The Political Colonization of Crypto
I got into crypto a decade ago because it was apolitical. Alright. Now what?
Several years ago, I read a story about a Dutch lawyer who married into a Somali tribe.
In the preamble, the author noted that Somalia’s major quality-of-life indicators, while still low by the standards of developed countries, nevertheless went up when meddlers from Europe and the United Nations became less interested in installing a centralized government and western-style democracy.
Infant mortality. Maternal mortality. Vaccination rates. Access to sanitation and clean water. Technology penetration. Quality and cost of telecommunications services. All of these trended in the right directions when there was less central government, not more. Cases of low birth weight nearly disappeared.
This was because democracy and a centralized government were incompatible with Somali tribal life, since any “vote” would occur solely along tribal lines anyway. Instead, these tribes had built customary norms of governance and dispute resolution over countless generations, alongside a strong sense of personal accountability and property rights.
So, when a central power emerged that could legally use violence to enforce its will, generations worth of this Somali common law (the xeer) started to crumble. With the delicate inter-tribal relationships thus disrupted, tribes stepped all over each other to be most aligned with the new central government, since any aligned tribe could apply legalized force to the others.
I remain concerned that our own inter- and intra-tribal norms will similarly erode as our leading voices scramble to curry favor and legitimacy with powerful entities that nevertheless don’t share our core values.
As a result, an almost genetically inherited system of self-rule and established norms of tribal dispute resolution was jeopardized, surviving a little more in some places than others. Quality-of-life suffered.
To paraphrase the famous Ronald Reagan quip, it was a case of “I’m from the developed western world and I’m here to help.” When this colonial “help” turned out to be too much work, the meddlers would leave and the quality-of-life indicators would start trending positively again.
In this election cycle, politics have threatened to colonize the crypto ecosystem. Our own “xeer” is at risk. I remain concerned that our own inter- and intra-tribal norms will similarly erode as our leading voices scramble to curry favor and legitimacy with powerful entities that nevertheless don’t share our core values.
Seeking Centralization
What am I to make of the following, in no particular order:
As of June, the pro-crypto political war chest for this election reached $160 million.
Donald Trump, with characteristic incoherence and donor-acquisition-induced cynicism, assured the faithful that he was yuge into Bitcoin — orange-pilled even? — two Saturdays ago at the Bitcoin 2024 conference in Nashville.
Trump’s opponent, Kamala Harris, is now drawing some support from some crypto industry participants and has been warned that ignoring the industry could hurt her at the ballot box. (I’m sure there’s a Venn diagram for this.)
Blockworks opinion editor Molly Jane Zuckerman was widely and viciously excoriated a few months ago for the otherwise uncontroversial suggestion that single-issue voting (yes, even on the self-interested basis of a candidate’s crypto policy) was a bad idea.
Ethereum co-founder Vitalik Buterin later conveyed much of the same sentiment and at greater length, further Balkanizing the cryptosphere on this issue.
I can’t help but feel betrayed by many whom I’m expected to admire and, in the course of the day job, influence.
How did we allow ourselves to get to this point? Politics has colonized our ecosystem. Our tribes — comprising maximalists, moderates, degens, developers, observers, dilettantes, creators, founders, marketers, DAO participants, explorers — are now expected to care deeply about who will be the United States president, a role that was never meant to possess the vast power that it does. As presidential observer Gene Healy points out, the root of this exalted office’s title is “preside,” which is hardly the kind of active, muscular verb you’d ascribe to someone upon whom you’re supposed to hang all of your hopes, dreams, and balance sheets. Yet here we are.
Is that why I got into this? To join just another industry that is scrambling to get to 1600 Pennsylvania Avenue first and with absolutely the brownest nose? I can’t help but feel betrayed by many whom I’m expected to admire and, in the course of the day job, influence.
Satoshi Wept
I am among the last generation of Silicon Valley career-natives who felt that our industry, while not naive to the necessity, was largely above politics.
If, as our critics hope, crypto completely flames out, it won’t be because we backed the wrong political candidate. Instead, it will be because we overestimated how long we could get away with talking out of both sides of our mouths.
We generally believed that the bulk of such crass wheeling-dealing was the domain of our jealously monopoly-preserving Redmond neighbors to the north and Armonk neighbors to the east. Let creaky, lumbering behemoths like GM, United Airlines, and Bear Stearns loudly claim imminent penury for the umpteenth time, deploying slick K-Street types to beg the legislative elite for another bailout or set-aside. After all, when we failed, we did so quickly, dusted ourselves off, proudly told the war stories to the press and investors, and started over.
Fast-forward to today and the tech industry, broadly speaking, spends more on politics than ever. I am confident that 20th-century-esque bailouts for Big Tech will happen in my lifetime.
But that erosion of principle took several decades and started long before my career did. Sad that crypto — from its founding, a largely libertarian-minded technology movement that explicitly claims to find centralized power abhorrent — couldn’t last two decades. If, as our critics hope, crypto completely flames out, it won’t be because we backed the wrong political candidate. Instead, it will be because we overestimated how long we could get away with talking out of both sides of our mouths.
Preserving Crypto’s Xeer
With political colonization well underway, I wonder what will happen to our own customary norms and tribal dispute-mediation in a world where one group might have better access to traditional levers of power.
What will become of our “xeer?”
To see us move from a vibrant, dynamic ecosystem to Just Another Industry would be a failure of our community and our collective imagination.
Will we call on our government to, say, mediate the next “block-size debate” or similar event once “the blockchain” becomes “critical infrastructure?” If so, would it be decided on technical merits, community consensus, or merely who gave money to whom?
I’m certainly no rube. Our descent into electoral politics was inevitable. But the evaluation changes when you consider how our stated values are fundamentally different from other industries and even other areas of tech. To see us move from a vibrant, dynamic ecosystem to Just Another Industry would be a failure of our community and our collective imagination.
[Edit: Addition of Healy citation/attribution.]