Ted Cruz, the Republican U.S. senator for Texas, said he wants the "Lone Star State" to become an "oasis on planet Earth for Bitcoin [BTC] and crypto." He said this while reiterating his previous support for the state's mining industry during a keynote speech at a Heritage Foundation event.
The Block reported that several speakers "sharply criticized the left side of the political aisle" at this "Bitcoin and the American Experiment" conference. Cruz singled out Massachusetts Senator Elizabeth Warren, a Democrat:
"Why does Bitcoin make Elizabeth Warren toss and turn and twitch at night? Because she wants her sticky little socialist fingers to control every penny in every one of our bank accounts."
Still, Bitcoin and the entire crypto industry could largely be described as an experiment with liberalism. That's the "lowercase L" variety, or the political philosophy that takes an expansive view of individual rights and equality.
Open-source and open-access blockchains allow anyone to participate in or use the monetary, governmental, and social instruments built upon them. Just as the U.S. Constitution codifies rules to promote "consent of the governed and equality before the law," the crypto economy uses code to enforce similar rights.
However, given the specifics of today, it increasingly seems that Bitcoin belongs to the right politically. That's why we keep seeing politicians like Cruz calling for "crypto havens" and Warren wanting to curb the industry.
It may seem detrimental for "the left" to take this position, considering that it shares the highest goals that the crypto industry is pursuing. Murtaza Hussain, a reporter for the left-leaning publication The Intercept, recently wrote about "Liz Warren's blind spot on Bitcoin," noting that cryptocurrencies could be a tool for financial inclusion to counter corporate power and mitigate government overreach.
"A future world with such currencies, where Bitcoin has been taken out of circulation by righteous progressives, will also be a world where mass surveillance and social control are possible on a scale never before seen in human history," Hussain said, adding that the industry should not be above criticism.
Crypto advocates often believe elected officials should help make this unique, emerging industry better for all - possibly through thoughtful regulation, supportive programs to expand blockchain use or education, and constructive dialogue with industry leaders - rather than trying to suppress it.
Part of a culture war
To some degree, this is already happening (and it often happens across party lines). However, I predict that as the industry grows and becomes more relevant to elections, partisan opinions about cryptocurrencies will likely solidify around the views of some influential political leaders. The "culture war" between Republicans and Democrats seems inevitable.
This is, of course, a travesty - as it always is when political trench warfare prevents the government from addressing issues that should be primarily about people (rather than elephants or donkeys, the symbols of the two major political parties in the U.S.). This is all the more galling because there are compelling arguments that Bitcoin, a non-state, private money, is above politics or even "apolitical."
But it's also a pragmatic view. In representative democracies like the U.S., citizens delegate responsibility for simple and difficult issues to elected officials who make the rules and hire enforcers (regulators). Cryptocurrencies are a particularly complex issue that many people are likely to feel disconnected from (a growing number hold these assets, but that is still a minority, and the technology is not yet widespread).
It is well known why the political left has concerns about cryptocurrencies. These are primarily the same "narratives" that play a role in the mainstream discourse about cryptocurrencies: the impact on the environment, consumer safety issues, and negative sentiment about tax avoidance, asset hoarding, and capitalism in general.
As mentioned earlier, there are many "progressive arguments" for cryptocurrencies, but it would be useful to briefly state why cryptocurrencies belong to the right. Both parties push universalist agendas at times - there is a populist argument for government healthcare, education, and environmental measures on both the right and the left.
Current and future implications
Cryptocurrencies could impact various state concerns over time, including healthcare, voting rights, and human rights, and could therefore be seen as another universalist project. But it's important to think about the things they are impacting now. That is, money.
There are several policy issues that affect money - and therefore cryptocurrencies - today. There's the question of what to do with billionaires, the question of how to raise taxes fairly, and the question of how best to regulate markets. The right and the left often diverge on these issues.
Cryptocurrencies as a financial technology offer individuals strong protection of their wealth in terms of how it can be spent, saved, and protected. If leftists sometimes question whether billionaires should exist, cryptocurrency offers a way to negate that question. How can you tax or confiscate wealth (ill-gotten gains or not) if you don't have the keys?
The right is also, by and large, more of a proponent of free markets. Cryptocurrencies, because of their censorship-resistant properties, can support the most open markets: All participants can engage in economic activity as they see fit. This can range from capital formation to building markets around social media.
Regulators such as the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), and the Securities and Exchange Commission (SEC) - many of which have roots in the progressive era of U.S. history - assume that unbridled capitalism causes social harm and must be monitored and restricted.
Many crypto projects originated with a founder who identified a market inefficiency - sometimes the result of government or corporate interference - and offered a token to expand trade and rebalance the scales. This method has not always been successful, as evidenced by the number of failed Initial Coin Offerings (ICOs).
Cryptocurrencies, like politics itself, are often forward-looking, as they represent a way to reach a radically different potential world. The solution crypto offers is to extend the authority of individuals over their economic activities (sometimes referred to in the industry as "sovereignty"), in the hope that the right combination of tools, money, and people can collectively act for the better by doing the right thing for themselves.
Progressives take a different approach. They are concerned with promoting and preserving individual rights, but the solutions they offer lie in a stronger, more sovereign state. This is evident when looking at the mandates offered that allow a well-resourced state to be the sole competitor in health care. Or enforcing rules that might make businesses less competitive to promote so-called environmental or social justice.
This distinction is often what observers call crypto-libertarians. This is not to say that cryptocurrencies can't be used for socialist goals, to use Cruz's specter. Or that crypto cannot or will not be reincorporated into the state, as we have seen. Crypto has become a source of tax revenue and is not always as "non-confiscable" as is sometimes claimed. This reality presents the industry with a difficult question: what is it all for?
Last week, Bitcoin philosopher, learned author, and Yale-NUS College associate professor Andrew M. Bailey wrote a Twitter post arguing that the widely held assumption that Bitcoin "grew out of right-wing or libertarian conspiracy theories" is incorrect. (Bailey, while ideological, is sincerely interested in ideas, loves debate, and his "Resistance Money" research/book project with a number of similarly honest, self-professed progressive Bitcoin supporters is revealing).
Indeed, cryptocurrency shares a history and agenda with the radical, privacy and civil liberties advocating cryptographers, the "cypherpunks." These men and women who did not conform to the norm were staunchly anti-authoritarian and "resisted institutional encroachment (by both corporations and the state)" by promoting the use of open-source and open-access technologies," Bailey argued.
No disagreement there. But although cypherpunks and crypto offer apolitical solutions to state or corporate domination of digital domains, politicians are increasingly interested in crypto. Lines are being drawn, even when they shouldn't be. And it is clear that partisans - whether they are informed about the history of cryptocurrencies or not - will consider cryptocurrencies as part of their agenda or not. Crypto and progressives have many common goals, but they differ radically in how they plan to achieve them.
It's fair to say that the industry, which is becoming increasingly politically engaged, has brought this on itself. To give Bailey the last word, perhaps the crypto industry should be a little less pragmatic and return to its intellectual roots.
"Digital authoritarianism - the use of computers for surveillance and control - is on the rise. You don't have to be right or left to see that," Bailey said.