Source: The Atlantic
Author: Charlie Warzel
Title: Crypto’s Legacy Is Finally Clear
Compiled by: BitpushNews Yanan
For years, skeptics of cryptocurrency have been puzzled: what does it all mean? Meanwhile, supporters of cryptocurrency tirelessly search for compelling answers. They firmly believe that blockchain, as the technological foundation of cryptocurrency and many similar applications, is a groundbreaking innovation. It cleverly enables precise records of online ownership, significantly promoting the rise of digital communities. Moreover, they argue that blockchain is the core element in building and supporting a third-generation hyper-financialized internet. In this new era of the internet, you can easily purchase a digital artwork of a cartoon ape for $3.4 million without any human intermediary.
Then there's cryptocurrency itself: Bitcoin, Ethereum, and the ever-emerging array of Memecoins and startup tokens. These are mostly highly volatile, speculative assets—some use them for trading, posting parodies, storing value, and sometimes striking it rich overnight, but they can also lead to total financial ruin. At the same time, they are often used for illicit purposes, such as notorious money laundering, illegally funding startups, and orchestrating complex financial scams. Nevertheless, cryptocurrency does have its application scenarios. But for a long time, skepticism about it has revolved around the fact that this technology is too complex and does not offer functions that modern financial systems cannot achieve—in other words, for those who do not intend to use it for criminal purposes, cryptocurrency is a technology solution in search of a problem.
I tend to agree with this perspective. I have spent time reporting on NFTs and decentralized autonomous organizations (DAOs) based on crypto tokens, such as the DAO that attempted to purchase a first edition of the U.S. Constitution in 2021. I have also read some obscure white papers from Web3 startups and decentralized finance (DeFi) protocols that utilize smart contracts to achieve financial service transactions without large banks. However, I have never found the so-called 'killer app.'
However, after the presidential election, I have different thoughts on the influence of cryptocurrency.
Cryptocurrency, an innovation in this technological field, has an influence that goes far beyond a single service category; it has fostered a unique cultural atmosphere. This culture holds an innate distrust of traditional institutions while resonating to some extent with those who challenge or dismantle these institutions. Recent election results, to some degree, represent a challenge to the authority of traditional institutions (such as federal government, public health systems, and media), with the cryptocurrency industry playing a facilitating role in this process. The industry established a super political action committee called 'Fairshake,' raising over $200 million to support political figures who are friendly to cryptocurrency, regardless of whether they are from the Democratic or Republican parties.
It is worth noting that Donald Trump has shown great enthusiasm for cryptocurrency technology. During his campaign, he not only vigorously promoted a new cryptocurrency platform focused on decentralized finance (DeFi) called 'World Liberty Financial' but also vowed to dismiss Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), who has come under scrutiny for strict regulation of the cryptocurrency industry. Gensler's resignation is scheduled for January, a routine move when a new administration takes office.
Additionally, Trump has promised to ease regulatory policies to 'make America the global center for cryptocurrency and a superpower in Bitcoin.' He explicitly stated during his campaign: 'If you support cryptocurrency, voting for Trump will be your best choice.'
In the short term, cryptocurrency seems to have spawned a persistent and complex cultural phenomenon, comprising loyal believers, tech utopia dreamers, as well as speculators, criminals, deceived individuals, investors, and those trying to cater to voters. The financial impact brought about by this technology has made many people rich overnight, and they are using these resources to strive for a world that aligns with their vision.
Although the declaration of Bitcoin’s birth, the white paper that laid the foundation for the entire cryptocurrency field, did not directly address political issues, cryptocurrency quickly won the favor and admiration of cyber-libertarians. The core beliefs held by these cyber-libertarians can be traced back to the (Declaration of Independence of Cyberspace) published in 1996, which explicitly states: governments should not interfere in the management of the internet.
Bitcoin and other cryptocurrencies are built on blockchain technology, and the decentralized nature of blockchain inherently carries an anti-establishment hue. Their operation does not rely on any central authority or intermediary. The late digital culture scholar David Golumbia profoundly analyzed in his 2016 work (The Politics of Bitcoin: Software as Right-Wing Extremism) that 'among Bitcoin's most fervent supporters, many depict the Federal Reserve as an essentially corrupt institution, a tool manipulated by conspiracy theorists' bankers who aim to 'completely control people's lives.'
For those steadfast believers at the time, cryptocurrency shone like a beacon of technological utopia, illuminating the path to fight against a fragmented, exclusionary, and exploitative financial system. They firmly believed that this technological innovation could either reshape the financial system or completely overturn it.
However, today, the cultural ecology of cryptocurrency has become increasingly diverse. Trading platforms like Coinbase and Robinhood allow anyone with a bank account and smartphone to easily step into this once-mysterious trading world. Certainly, there remains a group of 'hardcore believers' who have unwavering faith in cryptocurrency technology; but simultaneously, we see celebrities and 'meme kings' launching new coins using internet pop culture to attract attention, along with a large number of day traders trying to find opportunities for overnight wealth in these speculative tokens.
The profits of cryptocurrency are often closely linked to hype and marketing, a characteristic that has spawned a unique digital culture. This culture attracts not only those seeking a sense of belonging but also investors enticed by the dream of 'thousand-fold returns,' as well as players who simply enjoy how cryptocurrency can 'annoy the mainstream.' Even as cryptocurrency gradually moves toward the mainstream, many loyal adherents still view their investments and community as a symbol of counterculture.
Thus, it is not surprising that right-wing cultural warriors like Jordan Peterson and Joe Rogan, despite being quite influential now, still see themselves as 'outsiders' and show a strong interest in cryptocurrency. Similarly, venture capitalists like Marc Andreessen, whose firm is deeply involved in the cryptocurrency space, are gradually leaning toward more conservative political positions, a change that is equally worthy of our attention.
It’s easy to scoff at the hype cycle of cryptocurrency—you can sneer at the wild fluctuations in the prices of 'Bored Apes' NFTs or look down on the shameless hype in the Memecoin culture. Mentioning controversial figures associated with Memecoin, one must bring up Haliey Welch, who transitioned from a social media personality to a podcast host, better known by her online name 'Hawk Tuah girl.' The Memecoin she launched saw a meteoric rise in price within a short time, only to crash back down, angering many loyal fans. If you resonate with this description, I apologize, but I trust you understand my implications.
Cryptocurrency culture is filled with obscure internet jargon and unique visual symbols that seem out of sync with mainstream culture, even repulsive to some. The frequent scandals of Ponzi schemes and defrauding retail investors within the industry—like insolvent companies such as FTX and bankrupt platforms like Celsius—have further eroded trust. However, despite these upheavals, or perhaps because of them, the cryptocurrency space has still produced a number of millionaires, billionaires, and a vast reserve of corporate capital. Today, they are using these accumulated wealth to exert influence on the political stage.
This brings our gaze back to Trump. Whether he truly understands the deep logic of cryptocurrency—beyond recognizing it as an effective tool for garnering votes and raising funds—remains ambiguous. However, the alliance between Trump and cryptocurrency supporters has its philosophical rationale. Trump himself is a figure driven by a desire for money, not without a hint of corruption. For his supporters, part of the appeal of the Trump administration comes from his promises to weaken federal power, strike back at political opponents, and reshape American institutions. It is not difficult to see how the vision of 'Make America Great Again' (MAGA) intersects with a certain 'marginal culture' that deeply despises and views the existing system as corrupt and untrustworthy. This intersection is also reflected in certain tech executives, such as David Sacks, the venture capitalist opposed to 'woke culture,' who was appointed by Trump to oversee AI and cryptocurrency affairs.
I spoke with Molly White, who has long followed the cryptocurrency industry, about these views. She pointed out another similarity between cryptocurrency advocates and the MAGA camp: both desire to become the powerful institutions they publicly disdain. 'Bitcoin, along with other cryptocurrencies to some extent, embodies a spirit of anti-government and anti-censorship,' she explained to me. White stated that the original intention of cryptocurrency was based on the idea that large financial institutions and governments should not intervene in this emerging field. However, 'many cryptocurrency advocates have accumulated immense wealth by holding these assets, thus gaining significant power. Over time, this idea has gradually shifted from 'we don't want those institutions to have power' to 'we desire to have power.'
White believes that the cryptocurrency industry has already transformed into a version of the very system it originally opposed. 'Look at the actions of cryptocurrency companies like Coinbase; they are remarkably similar to the financial institutions criticized by Bitcoin's creator Satoshi Nakamoto. These companies not only maintain close cooperation with the government but also perform identity verification like traditional banks,' she analyzed. 'They appear to have rebuilt a financial system, yet offer even less protection to consumers.'
It is evident that if Trump returns to power, the cryptocurrency industry and its elites may indeed get what they desire. The industry may face new regulatory frameworks that define tokens as commodities rather than securities, significantly loosening trading restrictions and potentially fostering deeper integration between major banks and cryptocurrency assets. Last week, Trump nominated former SEC commissioner and cryptocurrency supporter Paul Atkins to head the SEC. Following this news, the price of Bitcoin surged, breaking the $100,000 mark (in contrast, the price of Bitcoin was less than half of this figure during the same period last year).
You don't have to be a cynic to see the flywheel effect at play: the rise of cryptocurrency as a political force cannot be attributed to its technology having broad and undeniable utility, but rather because it has created a class of millionaires, attracting countless eyes and interest. The industry woos politicians with wealth, while politicians cater to donors' needs through promises. Ultimately, candidates who support cryptocurrency win, the price of Bitcoin rises, making the same group of people even richer, allowing them to exert greater political influence.
Although Trump has not yet officially taken office, the potential chain reactions are already becoming apparent. Justin Sun, a cryptocurrency tycoon from China, recently spent $30 million to acquire a large number of Trump's 'World Liberty Financial' tokens—this transaction could yield substantial profits for Trump while raising concerns: the incoming president's investments in cryptocurrency may become a convenient avenue for bribery. Rumors suggest that Trump might fulfill his previous promise to establish a strategic Bitcoin reserve in the U.S., which could even require the federal government to purchase up to 200,000 Bitcoins annually over the next five years—perhaps even using the nation's gold reserves in exchange. For cryptocurrency whales, this is undoubtedly an attractive plan—a feast of wealth transfer from the government to cryptocurrency giants. In reality, this would allow cryptocurrency holders to sell their assets to the government at high prices, further driving up asset prices. For a technology that originally embraced decentralization, relying on the government to support Bitcoin's price is undoubtedly a rather ironic maneuver.
During Trump's second term, cryptocurrency may become the 'lubricant' for government operations, but more concerning is what the consequences might be if the executives of the cryptocurrency industry achieve all their goals. My colleague Annie Lowrey recently wrote: 'Rules favorable to the industry will lead to a flood of money into the crypto market, which will not only make existing cryptocurrency holders richer but could also amplify market volatility, putting millions of Americans at risk of scams, fraud, and deception.'
White also expressed similar concerns, especially as cryptocurrency further integrates with the global economy. Although the collapse of FTX caused significant losses for some users, it did not create genuine chain reactions within the broader financial system. She candidly told me: 'At that time, cryptocurrency companies had not yet grown to the point of being too big to fail, nor did they need government bailouts. However, if banks are allowed to delve deeper into this, and if cryptocurrency becomes more closely integrated with traditional finance, I fear this industry will expand to a larger scale, and once it crashes, its destructive power will be even more astonishing.'
The future of cryptocurrency remains shrouded in mystery, but at least in the short term, its impact seems clearer than before November 5. It has proven that cryptocurrency has indeed found a very specific application scenario—it serves as a technology that tightly grips a culture that views greed and speculation as virtues and further fuels this trend while embracing market volatility. The only thing that seems certain about cryptocurrency is that it attracts and shapes a diverse group of individuals—those who may be adventurous, overly optimistic about the benefits of technology, or deeply skeptical of traditional institutions. These traits align cryptocurrency with the turbulence and distrust of the 2020s, as well as the nihilism and corruption characteristic of the Trump era.
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