Trump’s adoption of crypto could be disastrous for Bitcoin

Donald Trump is an unexpected crypto ally. The power of Bitcoin, embodied in Satoshi Nakamoto Founding DocumentsIts main advantage is that it frees participants from making ambiguous assessments of trust, and forces them to rely instead on evidence.

Bitcoin is real. So it was strange to hear from attendees at the Bitcoin 2024 conference in Nashville last week. cheering enthusiastically a former president who painstakingly compiled calculationslied 390,573 times during his tenure. Mathematically indisputable blockchain believers heap hosannas as Donald Trump gave a speech Full of lies, fabrications and fantasies. They gloated when he took credit for the tremendous increase in the value of Bitcoin during his administration – even though they surely knew that until recently he had rejected the idea of ​​cryptocurrencies.

“Bitcoin, it sounds like a scam,” he said said in 2021“I don’t like it because it’s another currency competing against the dollar.” Now Trump has suddenly become the darling of the crypto world, even though no one believes he has any idea how the tokens work, or even what they are. “Staple-coin … stablecoin,” Trump said at one point, correcting himself as he perhaps glanced at the teleprompter, then paused. “Do you know what a stablecoin is? Does anybody know?”

Trump obviously doesn’t. That didn’t stop him from making promises that only someone who deeply misunderstands bitcoin, both technically and philosophically, could make. He compared bitcoin to the steel industry of a century ago, a stunning mismatch between a symbol of the industrial revolution and the cutting edge of the digital world. He then promised to make the United States the “crypto capital of the planet and the bitcoin superpower of the world.”

This sentiment, as conference-goers will surely know, reverses the basic premise of cryptocurrencies and blockchain – a sovereign system that operates without regard to the interests of any country. In the words of cryptocurrency theorist Eric Casson“Bitcoin is a new ray of hope that allows humans to escape the cage that every nation-state is in today.” Trump’s promise that the United States will dominate Bitcoin is a slap in the face to Satoshi.

One of the proposals Trump offers bitcoin reserve Where the US would store billions of dollars worth of tokens, a plan that experts consider of questionable value to taxpayers – but could drive up the currency’s value enough to enrich the Nashville mob. Again, manipulation by a government superpower is anathema to the values ​​of the blockchain revolution. The second promise Trump made was to pardon Silk Road owner Ross Ulbricht, who is currently serving a prison sentence life sentence In federal prison For running a massive crypto-fueled operation dealing in illegal drugs and money laundering. So much for being tough on crime.

Despite its oddity, the alliance between Trump and the Bitcoin bros seems almost predestined. The crypto world is irritated by government regulation, and it sees in Donald Trump an opportunity to lighten the state’s touch, perhaps to the level of a friendly tickle. Trump has encouraged that thinking by meeting major funders and investors and embracing their ideas. As if cementing the barely hidden transactions, players in the crypto world are pouring hundreds of millions of dollars into Trump’s campaign coffers. So it’s not surprising that Trump promised at the Nashville convention that he would crush “left-wing fascists and authoritarians bent on crushing crypto.” He was warmly applauded for his sentiment. Trump also hinted that Kamala Harris is one of those “fascists.” “Well she’s against crypto,” he said. “She’s very much against it.” (In fact, Harris has not laid out her policy and Reaching out to crypto companies.) The loudest cheers came when Trump said he would fire Securities and Exchange Commission Chairman Gary Gensler — who had been overseeing risky crypto schemes — on his first day back in office.

Legitimate question: Does the current White House “hate crypto,” as the industry and Trump believe? I did a little digging and found that in the early days of the administration, crypto policy — which, of course, was a relatively low priority during the pandemic — was actually up for grabs, with some officials viewing it as a fraudulent technology. However, ultimately, the administration decided to take a path that tried to walk a line between encouraging innovation in the field and enforcing current securities law.