Vitalik's new article: Don't blindly invest in those "crypto-friendly" politicians with impure motives

Original title: Against choosing your political allegiances based on who is "pro-crypto"

Original author: Vitalik Buterin

Original translation: TechFlow

In the past few years, the importance of "cryptocurrency" in political policy has increased, and various jurisdictions are considering different bills to regulate participants in blockchain activities. For example, the European Union's Markets in Crypto Assets Regulation (MiCA), the UK's regulatory efforts on stablecoins, and the U.S. Securities and Exchange Commission (SEC)'s complex legislative and enforcement attempts. In my opinion, most of these bills are reasonable, although there are concerns that the government will take extreme measures, such as treating almost all tokens as securities or banning self-custodial wallets. Due to these concerns, more and more cryptocurrency practitioners have begun to actively participate in politics and decide who to support almost entirely based on the attitudes of political parties and candidates towards "cryptocurrency".

In this post, I argue against this trend, especially because I think this approach to decision-making is highly risky and could go against your original intentions and values in entering the crypto space.

(I took a photo with Vladimir Putin in 2018. At the time, many Russian government officials expressed a willingness to be open to "cryptocurrency.")

"Cryptocurrency" is not just about cryptocurrencies and blockchain

In the crypto space, there is often a tendency to overemphasize the importance of "money" and the freedom to hold and use money (or "tokens") as the most important political issue. I agree that this is indeed a key battle: in modern society, everything that matters requires money, so if you can cut off anyone's source of funds, you can suppress political opponents at will. The right to spend money privately, which Zooko tirelessly advocates, is equally important. The ability to issue tokens has the power to significantly increase people’s ability to create digital organizations with collective economic power. However, an almost exclusive focus on cryptocurrencies and blockchains is difficult to defend, and importantly, it is not the idea that gave rise to cryptocurrencies in the first place.

The original creator of cryptocurrencies was the Cypherpunk movement, a broader techno-libertarian ethos that advocated for the general protection and enhancement of individual freedoms through free and open technology. In the 2000s, the main theme was the fight against restrictive copyright legislation pushed by corporate lobbying groups such as the RIAA and the MPAA, known to the internet as “MAFIAA.” One notable legal case that caused a lot of outrage was Capitol Records, Inc. v. Thomas-Rasset, where the defendant was forced to pay $222,000 in damages for illegally downloading 24 songs through a file-sharing network. The main tools of the fight were torrent networks, encryption, and internet anonymization. One lesson learned early on was the importance of decentralization. As Satoshi explained in one of his few public political statements:

 Detailed description of the system's vulnerability to monopoly using violence is omitted.

 You will not find solutions to political problems in cryptography.

 Yes, but we can win an important battle in the arms race and gain a new sphere of freedom in a few years.

 Governments are good at decapitating centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be able to stand on their own.

Bitcoin is seen as an extension of this spirit in the field of Internet payments. There are even early "regeneration culture" equivalents: Bitcoin is a very simple online payment method, and can therefore be used to organize ways to compensate artists for their work without relying on restrictive copyright laws. I myself have participated in this: in 2011, when I was writing for Bitcoin Weekly, I developed a mechanism where we would publish the first paragraph of two new articles I wrote and hold the rest "ransom", and the content would be released when the total amount of donations reached a specified number of BTC.

Bitcoin was seen as a way to extend this ethos to the world of internet payments. There was even something like "regeneration culture" in the early days: Bitcoin, as an extremely convenient means of online payment, could be used to organize ways to compensate artists for their work without relying on strict copyright laws. I myself have participated in this: in 2011, when I was writing for Bitcoin Weekly, I designed a mechanism where we would publish the first paragraph of two new articles I wrote and hold the rest "ransom", and the full content would be released when the total amount of donations from a public address reached a specified number of BTC.

All of this is to illustrate the mindset that created blockchain and cryptocurrencies in the first place: Freedom is essential, decentralized networks are great at protecting freedom, and money is one important area where these networks can be applied, but it’s only one of many important areas. In fact, there are several important areas where decentralized networks don’t need to be used at all: you just need cryptography and one-to-one communication applied correctly. The idea that freedom to pay is core to all other freedoms came later—an ideology that was created after the fact to justify “numbers going up,” a cynic might say.

I can think of at least a few other technical freedoms that are just as “foundational” as the freedom to use crypto tokens:

· Freedom and privacy of communication: This includes encrypted messaging and pseudo-anonymity. Zero-knowledge proofs can not only protect pseudo-anonymity, but also ensure important authenticity claims (such as that messages were indeed sent by real people), so applications that support zero-knowledge proofs are important.

· Privacy-friendly digital identity freedom:While there are some blockchain applications here, particularly in allowing revocation and decentralized “proof of denial,” in practice hashing, signatures, and zero-knowledge proofs are used more frequently.

· Freedom and privacy of thought:This will become increasingly important in the coming decades as our activities are increasingly conducted in deeper ways through AI interactions. Without major changes, our thoughts will increasingly be directly mediated and read by servers held by centralized AI companies.

· High-quality access to information:Social technologies can help people form high-quality opinions in adversarial environments. I’m personally bullish on prediction markets and community notes; you may have a different solution, but the point is that this problem is important.

The above is just the technical side of freedom. The goals that motivate people to build and participate in blockchain applications often have implications beyond the technology as well: if you care about freedom, you might want your government to respect your freedom to choose the type of home you want. If you care about building a more efficient and fair economy, you might care about the impact this has on housing. Etc.

My core point is this: If you’ve read this far, you’re in crypto not just because it’s crypto, but because of deeper goals. Don’t just support crypto for its own sake, but support those deeper goals and the policy implications they bring.

The current “support crypto” initiative, at least as of today, doesn’t think like this:

(“Key bills” tracked by StandWithCrypto. No attempt to judge crypto and technology-related freedoms beyond crypto.)

If a politician supports your freedom to trade tokens, but they don’t mention the above topics, then the thought process that led them to support the freedom to trade tokens is very different from mine (and possibly yours). Which means there’s a high risk that they may come to different conclusions than you do on the issues you care about in the future.

Cryptocurrency and Internationalism

(Ethereum node map, source ethernodes.org)

Internationalism has always been a social and political cause that I and many cypherpunks hold very dear. National egalitarian politics have a critical blind spot in this regard: they enact all sorts of restrictive economic policies to try to “protect workers” at home, often ignoring that two-thirds of global inequality actually occurs between countries, not within them. A popular recent strategy for protecting domestic workers is to impose tariffs; but even when tariffs achieve their goal of protecting domestic workers, unfortunately, this is usually at the expense of workers in other countries. One of the key liberating features of the Internet is that, in theory, it does not distinguish between the richest and the poorest countries. Once most people have access to basic Internet access, we can have a more equal and global digital society. Cryptocurrency extends these ideals to the realm of money and economic interactions, which has the potential to significantly improve the balance of the global economy, and I have personally witnessed many examples of this.

But if I care about “cryptocurrency” because it is good for internationalism, then I should also judge politicians and their policies by how much they care about the outside world. I won’t give specific examples, but it’s clear that many fail on this criterion.

Sometimes, this is even about “crypto.” While attending EthCC recently, I heard from multiple friends who told me they couldn’t come because Schengen visas had become harder to get. Visa availability is one of the key considerations when choosing a location for an event like Devcon; and the U.S. doesn’t fare well on that front either. Crypto is uniquely international, so immigration law is crypto law to some extent. So which politicians and countries are realizing this?

Crypto-friendly now doesn’t mean crypto-friendly five years from now

If you see a politician being crypto-friendly, look up what they thought about crypto five years ago. Similarly, look up what they thought about related topics five years ago, like crypto messaging. In particular, try to find a topic where “pro-freedom” doesn’t coincide with “pro-corporation”; the copyright wars of the 2000s are a good example. This can help you predict how their opinions might change over the next five years.

Decentralization vs. Acceleration: Divergence of Goals

One possible divergence is when the goals of decentralization and acceleration conflict. Last year, I conducted a series of polls asking people which they value more in the context of AI. The results showed a clear preference for the former:

Regulation is often bad for both decentralization and acceleration: it makes the industry more centralized and slows it down. Many of the most pernicious cryptocurrency regulations (e.g., mandatory KYC for all transactions) are certainly moving in this direction. However, these goals can sometimes diverge. For AI, this may already be happening. An AI strategy focused on decentralization focuses on small models running on consumer hardware, thereby avoiding a dystopia of privacy and centralized control, where all AI relies on centralized servers that can see everything we do and whose operators’ biases influence the AI’s output, leaving us with no escape. One advantage of a small-model strategy is that it is better for AI safety, because small models are inherently more limited in their capabilities, more like tools than independent agents. Meanwhile, an AI strategy focused on acceleration is enthusiastic about everything from the smallest models running on tiny chips to Sam Altman’s dream $7 trillion clusters.

As far as I know, we haven’t seen such a big split in the crypto space, but it’s likely to happen in the future. If you meet a “pro-crypto” politician today, it’s worth exploring their underlying values and observing which side they would prioritize in the event of a conflict.

What “crypto-friendly” means in the eyes of authoritarians

There is a “crypto-friendly” style that is common in authoritarian governments, which is worth being wary of. The best example is modern Russia.

The recent Russian government policy on cryptocurrencies is very simple and has two aspects:

1. When we use cryptocurrencies, this helps us avoid restrictions from others, so this is good.

2. When you use cryptocurrencies, this makes it harder for us to restrict or monitor you, or put you in jail for 9 years for donating $30 to Ukraine, so this is bad.

Here are examples of each type of action by the Russian government:

Another important conclusion is that if a politician today supports crypto, but they themselves are very power-seeking, or willing to curry favor with power-seekers, then ten years from now their crypto advocacy will likely move in that direction. This is almost a certainty if they or the people they curry favor with actually consolidate power. Also, it’s worth noting that the strategy of trying to get close to dangerous people to “help them become better” often backfires.

But I like a particular politician because of their overall platform and views, not just because they support crypto! So why shouldn’t I be enthusiastic about their crypto stance?

The game of politics is far more complex than “who wins the next election”, and your words and actions can affect many aspects. In particular, when you publicly support a “pro-crypto” candidate simply because they support cryptocurrencies, you are actually helping to create an incentive for politicians to think that simply supporting cryptocurrencies will earn your support.Even if they also support banning encrypted messaging, even if they are power-hungry narcissists, or pushing bills that make it harder for your Chinese or Indian friends to attend the next crypto conference - these politicians can just make sure you can easily trade cryptocurrencies.

(“A man flipping gold coins in a jail cell”, generated using StableDiffusion 3 running locally)

Whether you are someone ready to donate millions of dollars, someone ready to influence millions of Twitter followers, or just an average person, you can help create more honorable incentives.

If a politician supports cryptocurrencies, the key questions are: Are their motives in the right place? Do they have a vision for 21st century technology, politics, and economics that aligns with yours? Do they have a positive vision that goes beyond short-term gains (like “fighting the opposition”)? If so, great: you should support them, and make it clear that this is why you support them. If not, then you should either stay out of it completely or look for more suitable allies.

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