It was reckless for Polis to root for crypto
Cryptocurrencies reflect an extreme libertarian vision of anarcho-capitalism.
Thi is associated with different fraud and Ponzi schemes.
They facilitate money laundering and illegal trade.
They are preferred by neo-nazis and domestic extremists.
They are receptive to price manipulation.
They are prone to wild volatility.
ONEand they are a tremendous source of greenhouse gas emissions.
But somehow, none of that has deterred Governor Jared Polis from his cryptocurrency fandom. He is a world class crypto booster that he earlier this year announced during a conference in Denver that Colorado would become the first state to accept crypto for the payment of state taxes and fees.
Polis is notoriously libertarian, and the announcement was tinged with paradoxes — anti-government bias is central to the utopian crypto ideal, but here was the head of state making the case using the debt constituents owe the government.
But whatever ideological tension tainted the gesture, its potential to negatively influence constituents was the real reason it was misguided. Any Coloradans Polis persuaded to buy cryptocurrency almost certainly paid a price.
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Cryptocurrency, including Bitcoin and Ether, is digital money, and cryptocurrency transactions are recorded on a blockchain, which is a decentralized, permanent ledger. Proponents of crypto say how it eliminates the influence of states, whose “fiat” currency such as the dollar is under the unreliable influence of government, and corporations that participate in banking and other financial affairs to the detriment of the individual.
It’s clear why libertarians are getting excited about it, with some critics noting that the genesis of cryptocurrency represented a direct attack on the Federal Reserve and the entire state-sanctioned financial system.
“These are libertarians pursuing what they believe to be perfect ‘Austrian economics’ and dominating the ‘dirty central bankers’ who have ‘corrupted’ money and finance since the Fed was created since 1913,” says journalist Dave Troy. tweeted in November about the “crypto attack on the dollar.” He said crypto activity at the time risked harming billions of people who depend on the stability of the current financial system, including anyone with a 401(k). “A hostile attack by a bunch of libertarian fascists is NOT how democracies attempt to deal with common challenges.”
The far right actually has a deep affinity for crypto.
Troy noted that among crypto’s most visible cheerleaders was far-right Arizona state Sen. Wendy Rogers, a white nationalist ally who has called for the hanging of political opponents, and Christopher Rufo, who led the fake conservative hysteria about critical race theory being taught in schools.
The far right actually has a deep affinity for crypto. The Southern Poverty Law Center’s Hatewatch blog reported late last year that white supremacists were early adopters and have made millions, which “represents a sum that would almost certainly be out of reach for them without cryptocurrency, and it gave them a chance to live comfortable lives while promoting hatred and authoritarianism.” ONE fraction of Americans own crypto, but “Hatewatch struggled to find any prominent players in the global far right who have not yet embraced cryptocurrency to at least some degree.”
Polis became a crypto hero when he was a member of Congress. He and former representative Mick Mulvaney, the South Carolina Republican who later became acting chief of staff in the Trump White House, founded The Congressional Blockchain Caucus. Police once wrote a satirical letter to federal regulators calling for a ban on the physical dollar, which was his response to a call for a Bitcoin ban on the grounds that it facilitated illegal activity.
He wanted to illustrate that it is actually dollars that drug dealers and other criminals prefer to use. Point taken, but that doesn’t take into account the many other reasons why a skeptical approach to crypto is wise, especially by an influential public official like a governor.
Consider its volatility. On February 23 Polis announced through the official governor’s Twitter account that the state would engage a payment provider to accept crypto for state taxes and fees and would be the first state to do so. This was a national story, and it is impossible to believe that such a high-level endorsement did not inspire a significant volume of crypto purchases. Just over a month later, the entire market plummeted. In mid-July, Bitcoin had lost an astonishing 70% of its value, and the grim picture was similar for other cryptocurrencies.
Many people lost a lot of money.
What about Polis himself? According to spokesperson Conor Cahill, when he was still in Congress, Polis once bought $20 in Bitcoin at a crypto ATM, “but he lost the confirmation slip for it soon after and has never directly bought any cryptocurrency since.”
However, the administration has lost none of its crypto enthusiasm. The system to accept digital money for taxes is expected to go live early next month, according to a spokesperson for the tax ministry.
Widespread use of cryptocurrencies in one form or another is probably inevitable, and there is nothing inherently objectionable about digital money itself. It is in crypto exchange, use and creation where the problems arise.
Crypto is minted through a mysterious process called “mining” – miners use computers to solve complex math problems, the reward is new crypto tokens. Mining is energy-intensive, so much so that from the end of last year Bitcoin alone consumed half a percentage point of all electricity used across the globe, with 60% of it fueled by fossil fuels. Bitcoin mining consumes as much electricity as the whole of Thailand, Buzzfeed news reported this year, and more than a third of this energy use occurs in the United States.
The harmful nature of cryptocurrency is not only disastrous for the climate, it also directly counters one of Polis’ stated prioritiesreduction of greenhouse gas emissions.
It would be unrealistic to expect Polis to ignore the rise of crypto and not prepare to accommodate the development. But it is reckless for him to unreservedly champion it as if it were a risk-free alternative to established, stable systems.
