There Is No Leftist Case for Crypto
Most of us sense cryptocurrency is a scam. But some boosters claim progressives shouldn’t abandon crypto. Examine those claims closely, however, and you won’t find much — perhaps because there really isn’t an argument for crypto from the Left.
By now, most of us are at least vaguely aware of cryptocurrency — if not from the glut of Super Bowl ads early this year or incessant media coverage, then perhaps from our acquaintances, one in five of whom had reportedly invested in crypto by March 2022. Cryptocurrencies (and there are many) are virtual currencies that aren’t maintained by an external authority like a central bank but are instead secured digitally, in a ledger called a blockchain.
The Left (and everyone else) has plenty of reasons to view cryptocurrencies as little more than speculative assets that function like a Ponzi scheme, rewarding early adopters and relying on the constant recruitment of new investors to fuel their gains. Su Zhu and Kyle Davies have gone missing after their crypto hedge fund, Three Arrows Capital, wasted away in bankruptcy, and liquidators are currently brainstorming alternate ways to serve them subpoenas. The Securities and Exchange Commission has taken aim at crypto’s celebrity endorsers and influencers, most notably Kim Kardashian, who received a $1.26 million fine in early October for illegally posting about EthereumMAX. It’s easy to respond to any pro-crypto argument with a simple observation: many of crypto’s most prominent supporters are now facing legal action.
These newsy items, though, don’t necessarily clarify whether crypto is fraudulent at its core or whether its fraudulent applications have merely been the most public ones. If it’s the latter, is there an avenue for the Left to reclaim it?
The most likely cryptocurrency for such a consideration is Ethereum, which is sometimes associated with the left side of the political spectrum, in contrast to Bitcoin, which is often associated with the Right. (Bitcoin is also the most popular and well-known cryptocurrency, by a long shot.) Whereas Bitcoin is a peer-to-peer payment system seeking to remove money from what a Bitcoin enthusiast would frame as untrustworthy financial institutions, Ethereum was cofounded by programmer and writer Vitalik Buterin, who has become something of a poster boy for a more idealistic, thoughtful wing of crypto — populated with true believers who feel that technology can bring us closer to an optimal society.
Ethereum supporters want us to imagine a world of democratized business, where a small business or individual does not need to pay transaction fees to multiple middlemen and can instead operate without third-party interference. Though a few Ethereum-based projects sound leftist in nature — some creators of decentralized autonomous organizations (DAOs) have theorized modeling themselves after co-ops — Ethereum backers are often uninterested in being lumped in with socialism or the Left in any way.
Their intentions aside, let’s try asking with seriousness: Is there a leftist case for crypto? Helpfully, Ethereum cofounder Buterin has published a book, Proof of Stake: The Making of Ethereum and the Philosophy of Blockchains, in which he outlines how cryptocurrencies represent a “new method of social incentivization” that will offer a new democratic “way to pool together our money and support public projects and activities that help create the society we want to see.”
The book is helpful, but not exactly in the way Buterin thinks. It reveals how Buterin’s case is wholly, shockingly bereft of a political vision to achieve such a society, let alone a vision rooted in the most basic political and moral principles of the Left. If Proof of Stake is any indication of the existing rhetoric and principles from which one could construct a leftist case for crypto, then no leftist case for crypto can be made.
Crypto Discourse in Disarray
For the past few years, the crypto discourse has been one of the least helpful, scammy-on-all-sides locales in all of contemporary society — doubly so if you’re a curious citizen trying to get clear answers about the political underpinnings of crypto and its supporters.
This environment is due in part to political candidates who are increasingly attaching their party’s buzzwords to crypto. Such is the result when some $26 million in donations flow from the crypto sector into the political sector, as it did from 2021 to the first quarter of 2022. While Republicans have generally been more accepting of crypto and backed its deregulation, an increasing number of Democratic candidates are receiving donations and muddying the relationship between these emerging hard-to-understand technologies and their politics.
For instance, in a March 17 op-ed titled “A Liberal Case for Cryptocurrency,” US representative Ritchie Torres (D-NY) argued that crypto could help eliminate the “corporate middleman” and provide “the lowest-income Americans, especially immigrants, more freedom to transfer their own money and send remittances to their loved ones abroad without the burden of long delays and high fees.”
Torres, a freshman member of the Congressional Progressive Caucus and a gay Afro-Latino who grew up in public housing, appears to be an ideal messenger for the crypto industry’s attempted wooing of progressives, in which complexity and technicalities are to be avoided in favor of easy targets like fees and middlemen. Torres does not advocate for Ethereum specifically. Instead, he advocates for the type of world that Ethereum purports to create, asking readers to “imagine a decentralized digital economy where creators from places like the South Bronx can not only collect income from the initial sale of their content but can automatically collect royalties from every future sale.”
Torres’s eagerness to authorize liberals’ acceptance of crypto did not go unrewarded; less than a month after the op-ed was published, he hosted a “Ritchie Torres Ethereum Fundraiser.”
In addition to buying up political views across the spectrum, the crypto sector has successfully squatted on the top internet searches for crypto, which, as a search term, has experienced an incredible spike thanks to recent market volatility. Scores of search engine optimization (SEO)–friendly articles with titles like “Liberals Love Ethereum, Conservatives Prefer Bitcoin” do not present political arguments or educational information so much as oddly numeral-free summaries of survey data intended to meet the high demand for crypto-focused information. Many of these articles conclude with journalistic disclosures that make any discerning reader question what the writer has at stake in promoting their preferred cryptocurrency (“At the time of writing,” this article concludes, “the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA”). These articles may seem small in impact, yet they are regularly republished by YahooFinance, nasdaq.com, and other large outfits that are eager to earn clicks from citizens who are confused and intrigued by this hard-to-define technology.
The ecosystem for crypto education and criticism is rather bleak, then. Leftists mock crypto, whose devotees push leftists away like vegetables. Republicans are inclined to back it, and more and more Democratic politicians will happily tout crypto for a fee. The internet is awash in quickly constructed crypto articles that are then repackaged and redistributed. The result is a clear and growing sense that crypto is anathema to left politics.
Buterin’s book offers a crypto-curious leftist the chance to sink their teeth into something a bit more streamlined and parsable, if not focused. Just since crypto’s rise to mainstream awareness in the past several years, there have already been many books published about the subject, some focused on Buterin’s rise.
But in Proof of Stake, a reader can chart Buterin’s maturation. He has not only written much of Ethereum’s code but also written quite a bit about Ethereum throughout the past decade, becoming one of the main contributors to crypto’s theoretical record.
Buterin cofounded Bitcoin Weekly, then Bitcoin Magazine. Readers need not delve deeply to suss out Bitcoin Magazine’s journalistic standards — its mission plainly states, “We are passionate about Bitcoin.” Buterin has also written extensively on his own site, and Proof of Stake is a collection of his essays, blog posts, and white papers from “across the internet.”
Buterin comes across as relatively likable, in part due to his idiosyncratic personality. But it’s also because virtually every crypto character besides him in a book like Laura Shin’s The Cryptopians is a reprehensible tech bro from a Getty Images photo bank.
He’s also a decent writer, which can go a long way toward building some affection for him. At least, it did for me. I like Buterin. There, I said it.
So, everything seems set up for us to test whether we can assemble a left case for crypto. Proof of Stakes provides a sustained series of arguments about Ethereum’s progressive implications for governance, public projects, and more. The essays take the shape of an autobiography, in which Buterin and Ethereum each mature from highly technical forces into entities that must grapple with the world. The journalist-scholar Nathan Schneider, the book’s editor, operates as a readerly docent; in his introductory remarks, Schneider seems to apologize in advance for the mess Buterin has created: “His ideas will need to be understood — and contested — more widely.”
Some of Buterin’s messy ideas align with what could generously be called a leftist framework. Buterin regularly asserts sentiments like, “I consider Bitcoin’s $600 million/year wasted electricity on proof of work to be an utter environmental and economic tragedy.” When it comes to cryptocurrency’s applications at large, he is unafraid to ask, “Ultimately, what is it even useful for?”
Nor is Buterin bashful about making egalitarian promises on behalf of the technology he has created, as he does in this essay from December 13, 2014: “I believe that we as cryptocurrency developers should be taking advantage of this perhaps brief period in which cryptocurrency is still an idealist-controlled industry to design institutions that maximize utilitarian social-welfare metrics, not profit.”
But seeing these essays strung together is to watch Buterin’s promises crop up across the years without any tangible progress being made on achieving them.
The same wishes from 2014 are still present in 2021, when Buterin writes that, “We should also focus on building better social technologies to fund public goods at the scales that we need, and as a systemic part of our economic ecology and not one-off acts of philanthropic initiative.” There’s no reference to any sort of headway made toward these kinds of public good or welfare metrics.
What emerges in Proof of Stake, then, is not a clearer leftist case for crypto but a clearer sense of Buterin’s essayistic style. The instant a reader wants to hear more about this oft-mentioned equitable world of public goods that crypto can bring us, Buterin scampers back into technical discussions.
The Politics-Shaped Hole in Proof of Stake
Try as he might to keep the conversation about cryptocurrency, real people keep getting in the way. In earlier essays, Buterin sees humans functioning more or less like governable code. In a January 2015 essay, Buterin matter-of-factly dismisses the potential for fraudulent behaviors, arguing that “it is cognitively hard to convincingly fake being virtuous while being greedy whenever you can get away with it, and so it makes more sense for you to actually be virtuous.”
By December 2017, Buterin has been sufficiently ground down by human reality: “More damningly, in practice it seems like people, at least in their capacity as crypto-token holders, are profit maximizers, and seem to see nothing evil or selfish about taking a bribe or two.” Such conclusions are rather obvious when, in the year of the essay, a study showed that 80 percent of initial coin offerings were scams. To Buterin’s frustration, “Issues around bribing, and accidentally over-empowering well-connected and wealthy participants, prove surprisingly difficult to avoid.”
Enter politics — and the massive hole in Proof of Stake where a political framework of any sort could be applied to solve problems. The true value of reading this book is not simply observing the clear and repeated ways in which Buterin and crypto have been unable to deliver on their promises; the value is seeing how the unintentional high priest of (supposedly) leftist Ethereum vibes has a disinterest in — if not disdain for — politics of any sort.
Buterin cringes at the thought of his creations being associated with the political sphere, as in an April 13, 2015, essay, where he says: “We will likely discover that the concept of the ‘blockchain community’ will cease to be meaningful as any kind of quasi-political movement in its own right.” He is so desperate to keep political discussions away from technology that he regularly makes allusions to “recent politics ‘in the real world,’” as though his digital world is immune to such matters.
Time and time again in these essays, Buterin identifies specific human problems related to governance or energy, and every time, he refuses to consider politics as a solution. He describes the crypto ecosystem as “a live experiment comprising many challenges at the forefront of software development, computer science, game theory, and philosophy”; as is the case in virtually the entire book, politics is noticeably absent from his list. That’s because Buterin, like other denizens of crypto, isn’t concerned with political problems or solutions.
You could view Buterin’s approach as a timeworn libertarian trick: remove politics from every scenario, then bask in the regulation-free utopian reality you have created. But Proof of Stake’s point of view is weirder than straightforward libertarianism. Buterin’s 2021 essay entitled “Prediction Markets: Tales from the Election” contains not a single political opinion, unless citing political candidates by name counts as “politics.” Subheadings like “Technical Complexity” and “Capital Costs” outline the processes of deciding whether to bet on political candidates, as opposed to the intellectual, political, or moral processes of deciding to vote or organize on their behalf.
A “Big Tent Movement” Needs Politics, Not Vibes
Perhaps I am granting too much significance to a book that amounts to blog posts strung together, particularly when the author has given interviews elsewhere that offer better distillations of his worldview. It is definitely possible that I am giving too much political weight to Buterin’s thoughts. But given the chaotic, hard-to-wrangle nature of the crypto discourse, there is real value in analyzing this book seriously as a stand-alone record of crypto’s first decade.
Much of the reporting around crypto has concerned quite fraudulent financial behavior, but Buterin’s book demonstrates a different kind of fraud. Proof of Stake charts how many of crypto’s better souls, whether from fear of selling out or nefarious coyness or intellectual laziness, have little interest in voicing a clear political framework — yet they fail to realize that spending years promising social benefits without a political calculus to achieve them is its own kind of fraudulence.
In the introductory language, Schneider notes, “These essays trace Buterin’s evolution from a cyber-libertarian partisan to a pragmatic, big-tent infrastructure builder.” I would amend this line to say that they trace how he attempts to be a big-tent uniter. But do-good vibes alone do not a big tent make. Whether the aim is better currencies or bolstered social welfare spending or more equitable economic policies, a better world is not possible if we bypass the arduous, valuable work of making political arguments rooted in an articulation of political and moral principles.
The most lasting and telling line, then, is when Buterin cogently outlines what he and crypto need. “There is hope,” he writes, “but it takes a lot of hard community building and other grueling non-technical work to get to that point.”
Buterin does not define what grueling nontechnical work means, so allow me to interpret: in this context, such work entails advocating for and negotiating the contours of a moral and political framework for crypto. Simply put, Buterin is either incapable of or uninterested in doing this work in Proof of Stake (or both). Nor has this process been pursued by any other crypto boosters, who, rather than do the grueling work of coalition building, prefer to tell curious skeptics to “have fun staying poor” or that they’re “not gonna make it.”
As it happens, a capacity for grueling nontechnical work is also the precise quality I admire most in organizers and activists, artists and caretakers, social workers and teachers, and my fellow union educators. I love this line about “grueling nontechnical work” from Buterin because it helps me complete my own tidy equation: what is lacking from crypto is the people and activities I tend to admire.
As a writer, Buterin is the perfect embodiment of crypto as we’ve come to know it: he strays from his technical world long enough to look past the convoluted discourse and glimpse the need for a political framework, but then, whether by fright or disinterest, he returns to his comfort zone. He writes with admirable passion and unusual clarity about these technical issues that his technology is confronting, but the result doesn’t add up to anything resembling a leftist case for crypto — most likely because there isn’t one.