Vitalik: I oppose taking a stance on encryption in the election

Written by Vitalik Buterin

Compiled by Mary Liu, BitpushNews

In the past few years, “Cryptocurrency” has become an increasingly important topic in political policies, and different jurisdictions are considering legislation to regulate various participants in the blockchain industry in various ways. This includes the EU’s Markets in Crypto Assets (MiCA) regulation, UK regulatory efforts on stablecoins, and the complex legislative and enforcement attempts by the Securities and Exchange Commission (SEC) that we have seen in the United States.

In my opinion, many of these bills are reasonable, although some are concerned that the government may try to take extreme measures, such as treating almost all Tokens as securities or banning self-custody Wallets. After these concerns, the weight of the encryption issue is increasing in the political arena, and people almost entirely support them based on whether parties and candidates are willing to be tolerant and friendly to ‘Cryptocurrency’.

This article is about my opposition to this trend, especially the decisions made in this way are likely to violate the values that initially brought you into the encryption field.

In 2018, I sat with Vladimir Putin. At that time, many people in the Russian government expressed their willingness to be “open to cryptocurrency”.

‘encryption’ is not only Cryptocurrency and Blockchain

In the field of encryption, people tend to overly follow the central position of “money” and the freedom to hold and consume money (or, if you like, “Token”) as a secondary political issue.

I agree that there is an important battle here: to do anything important in the modern world, you need money, so if you can prevent anyone from getting money, you can suppress your political opponents at will. The right to spend money privately is equally important, and this is something Zooko Wilcox (CEO and founder of Zcash) tirelessly advocates. The ability of issuanceToken can greatly enhance the ability of people to create digital organizations that truly have collective economic power and take action. However, simply following Cryptocurrency and blockchain is not sustainable, and importantly, it is not the original ideology behind the creation of encryption.

The Cypherpunk movement, which originally created encryption technology, is a broader technological libertarianism that advocates using free and open technology as a way to protect and enhance personal freedom. As early as the 2000s, the main theme was to resist restrictive copyright legislation, which was promoted by corporate lobbying organizations such as RIAA and MPAA, and the Internet referred to it as ‘MAFIAA’. A famous legal case that caused strong public outrage was the Capitol Records, Inc. v. Thomas-Rasset case, in which the defendant was forced to pay $222,000 in damages for illegally downloading 24 songs through file-sharing networks. The main weapons in this struggle were seed networks, encryption, and Internet anonymity, which also made us aware of the importance of decentralization early on.

As explained in one of the very few public political statements made by Satoshi (omitting a lengthy explanation of how the system is vulnerable to being monopolized by force)

“You won’t find solutions to political problems in cryptography.”

Yes, but we can win a big war in an arms race and gain a new free territory within a few years.

The government is good at cutting off centralized networks like Napster, but pure P2P networks like Gnutella and Tor seem to be able to maintain their position.

BTC is seen as an extension of this spirit in the field of internet payments. There is even an early ‘regenerative culture’: BTC is an extremely simple way to pay online, so it can be used to organize compensation for artists’ work without relying on strict copyright law. I participated in it myself: In 2011, when I wrote articles for ‘Bitcoin Weekly’, I developed a mechanism where we would publish the first paragraph of two new articles I wrote, and the rest would be ‘held for ransom’, and when the total amount of BTC donated to the public address reached a specified amount, we would release the content.

The purpose of all this is to place the mindset of creating blockchain and Cryptocurrency in a specific context: freedom is important, and the Decentralization network is good at protecting freedom. Money is an important area where this network can be applied, but it is only one of several important areas. In fact, there are several more important areas that do not require a Decentralization network at all. Instead, you only need to apply encryption technology correctly and communicate one-on-one. The idea that payment freedom is the core of all other freedoms emerged later - cynical people might say that this is an ideology formed to prove the ‘digital rise’.

I can think of at least some other technical freedoms that are as fundamental as the freedom to use encryptionToken.

• Freedom of communication and privacy: This includes encryption messages and anonymity. Zero-Knowledge Proof can ensure the authenticity of important statements while protecting anonymity (e.g., that the message is sent by a real person), so use cases that support Zero-Knowledge Proof are also important here.
• Free and privacy-friendly digital identity: There are already some blockchain applications in this field, and the most worth following are various use cases that allow revocation and decentralized ‘proof of denial’, but the use of hash, signature, and Zero-Knowledge Proof actually takes ten times longer.
• Freedom of thought and privacy: As activities become more and more complex and are mediated through artificial intelligence, this issue will become increasingly important in the coming decades. Unless there are significant changes, the default path is that our increasingly long thoughts will be directly mediated and read by servers owned by centralized artificial intelligence companies.
• High-quality information acquisition: Social technology can help people form high-quality opinions on important topics in the face of adversity. I personally favor prediction market and community notes; you may have different views on the solutions, but the key is that this topic is important.

The above are just technologies. The goals of motivating people to build and participate in blockchain applications usually have meanings beyond technology: if you care about freedom, you may want the government to respect your freedom to have the family you want. If you care about building a more efficient and fair economic system, you may want to look at the impact on real estate, etc.

My basic point is: If you are willing to read the first paragraph of this article, then your involvement in Cryptocurrency is not because it is Cryptocurrency, but because there are deeper fundamental goals. Do not just support Cryptocurrency itself, but support those fundamental goals and the entire set of policy implications they imply.

As of today, the current ‘support encryption’ initiative does not think so.

StandWithCrypto tracks ‘key bills’. It does not attempt to judge the freedom of politicians in technical areas beyond cryptography and cryptocurrency.

If a politician supports your freedom of currency transactions, but doesn’t mention the above topics, then their fundamental thought process on supporting freedom of currency transactions is completely different from mine (and possibly yours). This in turn means that they are likely to come to different conclusions on issues that you will care about in the future, which carries a high risk.

encryption and internationalism

ETH Gas Station Chart, Source ethernodes.org

A social and political cause that many Cypherpunks, including myself, have always cherished is internationalism.

Internationalism has always been a key blind spot in the politics of national egalitarianism: they formulate various restrictive economic policies in an attempt to ‘protect workers’ domestically, but they often ignore or do not follow the fact that two-thirds of global inequality is between nations rather than within nations. Recently, tariffs have become a popular strategy to protect domestic workers; unfortunately, even if tariffs succeed in achieving this goal, they often come at the expense of the interests of workers in other countries.

The emergence of the internet has solved a key aspect: theoretically, it does not differentiate between the richest and the poorest countries. Once we reach the point where the majority of people worldwide have basic internet access standards, we can have a more equal global digital society. Cryptocurrency extends these ideals to the world of money and economic interaction. This has the potential to greatly promote the flattening of the global economy, and I have personally seen many cases that have already been realized.

But if I care about ‘encryption’ because it benefits internationalism, then I should also judge politicians and their policies based on their level of concern for the external world. I won’t list specific examples, but it should be clear that many of them have not met this standard.

Sometimes, this even has to do with the ‘encryption industry’. Recently, I received a message from a fren who is long, telling me that they could not come because obtaining a Schengen visa has become more difficult. When deciding on the location of events such as Devcon, the availability of visas is a key issue; the US is very unfriendly in this regard. The encryption industry is a uniquely international industry, so immigration law is also part of encryption law. Which politicians and which countries recognize this?

Being friendly to Cryptocurrency now does not mean being friendly to Cryptocurrency five years from now.

If you find a politician who is friendly towards Cryptocurrency, one thing you can do is look at their views on Cryptocurrency itself five years ago.

Similarly, look at their views on encryption and other related topics five years ago. In particular, trying to find a topic that is inconsistent with ‘supporting freedom’ and ‘supporting companies’; the copyright war of the 21st century is a good example. This can well guide their views on what kind of changes may occur in the next five years.

The Divergence between Decentralization and Acceleration

One way of divergence is when there is a divergence between Decentralization and acceleration. Last year, I conducted a series of opinion polls, mainly asking people which one they value more in the context of artificial intelligence. The results obviously favor the former:

In general, regulation is harmful to Decentralization and acceleration: it makes the industry more centralized and slows down its development. Many of the most harmful encryption regulations (‘mandatory KYC everything’) are certainly moving in this direction. However, these goals are always subject to differences. For artificial intelligence, this may have already happened. The Decentralization-centric AI strategy focuses on smaller models running on consumer hardware, avoiding the dystopia of privacy and centralized control, in which all AI relies on centralized servers that can see all of our actions, and the biases of these server operators shape the output of AI in a way that we cannot escape. One advantage of a strategy centered around smaller models is that it is more favorable to AI security, as smaller models are inherently more limited in capability and more likely to be tools rather than independent agents. At the same time, the acceleration-centric AI strategy is enthusiastic about everything, from the smallest micro models running on microchips to the $70 trillion model in Sam Altman’s dream.

To my knowledge, we haven’t seen such a big divide in the cryptocurrency space yet, but one day we may very well see it. If you see a politician today who supports cryptocurrencies, it’s worth exploring their underlying values to see which side they would prioritize if a conflict did arise.

What Does ‘Cryptocurrency-friendly’ Mean to Dictators

Dictatorial governments generally have a “cryptocurrency-friendly” approach, which is worth noting. As expected, the best example is Russia.

The recent Russian government policy on Cryptocurrency is very simple, including two aspects:

When we use encryption, it can help us avoid restrictions from others, which is good.

When you use Cryptocurrency, it’s much harder for us to restrict or monitor you, or to put you in prison for 9 years for donating $30 to Ukraine, which is terrible.

The following are examples of various actions taken by the Russian government:

Another important conclusion is that if a politician supports Cryptocurrency today, they are either the kind of person who is very power-hungry, or they are willing to flatter those who are power-hungry, then this is the direction of their advocacy for Cryptocurrency ten years later.

If they or the people they flatter really consolidate power, this is almost certain to happen. Also, please note that the strategy of closely associating with dangerous actors in order to ‘help them become better’ often backfires.

If you say, ‘But I like [a certain politician] because of their entire platform and views, not just because they support Cryptocurrency!’ Then why shouldn’t I be enthusiastic about their Cryptocurrency stance?

Political games are much more complex than ‘who can win the next election’, and your words and actions will affect many factors. In particular, by publicly leaving the impression that you support candidates who ‘support cryptocurrency’, you are helping to cultivate a so-called ‘incentive gradient’, which makes politicians feel that all they need to do to gain your support is to support ‘cryptocurrency’, and all they need to do is to ensure that you can easily trade tokens, regardless of whether they also support banning encryption messages, whether they are power-hungry narcissists, or whether they are pushing for bills that make it harder for your Chinese or Indian friends to participate in the next cryptocurrency conference…

Whether you are someone who is ready to donate millions of dollars, someone with millions of Twitter followers ready to exert influence, or just an ordinary person, you can help create more respectable incentive gradients.

If a politician supports Cryptocurrency, the key question is: whether their reasons for supporting Cryptocurrency are correct?

Do they share the same vision as you for the development of technology, politics, and economy in the 21st century? Do they have a positive vision and go beyond short-term concerns such as ‘crushing other bad guys’?

If they are, that’s great: you should support them and explicitly state that this is the reason you support them.

If not, either completely stay out of it or find a better power to ally with.