How does Bitcoin fit in the Political Stage? A crash course on the politics of Bitcoin

Posted in: Archive
April 9, 2014 10:57 AM UTC

One thing to be aware of in our world is, sadly, politics.
Yes, Politics. It’s ‘smart-people’ term for ‘yelling about government.’  Take it from me, Calvin Tran. I was oddly fascinated with politics in 3rd grade with the election of George Bush VS John Kerry. I was the typical brainless child who stood by his parents’s opinions and with no real understanding of politics. This came back in 2011 when I discovered Ron Paul, and (yes, I can see your eyes rolling) I became enthused with the Libertarian ideals of free market principles and social freedoms. Since then, I’ve been enthralled by economics (yes, mainly Austrian School) and became very politically literate.
Being politically literate is one of the most unrewarding things. You spend too much time reading things you cannot change and get angry when someone has a different opinion. Since the Ron Paul campaign, I’ve certainly been very libertarian, but politics is almost always useless; It’s a giant opportunity cost where I could be studying up for a nearing college test, but instead, I dwell on some political page getting enraged at things that don’t support my confirmation bias, meanwhile politicians will hardly change their course of action whether or not I did like a facebook post about some law.
Except perhaps now.
With Bitcoin, things are certainly different. We are in the pre-pubescence of its political life and the battle lines are only now beginning to be drawn.
So where does Bitcoin fit on the political stage? (By this, I can only speak of US politics.)
[divider]Where does it fit for the left and right?[/divider]
It doesn’t. Mainly, like the internet, it’s not something either ‘side’ has a good deal of claim to. Either will settle for net neutrality, but here’s where things get interesting for bitcoin.
The Democrats are somewhat in a good position of accepting Bitcoin as legitimate. For the greater part of the past decade, they’ve ‘championed’ civil liberties like net neutrality and freedom of speech for the internet.
However, the global financial meltdown has been a big launchpad for their economic policies. For the ‘progressive-liberals,’ anything financial and economic tends to be a hot press-button issue. Words like ‘privilege’ and ‘oppression’ are all too often used to dismiss almost anything other than increasing relief spending. I wrote a response to the mind-numbingly ignorant assessment by ThinkProgress. For this reason, Democrats may be too blinded by aggression towards financial institutions as a whole to jump aboard the Bitcoin train before it starts building steam.
With the Republicans, there’s a huge ‘establishment’ wing of neo-conservative right wingers. These are mainly like former lawmaker Pete Hoekstra, of whom I had a brief meeting with at Model UN. Their perspective will mainly consist of cyber-security and finding a way to regulate Bitcoin for purposes of countering terrorism and narco-efforts. Events like the Silk Road bust have been their schtick in supporting more government oversight in increasing efforts of the Drug War.
However, the truth is, many of these conservatives will admit that they have no plans on regulating it because it is a faction of the internet. That puts them in a very odd position.

Senator Jared Polis (D-CO) Photo from Politico

There’s no real camp for Bitcoin to go. Instead, it’s on both sides. You’ve got opposition from nay-sayers like Senator Manchin (R-NJ) to Chuck Schumer (D-NY) who may oppose Bitcoin for narco-terrorist-faux-economic reasons. But there are also optimistic supporters like Jared Polis (D-CO), Justin Amash (R-MI) and Thomas Massie (R-KY) who also come from both sides of the aisle and believe in a supportive public policy. And yet, this opens a whole new can of worms because some politicians may support Bitcoin through what they believe is supportive measures of regulation, taxation and market intervention while others may believe the best way is to not interfere and allow the market to work.
[divider]What US Politics is and What it isn’t[/divider]
Almost everywhere, the political spectrum is summed up as left and right. Let me tell you now, that is just the ‘rosy,’ Schoolhouse Rock version of politics. The reality of US politics is more like House of Cards where public choice theory is real and politics is just a game of ‘regulatory’ hot shots and crony-tastic friends-with-benefits.
In this light (the libertarian case), there’s really only this spectrum: Property-rights based freedom vs its opposite (government force).
That is why Bitcoin doesn’t fit nicely into the current political show. On this metaphorical political stage is a vaudevillian show where politicians slap each other with verbal rubber chickens and mud pies for laughs and attention. Cutting through the jargon and noise, the only divide is ‘should we spend more or should we spend even more,’ so we really have to focus in on what governments do to Bitcoin.
So using this new paradigm I lay out, Bitcoin will tend to fit in the more libertarian side, not because there’s a large amount of Bitcoiners who are libertarian (and believe me, many libertarians are some of the most vehemently opposed to Bitcoin), but because its entire system and protocol, its core, its development and it itself relies on free people. Bitcoin, like the internet, does not stay within a nation’s borders. It promotes international cooperation and naturally bypasses government control.
I do understand, however, that Bitcoin has a very big non-libertarian base as well. This difference in opinions was actually a point of tension at the 2013 Bitcoin Event held by the Bitcoin Foundation at San Francisco. Many investors want a level of healthy regulation to ensure more legitimated acceptance of Bitcoin and it is certainly understandable why, but the divide here goes beyond politicians and is being fought more by economists. I’ll write about that battle in a later article.
[divider]The people with the real power on bitcoin are not elected.[/divider]
Attorney General Eric Holder. Photo by Andrew Burton of Getty Images

We can talk about politicians all we want, but the truth is, most policies that will affect Bitcoin will be put in place by people we can’t elect.
Take for instance the IRS. They are not elected, they are hired, contracted, appointed, etc. However, they have put in place the federal taxation guidelines of the entire USA. Not only do they have that power, but they’ve used it to place a retroactive tax that is so incredibly complicated, it is practically unenforceable and will most likely be ignored.
And for the US, especially, the IRS ruling Bitcoin as property goes against the rulings of other branches of government as well as state governments.
Attorney General Eric Holder of the Department of Justice sees Bitcoin as a tool for people wanting to buy weapons and drugs, of which he is in control of enforcing.
[divider]Final thoughts & TL;DR[/divider]
Because Bitcoin is in its early stages, it’s rather important for influential members of the Bitcoin community to be aware of the political climate that we’re in. For every nation and every situation, it is different, but in the US, neither ‘side’ of the left-right paradigm can really be a home for Bitcoin, but we certainly can find allies in more ‘liberty-based’ politicians.
However, it’s important to remember that influential people are out of our control. Not only do our votes count for rather little nor can we not elect most officers and bureaucrats in our own government, but we have no power with the people outside of our nations, like the PBoC of which we’ve seen their policies strongly affect the Bitcoin market.
The real solution we really have is to continue supporting Bitcoin through our own innovations as entreprenuers, improve Bitcoin Core as developers, increase the ease of information as reporters, and for everyone in between, keep working towards a brighter future with or without government policies.

Last modified: June 14, 2020 9:26 AM UTC

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Calvin Tran @@clvnthbld

Calvin Tran is a filmmaker attending NYU's Tisch School of the Arts. He is interested in economics as a way to see the world and inspires him to create media that illustrates the power of freedom and technology in improving all of our lives.

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