Vitaliks new article: Dont decide your political stance based on whether you support encryption

Original article by: Vitalik Buterin

Original translation: TechFlow

Over the past few years, the importance of cryptocurrency in political policy has been increasing, and various jurisdictions are considering different bills to regulate participants in blockchain activities. For example, the European Unions Markets in Crypto-Assets Regulation (MiCA) , the UKs regulatory efforts on stablecoins , and the US Securities and Exchange Commissions (SEC) complex legislative and enforcement attempts. In my opinion, most of these bills are reasonable, although there are concerns that governments will take extreme measures, such as considering almost all tokens as securities or banning self-hosted wallets . Due to these concerns, more and more cryptocurrency practitioners have begun to actively participate in politics and decide who to support almost entirely based on the attitude of political parties and candidates towards cryptocurrency.

In this article, I argue against this trend, specifically because I believe this approach to decision making carries a high risk of going against your original reasons and values for entering the cryptocurrency space.

(I’m pictured here with Vladimir Putin in 2018. At the time, many Russian government officials expressed a willingness to be open to “cryptocurrency.”)

“Cryptocurrency” is more than just cryptocurrency and blockchain

There is often a tendency in the cryptocurrency space to overemphasize the importance of “money”, and the freedom to hold and use money (or “tokens”), as the most important political issue. I agree that this is indeed a key battle: in modern society, everything important requires money, so if you can cut off anyone’s access to money, you can crush political opponents at will. The right to spend money privately, which Zooko has tirelessly advocated for , is equally important. The ability to issue tokens could significantly increase people’s ability to create digital organizations with collective economic power. However, the almost exclusive focus on cryptocurrencies and blockchains is difficult to defend, and importantly, this is not the idea that gave rise to cryptocurrencies in the first place.

Cryptocurrencies were originally created by the cypherpunk movement , a broader techno-libertarian ethos that advocated for the general protection and enhancement of individual freedoms through free and open technology. In the 2000s, the main theme was the fight against restrictive copyright legislation pushed by corporate lobbying groups such as the RIAA and the MPAA , which the internet called MAFIAA . One famous legal case that caused a lot of outrage was Capitol Records, Inc. v. Thomas-Rasset , in which the defendant was forced to pay $222,000 in damages for illegally downloading 24 songs through file-sharing networks. The main tools of the fight were torrent networks, encryption, and internet anonymization. One lesson learned early on was the importance of decentralization. As Satoshi explained in one of his few public political statements:

A detailed description of the systems vulnerability to the use of violent monopoly is omitted.

You wont find solutions to political problems in cryptography.

Yes, but we could win an important battle in the arms race and gain a new realm of freedom in a few years.

Governments are good at decapitating centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be able to stand on their own.

Bitcoin was seen as an extension of this ethos for internet payments. There were even early equivalents for “ regeneration culture ”: Bitcoin was a very simple method of online payment, and therefore could be used to organize ways of compensating artists for their work without having to rely on restrictive copyright laws. I myself have been involved in this kind of activity: in 2011, when I was writing for Bitcoin Weekly, I developed a mechanism where we would publish the first paragraph of two new articles I wrote and “ransom” the rest, releasing the content when the total amount of donations reached a certain specified amount of BTC.

Bitcoin was seen as a way to extend this ethos to internet payments. There was even something of a “ regeneration culture ” early on: Bitcoin, as an extremely convenient means of online payment, could be used to organize ways to compensate artists for their work without relying on strict copyright laws. I got involved myself: while writing for Bitcoin Weekly in 2011, I devised a mechanism where we would publish the first paragraph of two new articles I’d written, and then release the rest “ransom,” with the full content only being released when the total amount of donations to a public address reached a specified number of BTC.

All of this is to illustrate the mentality that created blockchain and cryptocurrencies in the first place: freedom is essential, decentralized networks are great at protecting freedom, and money is one important area where these networks can be applied, but it’s only one of many important areas. In fact, there are several important areas where decentralized networks don’t need to be applied at all: you just need cryptography and one-to-one communication applied correctly. The idea that freedom to pay is core to all other freedoms came later—an afterthought, a cynic might say, an ideology created to justify “numbers going up.”

I can think of at least a few other technological freedoms that are just as “fundamental” as the freedom to use crypto tokens:

• Freedom and privacy of communication: This includes encrypted messaging and pseudo-anonymity. Zero-knowledge proofs can not only protect pseudo-anonymity, but also ensure important authenticity claims (such as that the message was indeed sent by a real person), so applications that support zero-knowledge proofs are very important.

• Privacy-friendly digital identity freedom: While there are some applications for blockchain here, especially in allowing revocation and decentralized “proof of denial”, in reality hashing, signatures, and zero-knowledge proofs are used more frequently.

• Freedom and privacy of thought: This will become increasingly important in the coming decades as our activities are increasingly conducted in deeper ways through AI interactions. Without significant changes, our thoughts will increasingly be mediated and read directly by servers held by centralized AI companies.

• High-quality information acquisition: Social technologies can help people form high-quality opinions in adversarial environments. I’m personally bullish on prediction markets and community notes ; you may have a different solution, but the point is that this problem is important.

And that’s just the technical aspects of freedom. The goals that motivate people to build and participate in blockchain applications often have implications beyond the technology as well: if you care about freedom, you might want your government to respect your freedom to choose the type of home you want. If you care about building a more efficient and fair economy, you might care about the impact this has on housing . And so on.

My core point is this: if you are willing to read this article, you are involved in cryptocurrencies not just because it is cryptocurrencies, but because of deeper goals. Dont just support cryptocurrencies themselves, but support those deeper goals and the policy impact they bring.

Current “pro-crypto” initiatives, at least as of today, don’t think this way:

(“Key Acts” tracked by StandWithCrypto . No attempt is made to judge freedoms related to cryptography and technology beyond cryptocurrency.)

If a politician supports your freedom to trade tokens, but they don’t mention the above topic, then the thought process that led them to support the freedom to trade tokens is very different from mine (and likely yours). This means there’s a high risk that they may come to different conclusions than you on the issues you care about in the future.

Cryptocurrency and internationalism

(Ethereum node map, source ethernodes.org)

Internationalism has always been a social and political cause that I and many cypherpunks hold very dear. National egalitarian politics have a critical blind spot in this regard: they enact all sorts of restrictive economic policies to try to “protect workers” domestically, often ignoring that two-thirds of global inequality actually occurs between countries, not within them . A popular recent strategy for protecting domestic workers is to impose tariffs; but even when tariffs achieve their goal of protecting domestic workers, unfortunately, this is usually at the expense of workers in other countries. One of the key liberating features of the Internet is that, in theory, it does not discriminate between the richest and the poorest countries. Once most people have access to basic Internet access, we can have a more equal and global digital society. Cryptocurrency extends these ideals to the realm of money and economic interaction, which has the potential to significantly promote the development of a more balanced global economy, and I have personally witnessed many cases of this happening.

But if I care about “cryptocurrency” because it’s good for internationalism, then I should also judge politicians by how much they and their policies care about the outside world. I won’t give specific examples, but it’s clear that many fail on this criterion.

Sometimes, it’s even about “crypto.” When attending EthCC recently, I heard from multiple friends who told me they couldn’t come because Schengen visas had become harder to get. Visa availability is one of the key considerations when choosing a location for an event like Devcon ; and here too, the US doesn’t fare well. Crypto is uniquely international, so immigration law is, in a way, crypto law. So which politicians and countries are realizing this?

Being crypto-friendly now doesn’t mean it will be crypto-friendly five years from now

If you see a politician is friendly toward crypto, you can look up what they thought about crypto five years ago. Similarly, look up what they thought about related topics five years ago, like encrypted messaging. In particular, try to find a topic where pro-freedom doesnt align with pro-corporations; the copyright wars of the 2000s are a good example. This can help you predict how their opinions might change over the next five years.

Decentralization and acceleration: diverging goals

One situation where disagreements can arise is when the goals of decentralization and acceleration conflict. Last year, I conducted a series of polls asking people which they valued more in the context of AI. The results showed a clear preference for the former:

Regulation is generally bad for both decentralization and acceleration: it makes the industry more centralized and slows it down. Many of the most pernicious cryptocurrency regulations (e.g., “mandatory KYC for all transactions”) are certainly moving in this direction. However, these goals can sometimes diverge. For AI, this may already be happening. An AI strategy focused on decentralization focuses on small models running on consumer hardware, thereby avoiding a dystopia of privacy and centralized control, where all AI relies on centralized servers that can see everything we do and whose operators’ biases influence the AI’s output, leaving us with no escape. One advantage of the small model strategy is that it is better for AI safety, because small models are inherently more limited in their capabilities, more like tools than independent agents. Meanwhile, an AI strategy focused on acceleration is enthusiastic about everything from the smallest models running on tiny chips to Sam Altman’s dream $7 trillion clusters.

As far as I know, we haven’t seen such a big split in the crypto space yet, but it’s likely to happen in the future. If you meet a “pro-crypto” politician today, it’s worth exploring their underlying values and observing which side they would prioritize in the event of a conflict.

What “Crypto-Friendly” Means in the Eyes of Authoritarians

There is a “crypto-friendly” style common to authoritarian governments that is worth being wary of. The best example is modern Russia.

The recent Russian government policy on cryptocurrencies is quite simple and has two aspects:

• When we use cryptocurrencies, this helps us avoid other people’s restrictions, so that’s good.

• When you use cryptocurrency, it makes it harder for us to restrict or monitor you or put you in jail for 9 years because you donated $30 to Ukraine , so thats bad.

Here are examples of each type of Russian government action:

Another important conclusion is that if a politician today supports cryptocurrency, but they themselves are very power-seeking, or willing to curry favor with power-seekers, then ten years from now their cryptocurrency advocacy will likely move in that direction. This is almost a certainty if they or the people they curry favor with actually consolidate power. In addition, it is worth noting that the strategy of trying to get close to dangerous people to help them become better often backfires .

But I like a certain politician because of their overall platform and views, not just because they support crypto! So why shouldn’t I be enthusiastic about their crypto stance?

The game of politics is far more complex than “who wins the next election” and your words and actions can affect many aspects. In particular, when you publicly express support for a “pro-crypto” candidate simply because they support cryptocurrency, you are actually helping to create an incentive for politicians to think that simply supporting cryptocurrency will earn your support. Even if they also support banning encrypted messaging, even if they are power-seeking narcissists, or are pushing bills that make it harder for your Chinese or Indian friends to attend the next crypto conference — these politicians just need to ensure that you can easily trade crypto.

(“A Man Flipping Gold Coins in a Jail Cell”, generated using StableDiffusion 3 running locally)

Whether you’re someone preparing to donate millions of dollars, someone preparing to influence millions of Twitter followers, or just an average person, you can help create more honorable incentives.

If a politician supports cryptocurrencies, the key question is: are their motives in the right place? Do they have a vision for 21st century technology, politics, and economics that aligns with yours? Do they have a positive vision that goes beyond short-term gains (like “fighting the opposition”)? If they do, great: you should support them and make it clear that this is why you support them. If not, then you should either stay out of it completely or look for a more suitable ally.

This article is sourced from the internet: Vitaliks new article: Dont decide your political stance based on whether you support encryption

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