Donald Trump is an unlikely crypto ally. The power of bitcoin, embodied in Satoshi Nakamoto’s founding document, is that it frees participants from murky assessments of trust, instead relying on the bedrock of proof.
Bitcoin is truth. So it was cosmically weird last week to hear the attendees of the Bitcoin 2024 conference in Nashville enthusiastically hailing a former president who, by one painstakingly compiled count, lied 30,573 times in his single term in office. The believers of a mathematically indisputable blockchain poured on the hosannas as Donald Trump delivered a speech bulging with falsehoods, fabrications, and fantasies. They hooted with joy as he claimed credit for bitcoin’s meteoric rise in value during his administration—even as they surely knew that until recently he trashed the idea of cryptocurrency.
“Bitcoin, it sounds like a scam,” he said in 2021. “I don’t like it because it’s another currency competing against the dollar.” Now Trump is the sudden darling of the crypto world, even though no one believes that he has a clue about how tokens work, or even what they are. “Staple-coins … stablecoins,” Trump said at one point, correcting himself as he probably glanced at the teleprompter, then paused. “Do you know what a stablecoin is? Does anyone know?”
Clearly Trump doesn’t. That didn’t stop him from making promises that only someone who deeply misunderstood bitcoin both technically and philosophically would ever make. He compared bitcoin to the steel industry of a century ago, a mind-boggling mismatch between an icon of the industrial revolution and a cutting-edge movement of the digital world. Then he promised to make the United States the “crypto capital of the planet and the bitcoin superpower of the world.”
This sentiment, as the conference goers surely must know, flips the basic premise of cryptocurrency and blockchain—a sovereign system that operates without regard to the interests of any nation. To quote cryptocurrency theorist Erik Cason: “Bitcoin offers a radical new hope from which man may rescue himself from the cage that is every nation-state today.” Trump’s promise that the United States would dominate bitcoin is a slap in Satoshi’s face.
One of the proposals Trump floated is a bitcoin reserve where the US would stash and HODL billions of dollars’ worth of tokens, a scheme that experts consider of dubious value to taxpayers—but might jack up the value of the currency to the enrichment of the Nashville crowd. Again, manipulation by a government superpower is anathema to the values of the blockchain revolution. Another promise Trump made was to pardon Silk Road owner Ross Ulbricht, currently serving a life sentence in federal prison for running a massive crypto-fueled operation in illegal drugs and money laundering. So much for being tough on crime.
Despite the weirdness, the alliance between Trump and the bitcoin bros seems almost preordained. The crypto world chafes at government regulation, and it sees in Donald Trump an opportunity to lighten the touch of state, perhaps to the level of a friendly tickle. Trump has encouraged that thinking by meeting key funders and investors and adopting their views. As if cementing a barely disguised transaction, the players in the crypto world are funneling hundreds of millions of dollars into Trump’s campaign coffers. So it’s not surprising that Trump promised the Nashville conference that he would put an end to “left-wing fascists and totalitarians hell-bent on crushing crypto.” He was lustily cheered for the sentiment. Trump also indicated that Kamala Harris is among those “fascists.” “She’s against crypto by the way,” he said. “She’s against it very big.” (In fact, Harris has not set her policy and has been reaching out to crypto companies.) The cheers were loudest when Trump said he’d fire Gary Gensler, the chair of the Securities and Exchange Commission—which has been policing dicey crypto schemes—on his first day back in office.
Legitimate question: Does the current White House “hate crypto,” as the industry and Trump seem to believe? I poked around a bit and learned that in the early days of the administration, crypto policy—which, to be sure, was a relatively low priority during a pandemic—was indeed up for grabs, with some officials viewing it as a scammy technology. Ultimately, however, the administration set a course that tried to walk a line between encouraging innovation in the field and enforcing current securities law.
Biden’s 2022 “Executive Order on Ensuring Responsible Development of Digital Assets” laid out the blueprint: “a whole-of-government approach to addressing the risk and harnessing the potential benefits of digital assets and their underlying technology.” The order did include an element of nationalism, promising “to reinforce American leadership in the global financial system and the technological frontier,” but no plans to dominate the blockchain. There would be enforcement and investor protection, but also research into safe crypto protocols, and even efforts to reduce the impact on the climate. (In contrast, Trump promised the crypto crowd “so much electricity that you’ll be begging me, ‘Please, Mr. President no more electricity, we can’t stand it!’”)
The SEC under Gensler has been the enforcement arm of this policy, earning the enmity of the crypto world. The SEC notes that, by far, the most investor complaints to the agency in recent years have involved crypto schemes. Using a legal standard called the Howey Test, Gensler has determined that crypto tokens can be classified as securities, making them subject to regulations applying to “investment contracts.” (Bitcoin is one token that the SEC does not regulate—despite Trump’s claim that the agency is out to “obliterate” it. The reason is that bitcoin is not promoted by a single self-interested player.)
If you look at the actions the SEC has taken on crypto, they aren’t attacks on the foundations of the blockchain, but generally charges involving misleading promises and outright fraud. Admittedly, as a speech he gave in June 2023 shows, Gensler seems more enthusiastic about enforcement than harnessing crypto’s potential.
What would Trump do in terms of crypto regulation? After firing Gensler, he said, he would gather a group of “people who love crypto”—maybe even consisting of people in Nashville slurping up his speech—to cobble together some regulations that would please them, wrapping up the task in 100 days. In other words, they would set the rules by which they would be regulated. No mention of the public or possible investors being involved in the process: regulatory capture as a feature!
What the crypto crowd seems to miss is that the short-term gains from a hands-off regulatory approach will hurt their cause in the long run. Regulation, even under Gensler’s SEC, is not slowing the adoption of crypto and blockchain. Despite endless setbacks, these technologies are still viable. “Bitcoin is here to stay, so big a phenomenon that it can’t be ignored by politicians or governments,” says Pascal Gauthier, CEO of the crypto wallet company Ledger. “Nobody’s debating that, but debating how to regulate this or that.”
The biggest obstacle, however, is not regulation. What’s holding crypto back is the get-rich-quick vibe of greedy bros showing off their Bored Apes NFTs, and a seemingly endless cycle of rug-pulls and exit scams. Unbridled greed and the unbounded risk in the crypto world has hobbled progress and tainted the entire field. No role model has emerged in the crypto world as an example of how the movement could benefit ordinary people; instead the poster child is Samuel Bankman-Fried, who skirted laws to gain billions of dollars. “At the end of the day, it’s in the interest of industry to have a sound set of regulations that give Americans who are buying crypto confidence that they’re not going to be victims of the next SBF,” says Peter Harrell, who was a senior director for international economics and competitiveness for the first half of the Biden term.
Trump’s promised schemes might give an instant boost to those running or funding crypto companies, but they would thwart the stability that must be earned for the long term. So those newly minted Trumpists in Nashville might want to think twice before putting their trust in the man who graced their podium. “Crypto is doing the deal with the devil if they think that Trump is going to be a hands-off figure,” says Tim Wu, a law professor who was Biden’s special assistant for technology and competition. “I think those crypto bros who are bending the knee to Trump are insane, and betraying the whole emphasis of the product.” Somewhere, Satoshi weeps.
Time Travel
When I began covering the crypto world—largely for WIRED—in the ’90s, who knew that it would be a sizzling hot topic in 2024? I ignored warnings that crypto was an obscure subject and published my eponymous book about it in 2001. My subjects included the Cypherpunks, who posed for the cover of the second issue of WIRED in 1993 and later would turn out to be the most likely inspiration for Satoshi Nakamoto’s famous Bitcoin paper. (By the way, none of these pioneers talked about venture capital or giant valuations.) In the book I talk about how from the very first meeting in 1992, Cypherpunks saw crypto as a way to separate from the state.
It would be a mistake to misjudge this group by their peccadillos or by the modest turnout at this first meeting. In fact, they would wind up becoming so influential that their grandiose fantasies would be vindicated. Profane, cranky, and totally in tune with the digital hiphop of internet rhythm, they were cryptographers with an attitude. If the government hadn’t enough to worry about with industry, privacy advocates, and reform-minded policy wonks urging liberalization of cryptography, the emergence of crypto rebels as popular culture heroes was a tipping point, an unexpected sign that the code wars had gone someplace new. The code rebels had arrived, brandishing a powerful intellectual weapon: crypto anarchy.
For this first meeting [early Cypherpunk] Tim May had produced a 57-page handout, along with an elaborate agenda including discussion of “societal implications of cryptography,” “voting networks,” and “anonymous information markets.” There were reports on digital money in virtual realities and John Gilmore’s assessment of the NSA. And there was time set aside, of course, for the “reading of manifestos.” Tim May had one prepared especially for the meeting, which he called the Crypto Anarchist Manifesto. It ended on a stirring note:
“Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions Combined with emerging information markets, crypto anarchy will create a liquid market for any and all material which can be put in words and pictures.”
Ask Me One Thing
Teresa asks, “Why does it feel like internet search results have regressed to a pre-K level?”
Thanks, Teresa. You explained that you feel like the internet searches you made four years ago for a science project might not be as productive now, and that you don’t find much improvement using chatbots. And you suggested that you might need more training, even though you mention you’ve been searching the internet since the days of Gopher.
No, Teresa, the problem is not you. Almost everyone believes that search in 2024 has degraded from its past glory. Some think this is relatively recent; others say this process has been going on for at least a decade. Google disagrees and claims to have metrics proving otherwise. One recent study from German researchers, concentrating on product review sites, concludes that search has been degraded. A couple of years ago, former Google executive Marissa Mayer implicitly conceded that search was worse, but she blamed the web for the decline. It’s Google’s job, though, to make search maximally useful given the web as it is, so no excuses.
It’s hard to find numbers, but people who agree with you are already using alternatives to the search box. I look for information on local businesses not from search but maps. (Google has me anyway.) And to get certain complex information, I do use AI chatbots, which are most useful if they share the sources for their output so I can check whether the bot is making things up.
Still, when it comes to search, we can’t quit Google, even if we don’t think it’s doing as good a job as it once did. When a product dominates that much, the only way competitors can win is when the paradigm shifts, and a disruptive development redraws the field. That’s happening now with large language models, and that’s why Google is working so hard to integrate its AI into search.
You can submit questions to [email protected]. Write ASK LEVY in the subject line.
End Times Chronicle
The record heat was just warming us up for the wildfires. Be careful!
Last but Not Least
Kamala might not have wooed the crypto crowd. But she does have the Swifties.
The United Arab Emirates is hard at work on a scheme to generate more rainfall.
Here are some wild ideas to cut down on the plastic polluting the oceans.
The physics of Simone Biles. OK, it’s explainable, but Issac Newton would still be flummoxed by the Yurchenko Double Pike.
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