Elizabeth Warrens Bitcoin Blind Spot

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After a pandemic year in which a craze for all things cryptocurrency spread over a homebound American population, political battle lines are now drawn on the issue. At a Senate hearing in June, Senator Elizabeth Warren (D-Mass.) Fired what appeared to be an early warning shot on the issue on behalf of many progressive skeptics of the phenomenon. Bluntly describing crypto as a tool to “rip off investors, help criminals and worsen the climate crisis,” Warren called on federal regulators to take action to help “drive out fake private digital currency.” It was a sentiment that probably resonated with supporters of the Liberal senator, many of whom have already beaten the drums about a technology they see as pure speculation and waste.

Murtaza Hussain is a reporter for The Intercept who focuses on national security and foreign policy.

On most issues, my political sympathies in the United States fall to the left of the center. I am in favor of treating quality health care and public transport as a public good, urgent action to combat climate change, a fair tax system and peaceful cooperation with nations abroad. But I realized that I am a bit of an aberration when it comes to the subject of crypto: I don’t hate it. To go further than that, the more I learn about the technology, the more I can imagine that cryptocurrencies and blockchain will be applied as tools to restrain corrupt institutions and loosen the grip of an incumbent elite who ment, constantly fails and abuses his power, and yet never seems to face any real responsibility for his actions.

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Consider the role of bitcoin, the first and most famous cryptocurrency, which is now close to the level of global public adoption that the internet reached in 1997, when it had around 200 million users. Bitcoin was conceived as a form of unlicensed money, recorded on a decentralized ledger known as a blockchain. Transactions on the blockchain ledger are immutable and transparent, and they cannot be censored. The richest users cannot change the rules of the system in their favor, nor prevent the poorest users from having access to them. The only technology anyone on Earth needs to participate on an equal footing in the network is a telephone with Internet access.

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Bitcoin’s energy spending, which Warren criticized during his Senate hearing for being frivolous, is designed to protect the ledger from malicious attacks by increasing the resource requirements to attack it. Contrary to popular belief, the blockchain ledger is not a black box immune to surveillance. But in a similar fashion to encrypted messaging platforms, the system is designed to allow targeted monitoring of individual users with enough effort, but not everyone’s mass surveillance.

Bitcoin is neither perfect nor above criticism

How attractive such a system is to you is likely to be a function of how repressive you think society can be and your satisfaction with the current global financial system.

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After more than a decade of documenting the domestic and foreign impacts of the US Global War on Terrorism, my personal opinion is that our society has the capacity to be extremely repressive and that the financial system, as it is today. built, is frequently used as a weapon in the hands of irresponsible elites.

The US government, for its part, has used the dollar and its control of the global financial infrastructure like SWIFT to wage an economic war on entire countries with devastating effect. He has monitored, blacklisted and shut down legitimate businesses and aid organizations around the world that have been unlucky enough to fall on the wrong side of Washington DC’s political divisions. For the millions of innocent people whose lives have been ruined by this global crackdown, as well as for those living under undemocratic regimes subject to their own irresponsible national monetary regimes, there is often no question of justice, and even less compensation, when they find themselves on a blacklist and the value of their work frozen or confiscated.

Bitcoin is not a quick fix against such abuse. But it is definitely a start. Naval tech entrepreneur Ravikant once called it a “tool to free mankind from oligarchs and tyrants, disguised as a get-rich-quick scheme,” a statement that aptly illustrates the feelings it arouses in people. casual investors and ideological supporters. . Bitcoin’s existence also appears to become much more prominent in the years to come, as global finance grows into something even more powerful and authoritarian than it is today.

In Liz Warren’s widely circulated June 9 statement attacking Bitcoin, her accompanying remarks endorsing the creation of a digital version of the US dollar were overlooked. Warren was right to mention that state-run digital currencies had potential benefits, including increased access to financial services for the unbanked and easier implementation of monetary policy. But a future world of such currencies, in which bitcoin has been regulated by virtuous progressives, will also be a world in which mass surveillance and social control is possible on a scale unprecedented in human history.

A future US Treasury Department using the digital dollar would have the ability to monitor and block the transactions of underprivileged people and organizations with the push of a button, or even confiscate or spend their money if desired. In China, a digital yuan with programmable capabilities is already being promoted for use within and beyond the country’s borders, with no claim that the Chinese Communist Party will respect strange notions like human rights when things will happen. It would not be an exaggeration to say that in such a future, a fully independent online decentralized currency would be the only safe haven for individuals fleeing the threat of economic coercion from the two great superpowers of our time. For some, this is already the case.

Bitcoin is neither perfect nor above criticism. In my opinion, it is not impossible that it could even be replaced by another cryptocurrency with superior scale, design and function. But rather than offering constructive criticism of Bitcoin or possible alternatives to those threatened by the emerging state-backed digital currency order, the scorched-earth response of progressives like Warren serves as a defense. The only assurance they offer is a dubious bet on the permanent goodwill of government authorities, which has not been obvious in the past.

For progressives, many of whom, including Warren, are, I think, motivated by a genuine desire to protect the innocent from evil and curb state excesses, it’s worth keeping an open mind to new technologies. rather than trying to regulate them immediately into oblivion. Decentralized monetary technologies like Bitcoin, crypto-based forms of organizations like DAOs, and the use of decentralized blockchain record keeping for ownership and identity documents could all play an important role in defense. human rights at home and abroad. Nothing prevents politicians on the left from designing cryptocurrencies and tokens that reflect their own values ​​and incite the kinds of behavior and cooperation they would like to see in the world.

To get there, it will be necessary to reject the technophobia that is fashionable today, as well as the nostalgia (rather ironic for self-identified progressives) for the social and political forms that existed in the 20th century.

Warren was right on one point when she described cryptocurrency as a ‘Wild West’. Like the old West, crypto currently has more than its share of outlaws and opportunists. But whoever finally tames this new frontier will find himself with great power in the decades to come. For progressives keen to step out of their comfort zone and explore the possibilities offered by this new technology, this is something to consider.

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