paying Western Union transmission fees or losing two days of life to go from the village into the city,” he says. “There are serious social justice ramifications to this, and I actually think that this could be a great equalizer.”

Checketts notes, however, that cryptocurrency has also been used to prop up many exploitative business practices and industries in developing nations. Much of the work that pays in cryptocurrency and is available in poorer countries, he says, is in the form of data tagging—identifying and categorizing images and other content—through services such as Amazon’s Mechanical Turk (or MTurk) platform, which enables businesses to crowdsource tasks such as data tagging, transcription, and copyediting, usually paying little more than a few cents per task.

“It’s not just exploitative in terms of timing and the way people have to compete for jobs, but also they just have to sift through some of the nastiest stuff, because [the jobs involve] filtering content that is marked mature and such,” he says. “Then there are other types of work that are fairly exploitative such as cam girls. They can do this kind of work in [developing] countries and get paid through electronic means, but it’s very exploitative and very detrimental to not only their own well-being, but also to their families and society.”

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“It becomes this whole other structure of exploitation and neocolonialism,” he says. “I think the problem is that we’re trying to solve the question of poverty and poor distribution of resources by creating a technology that’s not inherently directed to that goal.”

More than money

For many, the real promise of blockchain technologies is not cryptocurrency itself, but its numerous other uses, primarily in the realms of ownership and privacy.

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Deacon Rich Napoli recently retired from his position as chief executive officer of Relevantz, a software engineering company that makes regular use of blockchain technology, after spending almost 45 years in the software business. For him, cryptocurrency is better understood as a proof-of-concept for other, more viable blockchain technologies. “I think it has real potential,” he says. “But cryptocurrency as it exists today? Not so much. I think it proved the capability, the technology, but it’s been abused, and it’s not necessarily useful in reality.”

One non-cryptocurrency blockchain technology that has been gaining increasing attention is non-fungible tokens, or NFTs. Unlike cryptocurrencies, each NFT is a verifiably unique entry on the blockchain, certifying ownership of a specific, one-of-a-kind item, digital or otherwise. Similar to cryptocurrency, however, the initial rise in the popularity of NFTs was also buoyed by speculation, this time in the form of a digital art market. Digital art that has been registered on the blockchain (or “minted as an NFT”) frequently fetches massive sums of money at auction. The most expensive recorded sale was of The Merge, a collection of digital images created by an artist known as Pak, which fetched a whopping $91.8 million.

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Some, like Checketts, see NFTs as a misguided attempt to bring properties of the real world into a digital space. “There’s an irony here, because I think one of the great advances and positive benefits of digital technology is the way that certain information is easily, nearly perfectly transcribed from one place to another,” he says.

“Walter Benjamin has this interesting essay on art and reproduction: He says the function of modern technology is about perfect reproduction and, because of this, it removes what he calls the aura of artwork,” Checketts says. “[NFTs] are, in a way, trying to bring that back, but the problem is that defeats the whole purpose of this kind of [digital technology].”

Napoli, however, believes that the blockchain has the potential to democratize the creative landscape and to empower both artists and fans, as it offers the opportunity to do away with gatekeeping institutions such as record labels. “With the blockchain, you don’t need an intermediate,” he says. “An artist can put their music on the blockchain and sell it directly to you and me without a middleman. They get the full value of the song, and we get to enjoy the song at probably a lower price than if we had to pay a record label.”

Tune.FM, a blockchain-based music streaming platform started in 2022, is one platform seeking to implement this vision. Every song hosted on the platform is minted as an NFT, and, according to a whitepaper issued by Tune.FM describing the platform, artists can supposedly earn 90 percent of the revenue generated by each stream.

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This kind of democratization and decentralization of the digital world is the driving force behind what has come to be known as Web3. According to Pinto, Web3 is the next logical step in the continuing evolution of the internet.

“Web1 is basically passive one-way communication. Say someone sells wicker chairs—he puts up a website and a phone number, and maybe a means by which people can order them,” he says. “Web2 enables two-way communication: It’s Twitter, it’s Facebook, you’re now communicating with the world, and the world is communicating back to you. Web3 enables you to own the assets you publish—they’re no longer owned by Facebook or another platform.”

Annett says, however, that this prioritization of decentralization is actually a misreading of the principle of subsidiarity. “I think subsidiarity is the most misunderstood and misinterpreted principle of Catholic social teaching,” he says. “Subsidiarity basically says, you want to do things at the lowest level possible, but the highest level necessary. It’s not an excuse for libertarianism, for hands-off government, or for free market ideology.”

Trustless societies

A key term that frequently resurfaces in conversations about blockchain technologies is that they are trustless. In other words, the problem they aim to solve is transferring value peer-to-peer without a trusted middleman. But what does it look like for a society—or even just an organization—to function without the need for trusted human relationships?

On one level, this emphasis on trustlessness is pragmatic: In a highly globalized society, many if not most of the relationships that keep society and the economy afloat are almost unavoidably built without the high level of interpersonal knowledge needed to make trust a reality. As polls continue to show trust in American institutions—governmental, religious, and otherwise—collapsing, perhaps removing trust from the equation altogether is a viable way forward.

Some corporations are already beginning to take advantage of this aspect of blockchain technology to solve large-scale coordination problems, such as those that affect supply chains. Take Walmart for example: The retail chain has already incorporated the blockchain into its produce supply chain, allowing for reliable, farm-to-table tracing of all of its products. “[Walmart] had a big issue five years ago with a farm selling tainted lettuce, and they couldn’t track down where it went,” Napoli says. “They had to pull every romaine lettuce off the shelf throughout the entire country.” But now, with the implementation of blockchain technology in their chain of custody, Walmart is capable of only pulling produce known to be tainted from stores, preventing massive amounts of food waste.

Pinto sees a number of parallel use-cases for the blockchain in the life of the church, including having a secure back-up of sacramental records (which, since they are stored on paper in parish files, are vulnerable to loss and damage) and keeping an immutable record of priest assignments in order to prevent the cover-up of abuse or other bad behavior. “For those concerned about past transgressions regarding reassigning clergy or religious who have engaged in bad actions, putting a record of clergy or religious assignments on a blockchain would show the sequence of locations where someone engaged in ministry,” he says.

Leaning heavily on this type of trustless organization may, however, have unintended consequences. Take Millegan’s case, for example. When one of his tweets from 2016 that condemned LGBTQ people, abortion, and numerous other issues resurfaced in 2022, he was quickly removed from many of the positions he held in the Ethereum Name Service except for his role as director of the Ethereum Name Service Foundation. This was possible thanks to the fact that the organization itself was governed through the blockchain as a decentralized autonomous organization, or DAO.

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DAOs take the emphasis on trustlessness to the organizational level: They are designed, at least in theory, to promote transparency and accountability by making use of predefined smart contracts, which automatically carry out organizational functions based on the votes of their members. Thanks to this structure, a vote of all the DAO’s members determined whether Millegan would remain in his role or be removed for propagating rhetoric viewed as hateful or discriminatory. Forty-three percent voted that he remain, while 37 percent voted that he be removed. Nineteen percent abstained.

There are those who maintain that DAOs can be a boon for organizing mass movements. In an interview with crypto-industry news source Cointelegraph, Rhodri Davies, head of the UK-based Charities Aid Foundation, said, “We have already seen a growing trend for such movements to take the form of loose networks rather than traditional centralized organizations (e.g. Black Lives Matter, #MeToo, the climate strikes). Often these movements face challenges in terms of maintaining focus and momentum, or carrying out practical action, and the additional structure provided by a DAO might enable them to overcome these challenges without having to adopt traditional approaches.”

Upon this blockchain

Although the institutional church has a reputation for, as the old adage goes, “thinking in centuries,” it has already begun to make a few small forays into making use of blockchain technology.

The Vatican itself has recently begun using NFT technology to track and archive its extensive collections of books, manuscripts, and artifacts in the Vatican Library. Partnering with NTT DATA, a Tokyo-based IT firm, the library will also begin providing NFTs of various items it holds to supporters, allowing them to own a part of their extensive archives, according to a February 2023 NTT DATA press release.

On the diocesan level, the Archdiocese of Washington announced in August 2022 that it would begin accepting charitable donations in cryptocurrency, a first for any diocese. “An important aspect of fostering the culture of philanthropy is to take the mystery out of many ways the faithful can support the church—in short, make supporting the good works of the church as easy as possible and meeting supporters where they are in terms of a preferred method of giving,” says Joseph Gilmer, executive director of development for the archdiocese. “Crypto now stands alongside other giving options such as stocks and bonds, mutual funds, direct transfers from traditional IRAs, and donor-advised funds that may appeal to some donors and possibly enable them to be even more generous for their favorite charitable program or ministry.”

While these are certainly not enormous, world-changing initiatives, they do point to the institutional church’s openness to embrace these new technologies, potentially paving the way for greater uses in the future. Though Napoli notes that this kind of slow, careful exploration of new technologies may be at times frustrating, he also sees it as the prudent way forward for the church.

“As a business leader, I’m used to doing everything really quickly, but the church, in its wisdom, is not fast to adopt things in general,” he says. “There is this notion that it’s better to be safe and slow than fast and realize that you did something wrong, something that looked like it was consistent with the faith but turns out not to be.”

While the institutional church takes its time, however, Pinto and others are keeping busy organizing laypeople to discuss further use cases of blockchain technology in the life of the church. As of May, recordings of the 2022 Catholic/Crypto Conference session have begun to be released on YouTube, and according to Pinto there are plans underway for a second conference in April 2024. In addition, a whitepaper based on the first conference’s proceeds is due to be released in the summer of 2023, detailing further proposed use cases for blockchain technology in the church, including maintaining Catholics’ sacramental records more securely and accessibly as well as tracking the chain of custody and authenticity of relics.

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But even as this work continues and blockchain technology gradually makes its way into the life of the church, the question remains as to whether this—or any—technology will be the solution to what ails the church and the world.

“It’s not a question of creating new philosopher’s stones or new magic technologies that will [solve our problems],” says Checketts. “It’s a question of putting our own selfish motivations behind us.”


This article also appears in the July 2023 issue of U.S. Catholic (Vol. 88, No. 7, pages 20-25). Click here to subscribe to the magazine.

Image: Pexels/Alesia Kozik

About the author

Nathaniel Hunter

Nathaniel Hunter is an associate editor at U.S. Catholic.

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