Rethinking Crypto Political Strategy: Opportunities in Activating Decentralized Political Networks
THE NUMBER OF PEOPLE THAT OWN CRYPTOCURRENCY IN THE UNITED STATES IS HUGE.
It’s hard to know exactly how many people own crypto in the US, but according to Gemini’s 2021 “State of Cryptocurrency”, it is estimated that 14% of the United States population owns cryptocurrencies in one form or another. That’s around 21,200,000 people in the US. The same study estimates that an additional 13%, another 19,300,000 people, plan on purchasing cryptocurrencies in the next year. That’s a 40,500,000 person interest group that cuts across age, race, gender, sexual orientation, and political ideology. If the “State of Cryptocurrency” were a literal state it would have the largest population of any state in the country and more people than Connecticut, Utah, Nevada, Iowa, Arkansas, Mississippi, Kansas, New Mexico, Nebraska, Idaho, West Virginia, Hawaii, New Hampshire, Maine, Montana, Rhode Island, Delaware, South Dakota, North Dakota, Alaska, Vermont, Wyoming and the District of Columbia COMBINED.
The 12.3% of the United States population that currently owns or anticipates owning cryptocurrencies over the next year is approaching the total U.S. percentage of Hispanics (18.5%), African Americans (13.4%), and the elderly (16.5% of the population is over 65). There are 5-times as many people who own or plan to own cryptocurrencies than subscribe to the New York Times and 4-times as many than all of the vegetarians and vegans in the country. There are more cryptocurrency holders than there are Jews, Muslims, Asians, or LGBT identifying persons. By any metric, the “crypto community” is one of the largest constituency groups in the United States.
SO WHY HAVE WE NOT ACHIEVED A LEVEL OF POLITICAL POWER COMMENSURATE WITH OUR SIZE?
As we learned over the last few weeks in the United States Senate, our interests are not being respected by our political institutions. This is obvious at a Federal level, where we have been subjected to poorly conceived legislation and frankly antagonistic administrative guidance, and is even more prevalent at the State level, where regulations are created and enforced in an even more indiscriminate way.
The reason why it feels like we are on the outside of political decision-making is due to several factors addressed in this article. I believe the majority of these issues can be fixed through a chapter-driven national association that organizes regional communities in a way that can be utilized as an engine of local political reform and mobilized to support nationwide issues and federal candidates who are unabashedly pro-crypto.
Current Organizational and Messaging Challenges
The success of every political movement is built on organizing regular people in such a way that they can speak with one deafening voice. Thus, for the crypto community to gain political power we must find a way in which your average pleb can harness their economic, expressive, and voting power with millions of others to demand change. We saw during the recent Senate infrastructure fight the power of collective action. To recap: After a hazardously ill-informed tax provision was inserted into the infrastructure bill, organizations like CoinCenter and the Blockchain Association worked incredibly hard to leverage their political contacts in the Senate to get an amendment proposed that fixed many of the deficiencies in the original bill.
The crypto community mobilized on this issue, largely following Tweet updates from several must-follow accounts like @JerryBrito (executive director at CoinCenter), @KMSmithDC (Executive Director at the Blockchain Association) and @JakeChervinsky (DeFi chair at the Blockchain Association), and some large exchanges either directly or indirectly reaching out to their users asking them to call their Senators in support of the Amendment. According to The Hill, Senators received 40,000 calls in a matter of days on the crypto provision of the infrastructure bill which resulted in a compromise amendment being overwhelmingly supported in the Senate and our influence on American political decision making becoming front-page news. Although the Amendment was ultimately not included in the Senate’s Infrastructure Bill for reasons equally procedural and petty, the fight demonstrated to everyone that the work of policy and trade groups, when supported by a grass-roots mobilization effort, can alter U.S. policy significantly.
The problem, of course, is that groups like CoinCenter and the Blockchain Association are not designed to mobilize voters. I am a massive fan of CoinCenter and respect everything they have done and continue to do, but they are a D.C.-based public policy research center with six staff members. They are not equipped, and shouldn’t be expected, to engage in what is essentially a nationwide mobilization effort while they are simultaneously having nuanced policy discussions with elected officials. The Blockchain Association also does important advocacy work but is a trade group that represents member corporations whose interests won’t always necessarily overlap with the interests of the broader “crypto-community”.
I don’t have anything critical to say about these organizations or the role that they occupy, but a lot of the work done by both takes place behind a curtain not accessible to the other 40 million of us and relies on relationships with elected officials that limits how certain issues can be framed. I believe our failure to organize as a community and tacit adoption of an insider strategy of advocacy has caused us to be viewed by many in the government and public as essentially a commercial trade association interested primarily in lessening regulations for economic reasons rather than what I believe we actually are: A massive community staunchly defending our First and Fourth Amendment freedoms and fighting the degradation of our quality of life as a result of unjust domestic monetary policies through the use of global communicative networks and other liberating technologies.
We need to stop fighting for crypto like we are in the sugar lobby and start advocating for our freedoms like any other community interested in advancing human rights. And the only way we are going to be able to effectively make these types of democratic arguments at scale is by organizing hodlers and supporters of economic freedom into a movement. That’s what the NRA did. That’s what the ACLU did. That’s what the NAACP did. And that’s what we should do.
A Chapter-Driven Organizational Model
The ethos of bitcoin and many of the technologies it inspired is that if an idea is broadly supported it will succeed. In other words, if everyone runs this code they cannot stop us. Bitcoin and the idea behind decentralization is the story of demand for an idea resulting in the inevitability of its outcome. Bitcoin is beautiful because it is decentralized without being anarchic. This is also the cheat code for obtaining political power.
As a decentralized community supportive of decentralized technologies, we cannot rely solely on the efforts of a few organizations that have a more targeted focus than the “mobilize the troops” type of advocacy network I am recommending. The saying “all politics is local” is true and the collective best-interest (whatever that may be) of the soon-to-be 40+ Million crypto holders in the United States must be organized in a localized way. My suggestion is that we need a national organization whose primary purpose is to economically and organizationally support a federation of independent chapters that meet regularly around the country to provide education to the community, outreach to local politicians, and regular contact with crypto-voters who can be mobilized on regional and national campaigns when needed.
There are many benefits to organizing through smaller pods: They are able to activate their members by engaging in one-on-one relationships which is, long term, a more effective communications strategy than hoping enough people see a Tweet during a legislative emergency. Smaller groups also allow existing community-based organizations in different regions to come together despite having different focuses (bitcoin groups, DeFi groups, NFT groups, whatever) when it is in the collective best interest of these overlapping but distinct communities. Local organizations also empower members in those communities to leverage relationships with municipal and state politicians and make influencing federal races more effective since the outreach is coming directly from an organized single-issue group of voters from the voting district.
This model also encourages chapters to address municipal and State issues that may be impactful to crypto users and companies operating in the State. I’m a lawyer focused on crypto regulations and publish a treatise through Thomson Reuters on State Regulation of Blockchain and Virtual Currencies every quarter that catalogs the numerous contradictory and unpredictable ways in which the States regulate crypto usage and businesses. As someone who for the last 7 years interfaced with state regulators and officials on these regulations, I have seen first-hand how the States have proposed laws that are often at best misguided and at worst antagonistic to our interests and the broader freedoms those interests implicate. They often do this because they view our interests as fringe and have little pressure on them to take a lighter touch or make better-informed decisions.
While there are several examples that are top of mind of state-imposed regulations that require local activation, New York offers the clearest example of how a chapter-led association may be leveraged to obtain better policies: The NY Bitlicense is completely broken. The license regulates far too much activity (much more than other similar-in-purpose regulations in other states) and is administered in such a way that it takes too long and costs too much to obtain a license even if you wanted to. As a result, for the better part of the last decade, businesses and innovators have left New York or limited how New Yorkers can interact with cryptocurrencies. The fact that there are major companies offering what is in 2021 fairly generic virtual currency products in every state other than the so-called financial capital of the world is absurd. But the problems with the BitLicense can be changed legislatively if New Yorkers make amending or repealing the BitLicense a political issue in State politics. If New Yorkers are able to leverage even just the hundreds of existing Bitcoin groups that already meet throughout the State and connecting their mission to a common mission and are supported in their organizational efforts through national guidance and funds an amendment is achievable. But even beyond that, many of New York’s BitLicense issues can be fixed without new legislation by simply advocating to gubernatorial candidates that the only way to earn their vote and financial support is to commit to reforming the Department of Financial Services and encouraging them to speed up the process to allow New York to compete with an evolving economy.
The creation of a political network organized locally and as part of a national chain of power will be difficult but the seeds of this association are already planted. In nearly every major city and university there already exists crypto meetups some of which have been operating continuously for years and are individually very well organized. These meetups provide a perfect opportunity for organizing a distributed political network under a common umbrella of goals while still allowing each community to maintain its character and local focus. Moreover, and I think this can’t be overstated, almost no one wants to join a “political” group. I’ve been to meetups all over the country and the reason people go is to meet other bitcoiners or crypto-enthusiasts. It is a social group where old friends can have beers and new friends can come and join a community or learn more about a revolutionary but very complicated technology.
The informal nature of these meetups creates a powerful political recruiting tool. By leveraging these pre-existing networks but still encouraging them to remain largely community-focused the chapters will be able to recruit a broader coalition of members. Perhaps only a handful of folks become policy-oriented and there are subsections of each chapter that interface with the national organization on the “political work” but because there is a strong base of politically adjacent or even passive members that support the organization’s overall goals the mobilization of these less-active members becomes more likely. That means that when the next last-minute attempt to sneak through a disastrous piece of crypto legislation into a Senate bill occurs we have clear communication channels across the country through which local organizers can encourage chapter members to mobilize.
I have seen firsthand how this type of community-driven activism can achieve political success locally and the power of associating with a well-funded and organized network to leverage that success on national issues. In 2014, I started a political organization in Miami whose purpose was to activate young voters on issues that were not being addressed by the mostly inept septuagenarians running local and state government. Through lots of one-on-one conversations over countless weekly meetups we were able to flip several local elections, impact state and federal races, get reformative provisions passed in municipal charters, and engage lots of people in ways that are still having repercussions throughout Miami today…including, directly, the City’s decision to publish the bitcoin whitepaper and adopt a pro-bitcoin resolution and policy. Shortly after starting the organization, we affiliated with a national organization with overlapping principals who provided us resources and guidance on how to leverage our local power on federal issues. It was through this experience that I realized the importance of respecting the autonomy of local chapters or affiliate groups and the value of connecting nodes for a central purpose when mutually advantageous.
Localized power also allows us to craft more precise messaging. In the same way that the NRA or Planned Parenthood creates report cards and checklists ahead of every local, state, and federal election that tracks how politicians feel about these issues, the crypto community should be doing the same thing and the explicit purpose of these efforts should be that our large and growing voter base will vote against you and fund your opponent if you do not support the policies that we care about.
Leveraging our collective enthusiasm for the freedoms made possible by bitcoin and the other technologies it inspired is the only way to achieve consistency among state regulations and build a coalition of candidates who will support and advocate for our interests. I believe this is the path toward achieving greater freedoms in the abstract as well as obtaining vital specific reforms that at this point seem impossible like amending the tax code so you don’t have to technically pay capital gains on a $3.00 lightning purchase or obtaining assurances from Presidential candidates that they will stop appointing administrators to the Treasury or SEC who are outwardly antagonistic to our interests.
About Me: I’m a crypto lawyer and the author of Bitcoin is Speech: Notes Toward Developing the Conceptual Contours of Its Protection Under the First Amendment.
Follow me on Twitter and if you’re interested in supporting this mission DM me @bitcoin_Wales.
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