BITCOIN IS NOT ANTI-LEFTIST. BITCOIN IS APOLITICAL | by heidi

 

Riding on Canada’s “Freedom Convoy” protests, Republican Senator Ted Cruz triumphantly took to the stage to embrace Bitcoin in a recent, highly publicized CPAC event. In a typically pro-Republican tirade, Cruz blasted his political opponents from Justin Trudeau and Elizabeth Warren to the Chinese Communist Party for opposing Bitcoin because of a desire to control the financial freedom and civil liberties of people.

Of course, the Canadian trucker story played conveniently to Cruz’s right-wing leanings. The Freedom Convoy protests united around a common opposition to the Liberal Trudeau government’s vaccine mandates. It was also heavily associated with right-wing political figures such as Tamara Lich, a member of the far-right Maverick Party. The political pressure proved too much for many, even leading private crowdsourcing platform GoFundMe to cancel a fundraiser after it raised over $10 million for the truckers.

BITCOIN IS APOLITICAL

The only problem with Cruz’s anti-leftist spin on Bitcoin is that it is dressed in pure, partisan malarkey. Bitcoin does not care about your politics. It is not against the progressive left, or the conservative right or the political center. Bitcoin is apolitical and bipartisan. Its decentralized nature means that no one entity can alter its network unless it gains broad consensus. If Bitcoin is for anyone, it is for the individual.

As Jonathan Bier masterfully chronicles in “The Blocksize Wars,” countless failed attempts over the years have been made by Bitcoin activists and organized groups to unilaterally modify Bitcoin’s underlying code to incorporate larger node sizes. To highlight just one example out of many, the proposal to pass “Bitcoin Classic” in 2016 and increase Bitcoin block sizes from 1 MB to 2 MB (thereby allowing faster transaction processing) failed to gain adoption, despite it having support by big institutional players at that time, such as Brian Armstrong of Coinbase, Jihan Wu of Bitmain, Roger Ver of Bitcoin.com and prominent Bitcoin developers like Gavin Andresen.

Contrast that to projects on smart contract–enabled blockchains like Ethereum or Binance Smart Chain that are steered by large foundations and visible figureheads. When the U.S. Securities and Exchange Commission (SEC)’s regulatory spotlight shone on the largest decentralized exchange Uniswap in 2021 amid the decentralized finance boom, its head foundation Uniswap Labs quickly moved to delist dozens of synthetic derivative tokens that paralleled blue-chip stocks like Apple, Alibaba and Amazon, citing reasons of an “evolving regulatory landscape” (read: We don’t want to piss off Big Brother).

But Cruz’s attempt to apply a politically partisan spin on Bitcoin is not only philosophically incoherent, it is also detached from evidence of its current usage. Consider just the past few years in Bitcoin history.

When the Black Lives Matter (BLM) movement erupted in 2013, some protesters seized on Bitcoin to advertise it as a financial tool of freedom. BLM activists developed art projects on the blockchain to raise awareness for victims of racial killings and police reform. The work of various authors and annual events like the Black Blockchain Summit are but a few examples of progressive efforts to spread awareness on the potentials of Bitcoin to empower black and minority communities, in ways where the incumbent financial system has excluded them.

When far-right protestors of the infamous "Unite the Right" white supremacist rally were universally blacklisted by credit card platforms and major payment platforms including Visa, Patreon, PayPal, Apple Pay and more, its proponents, too, turned to cryptocurrencies, raising 15 bitcoin in donations (valued at $60,000 in 2017, when the rally happened).

How about rogue regimes like North Korea and Iran? Cut off from the global financial system, these rogue states have both used Bitcoin to alleviate the economic impact of crippling sanctions. It was estimated that North Korea has stolen a total of $395 million worth of cryptocurrencies, some of which has gone toward funding its nuclear weaponry. A 2021 Elliptic report found that Iran generates close to $1 billion annually in bitcoin mining, allowing it some economic relief from the punitive sanctions and embargo by the U.S. on its regime.

Like most of his ilk in Washington, Cruz is adept at playing the populist game. But suffice to say, his insatiable need to strike the iron of political opportunism while it's hot would not permit him to pitch his political tent as far as white supremacists, or the BLM movement or North Korea — all of whom he has condemned publicly on record. Yet, all of these groups have used Bitcoin in some way or another for their own ends.

The oldest Bitcoin veterans know the digital asset to be apolitical. It’s what largely attracted them to it in the first place. Born out of the Global Financial Crisis of 2008, the same year Bitcoin’s pseudonymous author Satoshi Nakamoto penned its white paper, Bitcoin’s philosophy is steeped in its radical neutrality because it simply cannot be centrally controlled.

Couching Bitcoin in partisan right-wing political rhetoric, as Cruz does, is as absurd as saying that the First Amendment is anti-left because it allows right-wingers to verbally thrash their opponents. It is also particularly disingenuous. Cruz himself is one of the lead cheerleaders in the anti-Big Tech crusade, loudly championing the need to bring Facebook, Twitter and Google under the regulatory gamut of the federal government.

Bitcoin is not “good” because it improves the economic freedom of persecuted minorities (though it is thoroughly welcome). Nor is it “bad” because bad actors appropriate it for mischief. It is simply a neutral, permissionless financial network that anyone is welcome to use. It is voluntary money. People use it not because they were forced to, but because they choose to. Or as one writer puts it: “Bitcoin is digital no-fucks-given.”

EXCHANGE-TRADED FUNDS MAY ADD POLITICIZATION TO BITCOIN

There is perhaps one aspect that Bitcoin can be somewhat politicized. As Bitcoin gains mainstream adoption, financial institutions are creating tradable financial products such as exchange-traded funds (ETFs) that are pegged to the value of bitcoin. To the extent that these institutions are regulated by politically captured financial regulators (spoiler alert: they are), and consumers choose to purchase these products, Bitcoin will be caught up in the venomous tide of partisan political culture.

Yet, there are good reasons to be optimistic. For one, its base underlying asset, unlike fiat, is still one that cannot be arbitrarily manipulated. Second, these products are relatively attractive because setting up a digital wallet to store bitcoin is still unfamiliar to the average person. As Bitcoin becomes more popular, consumers will opt to buy bitcoin directly, as opposed to a derivative of bitcoin. Finally, purchasing bitcoin directly on an exchange is not inconvenient or expensive, as opposed to buying physical gold that requires vault storage.

Yet, Cruz is not the only politician that has tried to appropriate Bitcoin to service their partisan ends. The loudest anti-cryptocurrency politicians in Washington like Elizabeth Warren run into the same contradictions, only in reverse. By fixating solely on how Bitcoin is harnessed by bad actors, she overlooks its potential for economic liberation of people of color who have been historically marginalized.

As Bitcoin becomes a household name, partisan players will increasingly try to leverage it for their political purposes. But students of the cryptocurrency’s history and design will know otherwise.