DeSantis and the Growing Culture War Over Bitcoin

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The thing is, most of the worst claims about Greenidge were flat out false. CoinDesks Nik De, Doreen Wang, and Cheyenne Ligon traveled to Dresden, upstate New York to take the temperature of the lake and speak to locals, finding that no lawmakers visited the city from the rust belt or talked to its mayor before drafting what is essentially a freeze of new bitcoin miners.

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Today, most of the debate about bitcoin mining has focused on the environmental impact of bitcoin networks. Greenidge became a lightning rod because before the company moved the equipment to a decommissioned coal-fired plant, meaning miners weren’t just tapping into state power that would have been generated from anyway, but were actively releasing fresh carbon into the atmosphere.

The Bitcoin network uses as much energy as a country like Norway, and trying to figure out whether it’s worth it or not often comes down to your view of how you value money without permission. Individuals can certainly make up their minds on the matter, but how a state should deal with Bitcoin, for example, whether mining should be encouraged or banned is a societal-level conversation involving politicians, stakeholders and persons concerned.

In a behind-the-scenes account of the birth of the story, De wrote that he expected the locals to hate the factory. They were told that Greenidge was pumping pollution into Seneca Lake and creating incessant noise at the plant that was allegedly created (a claim that has also been debunked). Instead, Des’s team found that many people in and around town were supportive of the start-up company. Although Greenidge created a relatively small number, every job counts in a city like Dresden (population: 296).

In fact, the few complaints about Greenidge made by locals came from so-called cottagers, wealthy foreigners with lakeside vacation homes. Of course, as taxpayers, these people have every right to worry about the value of their property, but should their opinion matter more? Because it seemed.

And therein lies the nut: beyond all the other intractable debates about bitcoin mining, there is potentially a class conflict. You all know the story: Bitcoin was born during the Great Financial Crisis, a tool that allowed anyone access to a semi-private electronic payment system where the money supply would always be verifiable, a total rebuke of the bank and the Federal Reserve.

Over time, this narrative has become a bit more complicated, especially since some of Bitcoin’s biggest proponents have themselves become entrenched elites essentially for making a few good trades a decade ago. There are now plenty of white-collar jobs based on analyzing bitcoin price performance and lobbying for new bitcoin-derived investment vehicles.

Bitcoin mining has also gone from something you could do on your personal computer to becoming a capital-intensive industry, requiring the purchase of hundreds or thousands of specialized computers that consume electricity 24 hours a day. 24/7 if you want to compete on a meaningful scale. But the proof-of-work algorithm that makes Bitcoin also tethers it to the ground: these investments are made in real communities.

Greenidge, for example, hired real union electricians and created dozens of short-term construction jobs. The company has made a number of improvements to Dresden, including repairing a children’s playground and other beautification efforts. Not all facilities operate their own coal-fired power plant like Greenidge requiring as much labor, but many create opportunities for people where opportunities don’t always present themselves.

If Greenidge is any indication, the real conversations we might have around bitcoin mining and class will increasingly be consumed by another conflict: the culture war. I said for a while, perhaps being too reductive, that bitcoin was going to become a red-blue problem in the United States, with Republicans increasingly endorsing it and Democrats disavowing it. While the network itself will likely always remain credibly neutral, the way we think about it and politicize it will follow predictable lines. Many subjects traveled in this way. Before climate change became a corner issue in American politics, for example, it was a relatively non-partisan issue that many politicians agreed something needed to be done about.

Just yesterday, Florida Governor Ron DeSantis (R.) spoke about the threat of bitcoins to the current regime, during an announcement event for his 2024 presidential campaign. Although he presents himself as a populist, DeSantis has the early support of wealthy technologists like Elon Musk and PayPal mob member David Sachs. DeSantis is probably best known nationally for what is called the Dont Say Gay Bill and a fight with Disney.

Something tells me that DeSantis’ commitment to protecting Bitcoin is as performative as his central bank digital currency (CBDC) ban in Florida (before the Fed even decided if it was worth fully study a digital dollar). But that will still be enough to color some peoples’ impressions of crypto, reinforcing the kind of political feedback loop that allowed environmentalists to lie about Greenidges’ ecological footprint and the Democratic government in New York to buy it all. .

As my colleague Nik De said, a conversation that doesn’t include those most directly affected can lead to flawed results. When the only two major political parties are shadow boxing about counterfeit money on the internet, the only people who can make their voices heard probably own a vacation home.

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