A Fault in Our Stars

If you’ve been unable to detect a political tilt to our publication thus far, that’s very much by design. Our “open-minded” view often pulls us far from the center, sometimes to the left, sometimes to the right. This is because we’re subscribers of Horseshoe Theory. But put a pin in that for a moment.

We bring it up now, obviously, because of the results of this weeks’ election, and the market’s rally in the wake of Donald Trump’s re-election. (More on that in a moment too.) Another leading storyline in the broader crypto sphere is how Polymarket was early to signal the win on election night, after emerging as a leading indicator heading into election day.

Most of the crypto community feels like it won with the election. Trump is pro-crypto — memetically, at the very least — and many more qualified supporters played a part in his campaign. Gary Gensler’s days at the helm of the Securities and Exchange Commission (SEC) is near-certainly numbered. Quite possibly, any semblance of crypto regulation is, too.

But Trump is far from an actual win for the crypto community. If the appointment of JD Vance to the vice presidency is any indication of policy direction (or, perhaps just as likely, if Vance steps into a Cheney-esque head of government role while the head of state knocks out another quick nine at Mar-a-Lago) we’re not going to DeFi Disney World anytime soon.

Vance is a Silicon Valley guy, who happened to get his backing by none other than Peter Thiel. There’s no shortage of would-be plutocrats in Trump’s orbit, but they don’t get much more hierarchical than Thiel, PayPal co-founder, dodeca-billionaire, and friend of self-professed neo-monarchist Curtis Yarvin. In other words, not exactly the thought leader you’d want spearheading a movement to democratize wealth distribution. And as much as I fear a corporate-approved nanny state spoon-fed with sugar by the likes of Sam Altman’s sex robots, I equally fear a shadow techno feudalism puppeteered by the likes of Peter Thiel.

So despite the campaign’s pro (on paper) crypto agenda, I do believe some elements of the movement are now at risk. Namely, the underpinnings of the technology itself. For example, institutional projects like the L2s being built on Ethereum are web3 in name, but really in name only. These environments have all kinds of built-in governance controls that compromise users’ ability to actually command control over their digital assets within them. I could see a “crypto-friendly” administration backed by Silicon Valley billions selling the public on the idea of a freer web, powered by crypto, but then building in systems that financialize everything to the benefit of existing corporations, rather than the originators of the data themselves, the citizens. No matter who won, we would have wound up with a beachhead the true crypto punks will have to breach.

I do see at least one potential bright spot for the culture from a Trump presidency though. He promised to pardon Ross Ulbricht, who invented the Silk Road, an anonymous digital marketplace that embraced Bitcoin early as its payments engine. It was only accessible via an Onion Router on “the Dark Web”, comprised of sites that have been delisted by search engines or traditional hosting providers due to the nature of their content.

Now if you hear Dark Web and immediately think sex, drugs, and human kidneys, well. You may be right, but you’re missing the point. The point is, Ross is a pure technologist, and he invented open source software that gives privacy to participants in a commercial financial exchange. Ask any TradFi specialist and they’ll tell you, information moves the markets. There are plenty of non-criminal reasons to want a discreet, auditable digital marketplace that keeps some things private.

Prosecuting Ross for how other users used his marketplace, when he set it up explicitly so that there was no way for a central authority to intervene with their transactions, is entirely indicative of the Big Brother style control crypto is designed to buck. (Okay, and maybe he tried to have someone killed in the stupidest way possible, or whatever. But, again, missing the point.) The Silk Road is gone today. But new ones have replaced it. Bitcoin is gone as the medium of exchange, too, which has moved to more anonymous tokens, since peoples’ logged BTC transactions have begun to get them prosecuted. And the highest-profile technologist’s head remains on a proverbial spike as a sign to others: Beware, and don’t fuck with the boundaries of commerce.

Which brings us back to Horseshoe Theory. It’s the idea that, like a horseshoe (Ω), the gap between the furthest reaches of the left and right is about as slim as the strait between Alaska and Russia. We all share so much more in common than we are divided on. We just use different language to describe it. This is the gap in the horseshoe that needs to be bridged.

The crypto space rallied around the right, because the left’s model of regulatory crackdown represented an active threat to cryptographically powered information networks. Now that this threat has faded, we have no less reason to be fearful of the right.

If anything, the broader culture must work to build inroads with those on the left — who have likely written it off as scammer-friendly Monopoly Money at best, and techno-fascist Galactic Credit Standards at worst — to communicate the value of this technology that we’d like to see mass adopted by entities other than a sovereign state’s central bank. Like, for example, its utility for community organizing purposes, or for securing and anonymizing data to keep it out of the governments’ hands, both of which could become a lot more useful in the coming years.

—El Prof