This week in crypto. Feb 7-13: Role of crypto in political conflicts, BAYC founders revealed and more...
Role of crypto in political conflicts
Politics is not an easy topic: our opinions are shaped as much by the facts (which themselves could be misinterpreted), as they are by our emotions.
We at D.Center prefer to not give any specific opinion on politics, except for one: personal freedom is key to help our societies evolve and make sure everyone’s voice is heard.
That’s not surprising for a crypto-focused company, for crypto is one of the tools of achieving personal freedom: by allowing to transfer values without permission or censorship it can change lives.
Crypto is also apolitical, which explains its growing use in all kinds of political confrontations… but as political opinions are often disputable, so is crypto’s involvement.
Crypto in national politics
Crypto has been acclaimed as fundraising tool for the government opposition in Russia (Navalny’s Anti-Corruption foundation) and Belarus (Bysol).
Myanmar’s shadow government (supporting imprisoned Aung Sang Suu Kyi) declared the dollar-pegged stablecoin Tether as official currency for local use, hoping that it would assure people’s funds against seizure by the military regime currently in power.
Afghanistan’s NGOs use crypto donations to help starving people with food and medicine, while fiat donations are notoriously hard to pass through sanctions-fearing banks and the Talibans.
🍁 Crypto is also an alternative for the “Freedom Convoy” – a Canadian demonstration against the government’s vaccine mandate launched by truck drivers. It has blocked Ottawa and sparked numerous controversies, with some people calling it a freedom of choice activism, and others – a vehicle for conspiracy theorists and far-right supporters. The movement’s fundraising via GoFundMe and GiveSendGo was frozen (read more on this here), which pushed the donors to turn to crypto, with several Bitcoin and Bitcoin Cash fundraisers currently active.
Unlike previous examples of crypto use in politics, widely considered as “good”, Canadian truckers are controversial to say the least. If the protestors disturb the lives of Canadians, resort to violence, and then exhibit far-right views or other nonsense… does it make crypto used to fund it “bad”?
If so, shouldn’t crypto be banned and the government take control over money transfers (hello CBDCs 👋) ? And then, what if another protest against the government policy sparks, will it be allowed to grow and become a revolution, or nipped in the bud by cutting off funding?
We believe that if the truckers act violently and only cause hardship to the Canadian citizens, the police should put them in jail or send them home. It would be only fair, and if the truckers really represent the minority of Canadians, as many medias affirm, police operations should happen seamlessly.
What’s not fair, however, is to use the government’s power over the payment processors to cut off funding.
Crypto in international politics
If you think national politics is hard, try international one 😅
One of the most discussed geopolitical issues now is Ukraine, which is believed by some to be the target of an imminent Russian invasion : Russian troops have been conducting military drills near Ukrainian borders for a couple of months already. Despite some claiming that war rumours are fabricated, Russia annexing Crimea and triggering war in the Ukrainian region of Donbas in 2014 (still ongoing) does not help in staying positive on this whole thing.
Crypto is now widely used by the Ukrainian volunteer groups that are helping the country’s military. Groups like Come Back Alive (providing military equipment, training services and medical supplies), Ukrainian Cyber Alliance (cyberattacks against Russian propaganda websites), Belarusian Cyber-Partisans (friendly hackers from Belarus who notably attacked Belarusian railways to disrupt Russian troops’ transfer near Belarusian-Ukrainian border) and Myrotvorets (intelligence service aiming at detecting Russian mercenaries and propagandists) have gathered over $500M in Bitcoin in 2021. Even if Myrotvorets, like all intelligence services, is somewhat controversial, so far this looks like a “good” crypto use case 😇
Crypto was also used on the other side. Pro-Russian separatists from Donbas have already raised crypto donations to maintain military actions against the Ukrainian Army, as did Igor Girkin, Russian army veteran and FSB officer who led troops into Ukraine and participated in the siege of the Eastern Ukrainian city of Sloviansk (he was also charged by Dutch prosecutors for murder in the shoot-down of Malaysia Airlines Flight 17). This crypto use case is most likely to be qualified as “bad” 👿
So how can we understand whether crypto is good or bad for when it comes to politics? Should it be banned (imagine if it were possible), so that no “bad” use cases could make it, or should it be encouraged, so that the “good” ones thrive? And what if what we consider “good” is actually “bad” for another person – who gets to decide?..
A neutral tool
National or international conflicts are often too complicated to be judged by a party with the power of cutting off the funding. Often times, whoever controls the banking system also has their skin in the game, be it a government concerned of keeping its power, or an international player pursuing its own goals. As Russian poet Griboedov’s character from Woe from Wit famously said: “Who are the judges?”
In the absence of any means of funding an opposition has no chance of gaining ground, a protest has no change of getting traction, a less powerful or well-connected side has no chance of fighting… and in the end of the day the society has no chance of evolving.
Bitcoin is just lines of code run by thousands of computers dispersed across the globe. It dispassionately accomplishes its mission to allow any person on the planet to transfer value to any other person. It is independent, which makes it a perfect tool for defending personal freedom – whatever it means for different people.
And what if a crypto-funded conflict becomes violent?
Then police, military, and international diplomacy take care of it to the best of their abilities, and the winner will be writing history. For the good or for the bad, this will be the expression of people’s will.
And what about terrorists? They are most obviously evil. Should they get their funding too ?
Terrorists are conceptually different from open protestors because they strike from the shadows, killing innocent people who may have nothing to do with any conflict.
Curiously enough, crypto might be helpful in this case too – in tracking terrorist funding. Blockchain is transparent, and as experience shows, crypto transfers are not so difficult to follow provided the right means (in any case easier than trying to get through the labyrinth of siloed banks, offshore trusts and other fancy financial structures that are so good at hiding money trail). Just ask the couple who tried to launder crypto from the Bitfinex hack. So from the moment a person or an organization is considered criminal, it is possible to track its crypto dealings. Then it’s the work of law enforcement.
We strongly believe in personal freedom and everyone’s right to express themselves. When access to money is centralized, such expression could be difficult to realize. Bitcoin fixes this.
*Disclamer: while D.Center is a French company, the author of this Newsletter is Ukrainian, which, despite all her efforst at keeping a neutral approach, could transpire in the text.
NFTs and Metaverse
Bored Ape Yacht Club is a formidable example of NFTs leveraged to form a vibrant community. It is also a business potentially worth $5Bn - if the talks between venture capitalists from Andreessen Horowitz and Yuga Labs, BAYC creators, are a success.
Despite a worldwide fame, until this week the four founders of Yuga Labs stayed anonymous, which somewhat contributed to the magic of BAYC and its narrative putting Ape avatars before the humans owning them. The mystery is (partially) over now.
A Buzzfeed journalist has doxxed (crypto talk for revealed) two of Yuga Labs founders: Greg Solano (aka Gargamel), a 32-year-old editor and book critic, and Wylie Aronow (aka Gordon Goner), a 35-year-old part-time day trader and also a literature enthusiast, both American nationals. Yuga Labs itself is a company incorporated in Delaware.
Revealing of true identities behind BAYC caused a backlash from the crypto Twitter, where many prefer pseudonyms and NFT avatars, valuing personal freedom above the public recognition. Now that it’s done, however, there’s a number of ways Yuga Labs can use their founders’ identities to develop more awareness and buzz.
Markets
Bitcoin
Continuing last week’s rise, Bitcoin price marked a local top of almost $46k on Thursday and has since corrected to $42k.
Big news of the week was Russia intending to regulate crypto and liken it to a foreign currency, which could boost its adoption both on the national and international levels.
In the meantime, crypto companies continue to raise huge amounts of money: VC investments keep pouring into the space, helping create the basis of the Web3 economy.
Ethereum
Ethereum price followed Bitcoin’s pattern, ending the week at the $2’850 level.