3 Ways Cryptocurrency Crash Could Affect Politics – POLITICO

With the help of Derek Robertson

As the value of the cryptocurrency has reached new highs in recent years, so has the political energy of its proponents.

But now the market collapsed.

Cryptocurrency markets have fallen before, but this is the first election cycle in which cryptocurrency supporters are showing their weight in politics as voters, activists and donors. So what will be the political implications? Where is this political energy going?

Three places to look:

Campaign Funding: Most recently, Sam Bankman-Fried, billionaire founder cryptocurrency exchange FTX, invested more than $10 million in the Democratic primary on Tuesday in Oregon’s 6th congressional district. It was not enough to elect Carrick Flynn, who shares his faith in effective altruismutilitarian approach to charity.

These kinds of donations may start to look even more quixotic when the market has more than halved in the past six months, but don’t expect it to dry up. Many crypto players still have money and are interested in getting their ideas into the political mainstream. Alexander Grieve, a crypto industry lobbyist at Tiger Hill Partners, said he sees no sign yet that the biggest players are cutting back on their political donations. “For the most part, people who donate come from large, well-capitalized players in the market,” he said.

Lobbying: From the side of influence, introducing push of urgency into the policymaking process, the collapse of the Terra stablecoin last week is likely to keep crypto lobbyists even busier.

Citing the collapse, crypto critics, including Sen. Sherrod Brown, Ohio, has renewed calls for stablecoin regulation. At a Senate Banking Committee hearing last week, Treasury Secretary Janet Yellen approved this before the end of this year.

One sign that influencer efforts are underway is that the Blockchain Association, an industry lobbying group, continues to add new members along with DeFi firm Chia Network. ad its membership on Wednesday.

“As regulation approaches,” Grieve said, “lobbying will intensify.”

Ground level policy: This is a real wild card. Even before the destruction of Terra, dramatic turns in the cryptocurrency markets caused mental health problems for some young investors.

Fans of Terra and its sister coin, Luna, have nicknamed themselves “The Madmen”, a sign of the mania that has swept this corner of the cryptoverse. Things have taken a darker turn in recent days, with some investors who lost everything on the moon contemplating suicide in online messages. Summit of Terra subredditonline forum for stablecoin users now has a link to helplines around the world.

A handful of observers are starting to wonder if this might also be fueling new political tensions, just as the desperation of the Great Depression helped fuel the rise of fascism and the spread of communism, and the last global financial crisis led to Occupy Wall Street. , the Tea Party and other active anti-establishment movements.

There is an optimistic case. Writing in New statesman, a progressive political publication, former Portuguese Secretary of State for European Affairs Bruno Maçães is optimistic about the political consequences of this kind of pain. Have predicts this will encourage holders of cryptography to launch a political movement in line with the ideas of the ancient Greek philosopher Plato to create “a world in which mathematical truth becomes the predominant political authority.”

And there is a much less optimistic case. Brianna Wu, progressive activist and former congressional candidate for Massachusetts wrote last week on Twitter: “I’m convinced that frustrated young people who will lose everything in the coming crash of cryptocurrencies will turn to fascism, not socialism, as they look for someone to blame.”

Indeed, much of the desperation of Terra and Luna holders was tinged with outrage at the unsubstantiated suspicion that the collapse of the stablecoin was the result of a sophisticated financial attack by a major financial player.

And Wu knows a thing or two about the consequences that can arise when groups of resentful young people gather online. After immersing herself in an online misogyny controversy in the video game world, she found herself at the center of a harassment campaign that became part of the scandal known as “Gamergate.” The 2014 episode is famous prototype the dynamics of the online culture war that colored the politics of the Trump era.

According to one anecdotal indicator, her pessimistic assessment wins. In a short interview, she told me that her prediction provoked a strong reaction.

“This is the worst set of death and rape threats,” she said, “I have received in a long time.”

Kevin Owoki is a throwback of sorts – think, Whole Earth Catalog with a touch of year zero crypto world. Through their Gitcoin platform, Owotsky and colleagues have raised $60 million to fund various open source Web3 projects, generating solid revenues for the sometimes ethereal idealism at the heart of the Web3 movement.

Its success has made Owotsky one of the movement’s biggest celebrities, personifying an optimistic belief that blockchain can be used to solve the big problems of the species, from our response to climate change to pandemic preparedness.

This week we talked about his mission Greenpeel Worldhis love for skeuomorphic design, as well as historical landmarks for the Web3 movement. Our conversation, edited for more length and clarity:

How do you explain Web3 to people outside the community?

We take ownership and extend it to the digital realm. At Web2, we’re all just serfs in Zuckerberg’s land, right? We don’t really have ownership. Being able to own property rights in a democracy was so important to the prosperity of capitalism and trade because you could really be sure that your land would not be taken by some lord.

I live in Boulder, Colorado, and every hippie who got a $20,000 bungalow in 1971 is now sitting in a $1.5 million house. Our generation is evolving and moving west in the digital realm, not the physical realm.

What is the “green pill”?

The economy is a way of coordinating people to achieve a result. Ethereum is a multi-billion dollar network, global, transparent and immutable, so it cannot be damaged. It is a programmable substratum for finance and human coordination.

We have global coordination failures on things like climate change, preventing global pandemics, and financing our digital infrastructure. So let’s use this global coordination substrate to solve some of these global coordination failures.

Have you heard of skeuomorphism?

No.

Skeuomorphism asks the question, how similar is the old to the new?

Venmo-ing your friend is very skeuomorphic. My big idea is to find non-skeuomorphic ideas in finance. A prime example is how Gitcoin grants work. Have you considered quadratic funding at all?

Not really.

Every quarter on Gitcoin, we allocate $3 million to a crowdfunding campaign. And we don’t finance one on one, we coordinate quadratic funding. This means that if one project has 10 contributors who donate $10, and the second project has one contributor who donates $10, the first project will receive much more matching funds. So if you give $10, your contribution could have an effect of $100 or $1,000. We’re optimizing for the breadth of support, not its depth. He pushes the power to the brim off whales and other central influencers.

This creates more democracy in how you fund your ecosystem. It’s about what your colleagues think about your project, not what some influential person thinks. – Derek Robertson

Since yesterday, if you are one of the lucky few with a bunch of cryptocurrencies still burning a hole in your pocket, now you can use it to buy TAG Heuer watchestime-tested totem of Swiss luxury.

Considering that much of the value of cryptography is still based on its function as a speculative investment or a Trojan horse for the technologies of the future, and not really, you know, as currency, this is usually noticeable when a major retailer decides to accept it as payment. But there is a special significance in its reach in the world of luxury watches, which in itself has an intense, collector-oriented, speculative subculture to compete with crypto.

For example, when the world of luxury watches converged to NFT market Last year, the Jacob & Company token was sold for the equivalent of $100,000 in Ether — a price comparable to many high-end physical watches. There are many similarities between the two markets, not only in the way the objects function as speculative investments, but also in their basic decorative nature as status symbols.

For their most idealistic proponents, cryptocurrencies and NFTs have a second transformative function—the first to introduce people to blockchain technology, and the second to simply prove ownership of that blockchain. It may be in the future, but right now they are primarily brilliant money-making objects, making them the perfect addition to the world of luxury watches. – Derek Robertson

Stay in touch with the entire team: Ben Schrekinger ([email protected]); Derek Robertson[email protected]); Konstantin Kakaes (ur.[email protected]); and Heidi Vogt ([email protected]).

If you have received this newsletter, you may sign here. And read our mission statement is here.