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The Left’s Bitcoin Dilemma

Politicians like Elizabeth Warren are pushing bitcoin policies that put the U.S.'s commitment to free speech at risk.

CoinDesk Insights
Jun 18, 2021 at 2:11 p.m. UTC
Updated Sep 14, 2021 at 1:13 p.m. UTC

It has often been said that the creation of Bitcoin was rooted in a libertarian or even anarcho-capitalistic ideology, and there are even some public comments from the peer-to-peer electronic cash system’s creator, Satoshi Nakamoto, to support this theory.

Many of the earliest bitcoin adopters and promoters were self-described libertarians who frequented the annual Porcupine Freedom Festival in New Hampshire, and these early supporters of the technology were largely motivated by the cypherpunk vision of changing the world through the development of new tools for humanity rather than going through the traditional political process.

If you accept the premise that there is a hardcore libertarian mindset behind the promotion of Bitcoin, then there are obvious reasons for those with left-leaning political beliefs to hate it.

Kyle Torpey is a freelance writer who focuses on Bitcoin.

A bitcoin standard, in which either government-issued currencies are pegged to the crypto asset or everyone is using bitcoin as a currency directly, would make it more difficult to have a large percentage of overall economic activity centralized in the hands of government officials because governments would be forced to tax or borrow to pay for their expenditures, rather than issuing new money and potentially diluting the value of the local fiat currency. Additionally, Bitcoin could make it easier for individuals to hide their savings from Big Brother in a situation where privacy, liquidity, and the circular economy around bitcoin are improved.

Obviously, such concealment would be a blow to the sorts of wealth redistribution programs that are popular on the left. At the same time, Bitcoin's environmental impact has been rising up the policy agenda, giving critics on the left additional ammunition to attack the cryptocurrency and its energy-intensive proof-of-work system.

That said, much of the climate change-focused hysteria around bitcoin mining has, at least up to this point, been based on bad science. In reality, there is an argument to be made that bitcoin mining may help improve the economics of renewable energy sources.

The perception that Bitcoin is an attack on liberal democracy as a whole has caused The Conscience of a Liberal author and Nobel prize-winning economist Paul Krugman to refer to the cryptocurrency network as everything from “libertarian derp” to downright “evil.” More recently, U.S. Senator Elizabeth Warren (D-MA) called for a crackdown on Bitcoin due to its perceived negative effects on the environment. Meanwhile, U.S. Congressman Brad Sherman (D-CA) and U.S. Senator Joe Manchin (D-WV) have called for outright bans on bitcoin.

Those in power always have an incentive to squash the minority opinion

Of course, the problem with banning bitcoin (outside of the fact that it was built for the specific purpose of avoiding government regulation) is that making a transaction on the Bitcoin network amounts to not much more than broadcasting a string of ones and zeroes over the internet or some other communication channel. Put differently, a ban on using the Bitcoin network necessitates restrictions on free speech. It is not dissimilar to the decades-old debate over the use of strong encryption by the general public, commonly referred to as the Crypto Wars.

So, the real question is: Are left-leaning politicians in the United States and elsewhere going to make an anti-free speech and, to put it bluntly, authoritarian argument to implement their desired Bitcoin policy? Should this policy also be extended to online communications more generally? Where are they going to draw the line? Are Democrats in the United States going to abandon one of the key principles upon which the country was founded?

To be clear, those in power always have an incentive to squash the minority opinion, and the free speech issue speaks to the authoritarian tendencies found on both sides of the aisle. For example, in the United States, both Democrat and Republican presidents have taken authoritarian stances on whistleblowers and political dissidents such as former NSA contractor Edward Snowden and WikiLeaks founder Julian Assange. However, those on the left seem more willing to sacrifice their values around free speech when it comes to Bitcoin specifically due to it being a financial phenomenon. Or maybe they just don’t understand the implications of their stances.

To be fair, there are some pro-Bitcoin Democrats out there, from Colorado Governor Jared Polis to President Biden's economic adviser Tim Wu. Additionally, Donald Trump is clearly not a fan of the cryptocurrency.

What many of the people who are uniting around politically motivated technologies like Bitcoin really seem to want more than anything else is less hypocrisy from those in power. It will be interesting to see how left-leaning politicians like Warren react when the free speech implications of their Bitcoin policies are put on full display. 

DISCLOSURE

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