josh mandel, a trump disciple seeking the republican senate nomination in ohio, recently tweeted what he stands for: “ohio must be a pro-god, pro-family, pro-bitcoin state.” in fact, there has long been a strong connection between support for bitcoin and right-wing extremism, much like the traditional association between conservatism and an obsession with gold, only more so. so what is it about?
now the fact that many bitcoin enthusiasts say strange things does not, in itself, mean that cryptocurrencies are a bad idea. people can support the right things for the wrong reasons. I’m sure, for example, that many people accept the scientific consensus on, say, the efficacy of vaccines not because they value peer-reviewed research, but because they are impressed by people in lab coats using big words.
Reading: Crusading family bitcoin
Still, it seems important to understand the cultish aspects of the cryptocurrency movement.
First, though, a little (ahem) about the economy.
I still sometimes meet people who say that we live in a digital age, so we should use digital money. but we already do it! Like many people, I pay for most things by clicking my mouse, tapping my debit card, or pressing a button on my phone. I used to keep single bills in my wallet to buy fruits and vegetables at NYC’s ubiquitous sidewalk stalls, but these days even they accept venmo.
However, all these payments depend on trust in a third party: people accept debit cards, apple pay, venmo, etc. because they are linked to a bank account. The whole purpose of bitcoin, as stated in its original white paper from 2008, was to eliminate the need for that kind of trust: it would validate payments using methods related to cryptography – encrypted communication. the goal was to create a “peer-to-peer” payment system independent of financial institutions.
but why do this? Are banks so unreliable? I have been to many meetings where crypto skeptics ask, with the utmost respect, for simple examples of things you can do better or cheaper with cryptocurrencies than through other forms of payment. I haven’t yet heard of a clear example that doesn’t involve illegal activity, which, to be fair, may be easier to hide if you use crypto.
And the truth is, although bitcoin has been around for a long time by internet standards, 13 years! — it and other cryptocurrencies have barely ventured into the traditional role of money, as a medium of exchange used to buy goods and services. Hard numbers are scarce, but it appears that the vast majority of cryptocurrency transactions involve market speculation rather than the ordinary business of life. however, bitcoin and its rivals now have a combined market valuation of over $1 trillion. what do investors think they are buying?
One answer is protection against the perennial fear that governments will inflate all their wealth; As a recent Bloomberg article put it, some billionaires are buying cryptocurrencies in case the money “goes to hell.” in fact, there have been 57 hyperinflations in the world that we know of. however, they all occurred in the midst of political and social chaos; Do you really think that in such an environment you would be able to connect and collect your bitcoins?
There’s also fomo: the fear of missing out. bitcoin has hit something of a marketing sweet spot: it sounds high-tech and futuristic while also playing on political paranoia. The resulting capital gains have led many apolitical investors to feel they need to play the game, while also likely prompting public figures like eric adams, new york’s new mayor, to speak out about bitcoin because they imagine it makes them look progressive. . .
but do bitcoin’s fuzzy fundamentals mean it’s destined to implode? not necessarily. after all, gold ceased to function as a medium of exchange generations ago, but its value has not collapsed. and we must not dismiss the importance of illegal activity. There are about $1.6 trillion worth of $100 bills in circulation: 80% of all of the US. uu. currency, despite the fact that large bills are very difficult for ordinary consumers to spend. what do you think people are doing with all those benjamins?
but let’s put market predictions aside and ask what about the deepening alliance between bitcoin and maga.
I would say the answer is that bitcoin was supposed to create a monetary system that works without trust, and the modern right is all about fostering mistrust. covid is a hoax; the election was stolen; the california wildfires had nothing to do with climate change, they were started by rothschild controlled space lasers.
In this context, it is perfectly natural that Magaesque politicians demand the end of a monetary system that works through banks; We know who controls them, right? – and is based on a currency managed by appointed government officials. there is no evidence of widespread monetary abuse, but that doesn’t matter on the far right.
So the point is that while there are real economic problems associated with cryptocurrencies, their rise has a lot to do with the broader political madness that has American democracy teetering on the brink.