By Arthur Hayes
Editor | Wu said blockchain This article uses GPT to assist in translation. There may be some errors
Original link:
https://cryptohayes.substack.com/p/hot-chick
Last summer, I traveled to Ibiza, the mecca of electronic music. It was a special trip for me and three friends. The organizer of the trip was a friend of mine from university who has lived in London since graduation. He loves summers in Europe and planned an unforgettable trip.
On our first night, my friend got us invited to a private party at a villa on the island. Imagine taking the Chiltern guests and moving them to the Balearics. Two of my friends lived in London and knew the people at the party, while my former flatmate in Hong Kong and I knew no one. So the two of us went to the bar and started partying.
A few hours later, we were in a hot, crowded room where Carlita was DJing. As we were grooving to the music, Leonardo Dicaprio came in, accompanied by a long-legged beauty. We witnessed a very hilarious incident in which Dicaprio's girlfriend was trying to sell him on why he should take her home. We heard snippets of their conversation, which was very interesting. I don't know if she was ultimately successful in convincing Dicaprio to take her home, but she certainly tried her best.
This story is about cryptocurrencies because the would-be emperor of the United States, Donald Trump, has suddenly taken an interest in cryptocurrencies. In key swing states like Michigan, Pennsylvania, and Florida, a few thousand votes will decide the outcome of the US presidential election. Appealing to the young, politically active, and newly wealthy crypto crowd could win Trump the election. So Trump is raising his profile in the crypto space by saying all the right things. For example, he announced that he would pardon Ross Ulbricht, the former head of the Silk Road trading platform. Ross is currently serving a life sentence for running an online marketplace that primarily used Bitcoin for payments.
Unfortunately, this newfound political attention has made many in our industry complacent. Political beauties are trying to take us home, not the other way around. These feelings are misplaced. The people of crypto are not movie stars, but little people standing on the fringes of the party.
I am disappointed that many cryptocurrency commentators who should know better are now blindly raising money for the Trump campaign. They mistakenly believe that Trump is sincere and that if they donate enough money, the anti-crypto movement will go away. This is simply bullshit. Trump is a savvy politician. He will say anything to anyone just to get re-elected. Once in office, anything crypto-related will become a distant memory.
How can pro-crypto voters in the U.S. take advantage of the need to swing votes in both the Democratic and Republican parties? Is there a way to turn the roughly 50 million U.S. adults who hold crypto into a single-issue voter bloc? Is there a strategy that doesn’t require campaign contributions but can ensure that pro-crypto legislation is passed before the election? Absolutely. But it won’t be easy.
Before I present my strategic vision, I would like to ask readers to analyze the prophetic speech of Malcolm X. I will use this speech as a counterpoint to illustrate how oppressed American cryptocurrency holders and voters can achieve their goals in a divisive political environment.
After we hear from Brother Malcolm, I want to discuss a simple piece of legislation that crypto voters should demand their chosen political representatives pass into law before Election Day. It is frustrating that so many efforts are made to support pro-crypto politicians who do little more than build regulatory barriers for Coinbase and Blackrock. If voters are going to be pro-crypto voters, the legislation they nominally pass should truly benefit the industry as a whole and bring crypto jobs and opportunities to Pax Americana. Corporate graft should not be on the menu.
Finally, I’ll dive into the numbers and show how single-issue pro-crypto voters could mathematically determine which party controls the House, the Senate, and most importantly, the presidency.
Before I get into that, I want to explain why separating money from the state should be at the top of any voter’s agenda, regardless of other pressing issues that dictate the vote. When the state and its governing bodies must regularly tax citizens, they will be extra careful about what they ask for, lest they be driven out of office. Many state-related problems stem from an overactive government using inflationary taxes to do more than necessary. For example, current levels of global military spending, especially military spending that leads to conflict, cannot be sustained if governments pay for it through direct taxation. What do you want: free health care or more AK-47s? Free college education or a fleet of F-16s? Affordable public transportation or another submarine with nuclear missiles? If it were up to the taxpayers to decide, different types of public goods would be produced, improving the quality of life for many people.
I will refer to Biden as the presumptive nominee of the Democratic Party. However, I do not think he will end up being the party's presidential nominee, especially after his disastrous debate performance. Biden will flop, but for simplicity's sake, I will assume he is the nominee.
Ballot or Bullet
Let's go back to the 1960s in America. Black people were becoming restless and demanding political change. One leader pushing for change was Malcolm X. He gave a speech on April 3, 1964 in Cleveland, Ohio titled "The Ballot or the Bullet." The theme was how the black community could use their power as a voting bloc to decide the next president and what they should get in return for their loyalty. Incumbent President Lyndon Johnson (Democrat) was running against Barry Goldwater (Republican). Johnson won reelection.
I’m going to excerpt a few passages that are relevant to this discussion. For the record, I do not agree with everything Malcolm X said or did. Nonetheless, his observations are astute and relevant to a politically oppressed minority (cryptocurrency holders) who want to gain political benefits in a simple majority rule system.
Malcolm begins by explaining why black people should put aside their differences and unite to achieve political goals that benefit everyone:
"Even though I am still a Muslim, I am not here tonight to discuss my religion. I am not here to try to convert you to your religion. I am not here to argue or discuss our differences because we should realize right now that it is best to first see that we have the same problems, common issues. One issue that will give you hell whether you are a Baptist, a Methodist, a Muslim or a nationalist. Whether you are educated or illiterate, whether you live on the avenue or in the alley, you will suffer the same way I did. We are all in the same boat and we will all suffer the same hell from the same man. He happens to be white. We have all suffered political oppression, economic exploitation and social degradation from white people in this country."
In the crypto space, it doesn’t matter if you’re a Bitcoin, Ethereum, Solana enthusiast. In fact, screw you if you own Cardano ;). Most importantly, whether you’re a centralized exchange shareholder like Coinbase or a regular holder, there’s no need to dwell on these differences. The government, aka “the people”, is hostile to anyone who subscribes to Satoshi’s teachings.
What are the similarities between the 1964 and 2024 elections?
"Nineteen sixty-four may go down as the most explosive year in American history. The most explosive year. Why? It is also a political year. It is a year when all the white politicians will go back to the so-called black communities and defraud you and me of votes. All the white political con men will go back to your communities and me and disappoint us with their false promises, with their tricks and betrayals, with their false promises that they have no intention of keeping."
2024 is an important election year for Pax Americana. Pax Americana is at a crossroads. Should it accept a multipolar world order, or stand firm and fight challengers economically and militarily? The next president will have a major say in how the United States responds to this changing world order. With a few thousand votes in several key states set to decide the election, Trump and the Republicans are making friendly remarks about crypto. I, like Malcolm in 1964, doubt Trump's sincerity. He cares about getting elected, and will say whatever is necessary to win your vote. If Biden and the Democrats are pro-crypto, Trump is anti-crypto. It's just good politics.
Malcolm goes on to discuss why and how disenfranchised minorities have tremendous political power.
"These 22 million victims are awakening. Their eyes are opening. They are beginning to see things they could only see before. They are maturing politically. They are realizing there are new political trends from coast to coast. When they see these new political trends, they see that every election is so close that they have to do a recount. In Massachusetts, they had to do a recount to decide who would be governor, it was so close. Same thing in Rhode Island, Minnesota, and many other places across the country. Same thing with Kennedy and Nixon when they ran for president. It was so close, they had to do a recount. So, what does this mean? It means that when white people are even, and black people have the power of their vote, they decide who will sit in the White House and who will go to the dog house (or jail if you are Trump or his supporters)."
According to Coinbase, 50 million Americans (20% of the population) own cryptocurrencies. If this group voted together, they could easily decide which Joker takes the throne. The country’s equal split between Democrats and Republicans presents a unique opportunity to extract major political concessions. It’s important to realize that prioritizing political party affiliation over Satoshi Nakamoto is a recipe for failure.
Malcolm went on to criticize the tokenism. We should heed this warning. Crypto holders in the United States should not settle for some inconsequential Biden or Trump administration post. The only acceptable thing is pro-crypto legislation signed into law.
"They get all the black votes and the black people get nothing. All they do when they get to Washington is give big jobs to a few big black people. These big black people don't need big jobs, they already have jobs. It's a disguise, it's a trick, it's a betrayal, it's window dressing."
I strongly encourage readers to read the speech in its entirety. Just keep in mind the racial, economic, and political context in which Malcolm X spoke. I use his black-versus-white rhetoric as a counterpoint to the tens of millions of American cryptocurrency holders who can extract favorable policies from their government if they so choose, since politicians’ primary goal is to get re-elected.
For those who think that immediate substantive progress is too difficult or will take too long, remember that American politicians are currently continuing to fund the moral manipulation of Israel’s war against Hamas. The world is watching in real time as bomber Bibi “Bedouin Butcher” Netanyahu is carrying out a genocidal campaign against defenseless Palestinian civilians, as he wishes to eradicate the ideology of Hamas and the thousands of its fighters who are sworn enemies of the State of Israel. Regardless of their personal views, no American politician is willing to stand up for human life if it means angering the powerful Israel lobby, which, with its vast financial resources, can run a series of negative ads that reduce the politician’s chances of reelection. The primary goal of any politician is to get re-elected, and this self-preservation drive is even more pronounced in the imperial capital, where long-term service as a congressman or senator brings enormous wealth.
Consider House Representative Nancy Pelosi. I learned the following via ChatGPT, which accessed the official public disclosures of her net worth. In 1987, when she joined Congress, Pelosi disclosed an estimated net worth of $3.64 million. By 2023, her disclosed net worth capped at an estimated $97.7 million, an almost 27-fold increase. ChatGPT estimates that she earned $5.7 million in salary as a member of Congress during her 37-year tenure. Much of her wealth is attributed to her savvy investments in the stock and real estate markets. Given that elected members of the House and Senate are allowed to engage in insider trading, it’s no wonder she’s a better trader than Steven Cohen.
Pelosi is the living embodiment of the American political dream in office. She has built generational wealth as a public servant. Is it any wonder that politicians will say anything to please you in order to stay in office?
Malcolm X mentioned the power of cryptocurrency holders as a political minority in a divisive electoral environment, so what should we be fighting for?
What is money?
Money can be dirty fiat, heavy gold, or glorious Bitcoin, but what is its essence? The purpose of money is to transfer energy through time and space through physical or digital forms of communication. Lynn Alden’s ledger theory is a good way to think about the nature of money.
Understanding blockchain from first principles makes the concept come alive. A blockchain is simply a series of cryptographic hashes and messages linked together in sequence in a publicly readable ledger. With Bitcoin, we can read and write to this public ledger. Bitcoin is a digital language.
Here’s another example that explains this concept in a way that many readers will be very familiar with. TikTok, Instagram, Facebook, etc. are all services that allow you to read and write to a centralized database containing your messages and those of other users. These messages come in the form of videos or text content. These platforms support digital language.
In most liberal democratic societies, governments consider information posted and consumed on social media platforms to be protected speech. Therefore, users are free to express their ideas without government interference. Furthermore, the companies that provide these services are not responsible for what is said on the platforms.
Take Facebook during the 2016 US presidential election. Democrats claimed that Putin used Facebook to influence people to vote for Trump, who they viewed as a petty tyrant. It followed that Facebook had enabled treasonous behavior and that its CEO should be held criminally liable for foreign actions on its platform. However, this did not happen; thanks to free speech laws, Facebook and its executives faced no repercussions.
If the internet and the information therein are protected speech, why are Bitcoin and any other blockchain-powered cryptocurrency or token treated differently? Both use speech to provide services. The fact that Bitcoin is a monetary instrument does not make it unprotected by the Constitution.
This is an interpretation of a document written over two hundred years ago when steam engines were still a new technology. Yet in the United States, the Constitution is analyzed in this way. The Second Amendment says you have the right to bear arms. In the 18th century, the most advanced weapon was a flintlock. In modern times, the gun lobby and many Supreme Court decisions in the United States have interpreted this to mean you have the right to bear arms. Absurdity is the name of the game in the land of the free.
Let me offer a simple statement to realign cryptocurrency policy to comply with free speech:
“Cryptocurrencies and tokens residing on or powered by blockchain are protected forms of speech. All laws that apply to free speech protections apply equally to cryptocurrency users or intermediaries. Any laws or regulations that restrict the ability of a person or legal entity to hold or transfer cryptocurrency do not apply.”
That’s all we need for complete clarity on the regulatory status of cryptocurrencies. Let’s dive into what the practical impact would be if such a law were passed.
Clarity of Cryptocurrency
If this simple bill becomes law, it will have a profound impact on how various regulatory agencies treat cryptocurrencies. Questions will arise endlessly about whether a particular alphabet agency has jurisdiction over crypto-related conduct. The only way the boundaries can be clarified is by establishing legal precedent through adversarial public court cases. That’s the way it should be. Laws passed by elected representatives will be adjudicated by appointed judges who will decide the extent of the free speech enjoyed by cryptocurrencies.
But in the process, Pax Americana will become the most lucrative place to conduct “crypto” activity. Conducting crypto activity could mean opening your own exchange, creating a new decentralized finance protocol, building decentralized infrastructure, or raising funds for investment or trading. This means permissionless innovation. It is this kind of innovation that Pax Americana diehards miss. Did John D. Rockefeller, Andrew Carnegie, or Henry Ford beg and plead with government officials to revolutionize the oil, steel, or automobile industries? Of course not, they just kept their heads down and built entire industries and industrial processes that put agrarian America on the path to becoming an empire.
For the politicians who voted to make it happen, it means they can claim to have created high-paying jobs. It means they can use their privileged positions on small committees to buy shares in publicly traded cryptocurrency exchanges and miners before anyone else, thus filling their own pockets like Representative Pelosi did. If they want to engage in insider trading, at least they can do it while the cryptocurrency business is exploding.
Sounds like good days for crypto holders and politicians alike. Will anyone be unhappy with these developments?
The Naysayers — Traditional Finance Is Terrible
The traditional financial community will be unhappy if crypto is considered protected speech, but fiat currency is not. Their lobbyists will fiercely oppose any such crypto free speech legislation. So I invite them to join us.
The vast swathes of financial regulations enacted over the decades were not designed to protect consumers; they were designed to politically absolve bureaucrats of responsibility for the various bailouts that were continually given to the financial sector. After each outbreak, politicians needed to appear to be taking action and imposed more meaningless rules and regulations on traditional financial institutions.
Fiat currencies, such as dollar bills, and commodity currencies, such as gold, should also be considered speech and thus protected. As mentioned before, these are all forms of money that transfer energy across time and space. There should be an equal and fair playing field between all forms of money.
Let's modify the proposed bill slightly:
“Money in any form, including government-issued currency, precious metals such as gold and silver, and cryptocurrencies and tokens residing on or powered by blockchains, are protected forms of speech. All laws that apply to free speech protections apply equally to cryptocurrency users or intermediaries. Any laws or regulations that restrict the ability of a person or legal entity to hold or transfer cryptocurrency do not apply.”
There is a problem. Since most financial regulators will be ineffective, fractional reserve banking and other highly leveraged traditional financial intermediaries may engage in risky activities. To reduce costs to the public, all financial government bailout programs should be eliminated.
Let's amend the bill again:
“Money in any form, including government-issued currency, precious metals such as gold and silver, and cryptocurrencies and tokens residing on or powered by blockchains, are protected forms of speech. All laws that apply to free speech protections apply equally to cryptocurrency users or intermediaries. Any laws or regulations that restrict the ability of a person or legal entity to hold or transfer cryptocurrency do not apply.”
No public funds may be used to bail out any financial institution in any form. No public financial institution, such as [full list of all relevant entities], may receive any assistance from the federal government.”
The government should not guarantee any bank deposit amount. Instead, it should require banks to put fiat currencies on a public blockchain to enable tripartite accounting. If all fiat currencies circulate on a public encrypted ledger, potential depositors can verify the health of any financial institution in real time.
The central bank and any other public financial institutions (such as residential mortgage policy banks, such as Fannie Mae, Ginnie Mae, and Freddie Mac) must not receive any funding from the central government if they fail. The central bank can print money at will, but if its losses wipe out all equity capital, the central bank will fail. This will erode public trust in fiat currency, but the purpose is to ensure that all financial institutions, whether public or private, have a sense of "skin in the game" and cannot use public funds in times of trouble.
The Naysayers — — Crypto’s Crony Capitalism
Another objection came from within. Many U.S. companies and individuals with significant private cryptocurrency business interests would love to use this opportunity to push legislation that would create a regulatory moat for their operations. If these "pacifiers" are found to be involved in such dealings, their clients should publicly denounce them. Any cryptocurrency business that exploits the political process to enrich individuals individually at the expense of collective financial freedom should not be supported.
Are there any rules?
Of course there is. If you steal or commit fraud, you are breaking the law. If you post false statements on the internet with the intent to deceive for personal gain, you will be punished. The same applies to cryptocurrency. This industry does not need any new laws to punish behavior that is already illegal.
Action
The best time to get concrete results is before the November election. My proposed bill is only 113 words long and is short for a specific reason. It is easy to understand; anyone can read it in minutes. This means that every elected representative can digest the bill immediately and it is less likely to be manipulated by aides who serve as mouthpieces for highly paid lobbyists.
The bill needs sponsors in Congress and the Senate to bring it to their respective chambers for discussion and, ultimately, a vote. The crypto lobby could pick on several politicians involved in tight reelections. The message is: support this bill, and the crypto voters in your district will support you.
Once the bill is in place, it’s time to pressure Democrats and Republicans to support it. The same applies to the carrot and stick policy: support the bill, and the crypto voters in your district will vote for you; if you don’t, they’ll vote for your opponent.
Finally, even if "Slow Old Joe" passes the bill in the House and Senate, he must sign it into law. American voters do not have to stay in the same party for their votes for Congress, Senators, and President. Therefore, voters can vote in their district for a Republican Congressman or Senator who supports the bill and choose Biden for President, even if Biden is a Democrat.
This is more effective than expecting Trump to keep his promises on various pro-crypto policy proposals, since this bill could become law in a matter of weeks. Look at how quickly lawmakers acted when they approved more weapons for Ukraine and Israel. When they are driven by their own interests, namely their defense industry stock portfolios, things happen fast like magic.
After the election, voters who support cryptocurrencies will lose all their influence. The next election is still two years away, and the main focus is on members of Congress who are elected for two-year terms. Biden or Trump will not be as politically vocal in supporting crypto policies as they were before, because it does not directly affect their re-election chances or the interests of the majority of elected officials in their respective parties.
Remember, the drumbeat for war will intensify after the election. The reason the U.S. and NATO haven’t yet targeted Iran and Russia more directly is because Biden doesn’t want oil prices to rise before Election Day. Trump assassinated Qassem Soleimani, a leading general in Iran’s Revolutionary Guards, during his first term. He has no qualms about bombing Israel at its request. All of this is to say that once the bombs start flying, questions about the freedom of cryptocurrencies will quickly be forgotten.
Electoral Math
It’s a nice dream, but what are the chances of this possibility becoming a reality? Using ChatGPT, I created a model analyzing how single-issue pro-cryptocurrency voters decide congressional, senate, and presidential elections.
Assumptions:
The biggest assumption is that every one of the 50 million adults who own crypto are already registered voters and are single-issue pro-crypto voters.
Among voters who own cryptocurrency, the split is 50/50 between Democrats and Republicans.
The voter turnout in 2024 was 69.40%, matching the voter turnout in 2020. I chose 2020 because it was the last presidential election year.
Since Coinbase does not provide specific cryptocurrency holder data for each state, I prorated voters by state to correspond to the number of registered voters in the 2020 presidential election.
Finally, I assume that in previous elections, voters voted along party lines. This means that I only care about voters who voted across party lines in the 2024 election. For example, if a Democrat beat a Republican by 1,000 votes in the 2022 congressional elections, then in order to flip the election in 2024, I only care about registered Democratic voters who own cryptocurrency voting for Republicans.
Strategy
The Democrats control the presidency and the Senate. Clearly, they want to do everything they can to keep the presidency, which gives them broad control over the various agencies of the U.S. government. The message to party leadership is simple: pass this pro-crypto legislation, or the pro-crypto lobby will give the Republicans control of all three branches of government. The pro-crypto lobby can hand all three branches of government to the Democrats if they are willing to cooperate.
Because Democrats do not control the House, they must threaten several at-risk Republican members to ensure they vote across party lines for the bill or face expulsion.
Is it mathematically possible? Yes, let's look at the numbers.
Congressional elections
ChatGPT provides me with the election results for every congressional district in 2022. I count the number of votes for the winner and runner-up in each district, as well as their political party.
There are 48 seats held by Republicans, and if every Republican cryptocurrency holder voted across party lines in the elections in those districts, control of the House could be flipped to the Democrats.
Senate elections
Senators serve six-year terms, which is longer than the terms of members of Congress. Therefore, I asked ChatGPT to provide the results of the 2018 Senate elections. This year, some of those who were elected in 2018 will be up for re-election.
There are nine seats held by Republicans, and if every Republican cryptocurrency holder voted across party lines in the elections in those districts, it could expand the Democrats’ current majority in the Senate.
Presidential campaign
ChatGPT provided data based on the results of each state in 2020. Each state has a certain number of electoral votes, and a presidential candidate needs to obtain 270 electoral votes to win the election.
If every Republican cryptocurrency holder in a few specific states supports across party lines, it could provide the Democratic candidate with 115 electoral votes. This would ensure Biden’s victory.
If you are interested in my models and supporting data, please contact me; I will be happy to provide them.
hard work
The hard work is not raising money from wealthy American crypto holders. Not a single cent should be donated to any political campaign. The hard work is convincing the vast majority of crypto holders to become single-issue voters and to go to the polls. This is exactly what the millions of dollars raised by various pro-crypto lobbying groups should be used for.
If Brian Armstrong is really serious about supporting pro-crypto legislation, as his political activity is often portrayed, then he should collect digital signatures of support for the proposed legislation from Coinbase’s US users. That way, politicians know that cryptocurrency holders are serious about wanting to affect change in an organized way.
What I’m describing is not the easy thing, and more importantly, it’s not about the amount of campaign contributions. It’s about incentivizing crypto holders to hold their elected representatives accountable for delivering meaningful change. Doing the hard thing means that any politician who hopes to get into the bureaucracy in Washington, D.C., should not be antagonistic to crypto, knowing that the crypto community will make their voices heard with their votes.
Nonpartisan
Some readers may view this article as an attempt to poison the minds of pro-crypto Trump supporters under a thin veil. I am neither a member of any political party nor do I care who wins the US presidential election. The ruling party has the means and motivation to do whatever is necessary to stay in power, especially if the ruling party ever does something questionable to prevent the opposition from taking over. This is why it is more effective to work with the Democrats. If the situation were reversed, I would advocate supporting the Republicans. The point is that in a highly bipartisan system, taking sides is detrimental to achieving single-issue policy goals.
Imitators
If crypto voters in the United States could pass a simple yet far-reaching pro-crypto legislation, it would gain widespread attention and, as a result, activate crypto holders in other jurisdictions where small, vocal, and dedicated minority voter blocs can achieve legislative outcomes.
Look at how quickly the Hong Kong and London stock exchanges launched or planned to launch Bitcoin spot traded funds (ETFs) after the U.S. did. National competition is our friend. If there is a serious effort to use this unique moment in history to push the U.S. to pass a transformative, simple yet effective pro-crypto legislation, then non-Americans should help the cause.
Helping the cause means shaming proposed legislation that smacks of crony capitalism for cryptocurrencies. Helping the cause means analyzing and providing feedback on serious proposals. Helping the cause means demanding that those who claim to defend cryptocurrencies in American politics not accept empty platitudes from politicians seeking reelection, but demand that they take concrete action now, lest they lose votes before the election. Finally, helping the cause means organizing similar efforts in your country, if your country is a representative democracy characterized by a high degree of bipartisanship, where no single party has an overwhelming majority.
Thoughts are crucial
Over a year ago, I wrote an article about creating a synthetic dollar using long Bitcoin and short perpetual swaps. Ethena took that article as inspiration, added their own spin, and built the fastest growing stablecoin. They did the hard work; it wasn’t easy. They were so successful that my inbox was filled with promises from founders about the next “Ethena killer.”
I don’t think the ideas raised in this article are truly original. However, I hope that by putting this article forward, it will be read by many in the industry and inspire motivated and savvy political operators to act now. Do not let this opportunity go to waste. Because if they do, the hotties at the party will go find someone else. And on November 6th, the believers will have their backs against the wall and watch the world pass them by.
