In times of crisis, people look to their government – or, at least, they want to.
They may not have actual faith in the state’s capacity against a pandemic. But many of us want to believe there's someone with a higher plan.
Coronavirus is a test of our faith and trust in government. Can we rely on our leaders in an hour of need to make the right calls and procure the necessary ventilators and PPE? Or, are we better off building a bunker in the yard with a 10-year supply of ravioli?
People in crypto are known for their libertarian, anti-state bent. The stereotypical bitcoiner got in out of disdain for state power. Even if many in the blockchain industry don't fit the stereotype, it's probably true that the community tends self-reliant and self-executing. Generation Crypto is all about e-empowerment: the ability to control and manage one’s life via code and a screen.
But even crypto looks to government in a crisis like the one we're now experiencing. According to a new CoinDesk reader survey, strong majorities are in favor of unusual government measures like enforcing social distancing, stopping travel and telling corporations what to manufacture.
“People want to believe the people in charge know what the fuck they’re doing. And because crypto people are so cynical, they assume they can’t trust the government. But they still want it to be competent,” said Maya Zehavi, founder of an un-launched crypto startup and the Israeli Blockchain Industry Forum, said in a phone call.
As the COVID-19 outbreak takes hold, governments are re-asserting themselves in the chaos and confusion, sometimes helping, sometimes making things worse. Decisions to lock down cities, flood the economy with cheap money and clear the streets of people not observing distancing rules are all being taken by governments, not individuals.
CoinDesk asked readers to get hard data about how the crypto community – if that is a sensible term – feels about these measures.
In an informal survey, we aimed to test the association between holding crypto, political affiliation and readers' approval of how governments are handling the novel coronavirus pandemic.
So how are governments handling this? The overwhelming answer: not well, though not for the obvious reasons that a type-casted bunch of libertarian tech bros would lead you to believe. These advocates for decentralization want a stronger governmental response, financial support for the vulnerable and clampdowns on travel.
A note about the survey
With a limited sample size of approximately 575 respondents who discovered the survey primarily on social media or in CoinDesk’s newsletters, our findings should not be taken as conclusive. The survey ran from March 25 to April 1.
Respondents were self-selecting and not asked to reveal biographical information – such as age, sex or residence. Instead, CoinDesk opted to test the temperature of the “generation crypto,” seen as a global movement fastened by a belief that decentralization is the future.
The survey may capture a percentage of general interest readers and crypto stakeholders, though “there's likely a small but vibrant contingent of people into crypto who simply don't follow ‘the news,’” Quinn DuPont, assistant professor in the School of Business at University College Dublin, said in an email.
From this modest sample size, it’s clear the early libertarian or anti-statist mentality of crypto has shifted. According to the survey, there are nearly as many self-identified social democrats (16.4 percent) as libertarians (17.5 percent). In aggregate, right-leaning dispositions eked out a majority of those surveyed at 41 percent, ahead of 35 percent of respondents with left-leaning political persuasions.
This follows CoinDesk research from July 2018, showing an influx of new users during the 2017-18 initial coin offering bubble led to a “large social transformation” in crypto. “[R]ather than crypto changing them, they changed crypto,” DuPont said. “The punk ethos of early Bitcoiners has largely been replaced with a much more commercial ideology.”
With this in mind, it’s not surprising that a vast plurality of respondents see government intervention during the crisis as a necessity. Seventy-one percent of respondents agree or strongly agree that national governments should command factories to begin producing essential goods during the COVID-19 outbreak.
This would include, theoretically, measures such as enacting the Defence Production Act, an order that empowers the U.S. executive branch to direct manufacturers to produce equipment like face masks and ventilators.
Vinay Gupta, CEO of Mattereum, sees this as flying in the face of traditional libertarian sensibilities, which would prefer to see production ramp up in response to a natural increase in demand.
Similarly, nearly 80 percent of respondents agree or strongly agree that social distancing, or measures taken to restrict when and where people can gather, should be put in place. Seen from the opposite direction, 73 percent believe people shouldn't be allowed to travel freely during an infectious outbreak.
In ordinary times, this would be a gross encroachment on civil liberties. However, “in many ways, in times of war, in deep crisis, politics stops,” Carsten Sorensen, associate professor of Information Systems and Innovation at Aalborg University, Denmark, said in a phone call. “Many of these self-assigned political distinctions may fail to account for basic human response.”
That isn’t to say crypto is abandoning its principles. “You can argue sensibly that people who believe in crypto are people that strongly believe in collective action. They just believe in a different practical application than a state-based model,” Sorensen said. Open source and public cryptography are “deeply democratic ideas,” he said, after viewing the data.
Nouriel "Dr. Doom" Roubini, professor of economics at New York University's Stern School of Business and frequent crypto critic, vehemently disagrees. "[Crypto advocates are] total hypocrites pretending to want a decentralized anarchic libertarian world where there is no government, no Fed but only private [unflattering euphemism for alt coins]," he said in an email.
"But now that 3,000 [tokens with dubious propositions] have fallen down by 99 percent they expect a welfare check from the government," he said.
While an overwhelming majority of respondents call for government assistance paid to individuals and businesses, more than 50 percent think their government has already failed to appropriately respond to the dual economic and health threats of COVID-19.
This may be rooted in the sense that some governments have prioritized the economy over human life, which 68 percent of respondents think is the wrong approach.
Complications out of convenience
Sorensen broke the data into convenience charts, which show tendencies within a political grouping, over and above what could be expected based on a random distribution. He found that “decentralized ideologies,” understood as libertarians, anarcho-capitalists and political nihilists, and “centralized ideologies,” which includes liberals, conservatives and centrists, tend to disagree.
Questioned whether governments should prioritize the economy when developing a COVID-19 response, “Decentralists strongly agree and are neutral,” while “centralists strongly disagree.” This is also the case in approval of more local responses to the crisis, where decentralists strongly disapprove, while centralists strongly approve.
“Covid is essentially a test in governance and trust,” Zehavi said. “The government's response in some ways is a lot more centralized than I think the crypto community would be happy to have.”
READ MORE: CoinDesk's Post Trust Election Package
“There’s something very contrarian to what’s happening as part of the COVID response and what crypto has been advocating for,” she said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.