Reflection: The encrypted story at the crossroads and the middle road in the future

Note: The original text comes from deribit. In this article, the author Benjamin Simon reflects on the recent U.S. infrastructure bill vote. He believes that the deadlocked infrastructure bill marks a new chapter in the crypto story in many ways, and is committed to People who have been successful in crypto for a long time should openly talk about the philosophical differences, instead of hiding them behind obscure technical debates, as we often do.

In addition, he also said that what we ultimately need to do is not only to understand this basic conflict and its many manifestations, what we need is a middle way.

Earlier this month, crypto assets (in interesting but somewhat sad ways) disrupted American politics.

The Senate was almost ready to vote on a trillion-dollar infrastructure bill, but a clause that suddenly appeared at the last minute greatly expanded the reporting requirements for non-custodial crypto practitioners (including miners and node operators). A small group of active encrypted native DC watchers caught this change and acted quickly. In a week, the leaders of the crypto industry and a handful of powerful CEOs and entrepreneurs lobbied Congress to amend the bill.

Although the results were disappointing (the initial terms ultimately prevailed), the process was compelling. The commotion caused by the amendment finally forced the Senate to postpone the final vote on the bill for several days, which also included a new crown epidemic relief plan.

In any case, what was once a fringe team composed of techno-futurists, anarcho-liberals, and recovering “poker players” has evolved into a political crushing ball, and Crypto has dragged the U.S. legislative system into an emergency brake. .

Crypto’s changing spirit

The importance of this series of events has not been ignored by anyone. The Wall Street Journal: ” Bitcoin Fans Suddenly Become a Political Force”, The Washington Post: “How Crypto Became A Powerful Force in Washington” and ” Politics: “Washington is aware of the impact of Crypto in the infrastructure battle” and other media reports, announcing a new chapter in the crypto industry.

However, apart from the attention of the outside world and the noise of the media, does this landmark moment have a deeper meaning? The deadlocked infrastructure bill seems to have completely changed the public’s perception of crypto and its power. But more fundamentally, it reveals the evolution of crypto’s own spirit.

Since its emergence, a common thread has linked different parts and subgroups of crypto: a differentiated identity and a conscious separation from pre-existing institutions (whether political, economic, financial, or cultural). Bitcoin was born after the 2008 financial crisis, and it was originally used as a substitute for sovereign currency. Ethernet Square vivid vision behind (and still is) a global network of Silicon Valley technology giant to get rid of feudal rule. And DeFi has developed into a parallel, basically self-enclosed financial system. Even the most successful cultural and artistic crypto projects (such as cryptopunks) have clearly and consciously broken the rules.

Of course, despite the prevalence of separatism, the crypto industry has seen various attempts to reverse this trend and accommodate traditional institutions (remember “blockchain, not Bitcoin”?). But so far, these attempts have been largely a footnote to the crypto story — a story written by individuals and movements with utopian and sometimes revolutionary ambitions.

The deadlocked infrastructure bill marks a new chapter in the crypto story in many ways. In the past ten years, it has been impossible for the entire industry to engage in political lobbying activities at any time-not only because crypto is powerless, immature, and crude, but I think because for most of the decade, there is There is a strong separatism and an undercurrent of disengagement.

This initial spirit has begun to weaken, and the (unofficial) leadership changes have largely proved this. Over the years, weird futurists, weird programmers, and unstable CEOs have competed for the position of bearers of industry standards. And now, including US senators, hedge fund tycoons and taciturn technology billionaires seem to be shouldering a heavy responsibility.

Before our eyes, crypto is undergoing a significant process of institutionalization and even de-radicalism.

crypto stands at the crossroads

This trend is hidden behind the vague concept of “mainstream adoption” that everyone seems to accept. However, it has opened up, or at least widened a key ideological rift.

When El Salvador announced the use of Bitcoin as legal tender, this move won enthusiastic applause from crypto supporters. But when the details of the proposed legal change surfaced, this enthusiasm began to break down. Many Bitcoin enthusiasts sounded the alarm when they learned that the Salvadoran government would require business owners to accept Bitcoin as a payment method under the new law. In the ensuing legal debate, two camps emerged. In one corner stood revolutionary idealists. They believed that the mandatory provisions of the law run counter to the core ideals of Bitcoin’s personal sovereignty and freedom of choice. On the other hand, there are conservative pragmatists. They admit that any state-level government adopts Bitcoin, it will inevitably involve some kind of ideological compromise.

This fragmentation is also obvious elsewhere in crypto. In June, the Harvard Law School Blockchain and Fintech Initiative (HLSBSI) submitted a proposal on Uniswap ’s governance forum, requiring the withdrawal of 1 million UNIs (valued at US$25 million) from the agreement treasury library for DeFi political lobbying activities . In response, many members of the Uniswap community expressed opposition, believing it was a misleading and self-defeating move. In dYdX after the United States announced that it would crypto users blacklisted for retroactive tokens dropped, there have been similar situations. Some people are angry that the “decentralized” agreement will succumb to legal restrictions, while others have expressed appreciation for compliance with regulations.

What I am describing here is not at all the familiar quarrel between the crypto camp, which is commonly known as “toxic maximalism”. On the contrary, this is a split that goes beyond tribal loyalty and touches the core of the ultimate goal of crypto: should crypto strive to create a new system that is not hindered by the outdated structure of traditional society, or should it adopt a more relaxed approach to mainstream political, economic and cultural institutions .

For most of the crypto’s life, it has never really faced this dilemma. In the early days, even in the craze of the 2017-2018 hype cycle, crypto was basically a fringe movement. True believers stick to it passionately, skeptics see it as fantasy, and opportunistic speculators come and go. But now, after a period of impressive growth, crypto is at the crossroads between further institutionalization and a renewed commitment to the utopian ideal of separatism.

This dilemma is not just theoretical. Should crypto have an organized political lobby? Should Bitcoin supporters work directly with the central government to increase adoption? Should the DeFi agreement treat banks and financial institutions as potential partners, rather than rivals? Should crypto native artists, curators and cultural venues collaborate with their mainstream peers? Or should crypto reject ideological compromise, avoid institutional adjustments (whatever it is), and return to its revolutionary roots?

How to pursue change?

This dilemma may be new to crypto (or if not new, at least it is more relevant now). But in general and historically speaking, it is not new at all. In this regard, we should not be surprised by the dilemma that crypto is facing now.

For centuries, emerging ideological movements with aspirations to change the world have been dealing with the same challenges. Radical political groups always strive to maintain their revolutionary spirit after gaining power. Religious factions disagree on whether their followers should pursue a life of virtue in isolation in a closed community, or whether they should contact the material world to promote it (even at the risk of diluting the core values ​​and practices of religion). Very big.

Regarding crypto, this dilemma seems to be just a compromise between ideal and reality. Under this framework, both parties in the dispute believe that, in principle, crypto should adhere to utopianism as much as possible. The next question is, in practice, to what extent idealism must be sacrificed for the survival and prosperity of the industry. This framework implies an assumption that there is no inherent value in dealing with traditional structures and institutions. A truly independent utopia is desirable, but it is difficult to achieve. It requires concessions to reality.

However, this method of defining the dilemma as utopianism and a slightly practical utopianism ignores the third fundamentally different approach. What if the utopian impulse is not only impractical in practice, but also undesirable in principle? What if contact with traditional institutions is actually commendable, not just a concession to reality? In short, what if crypto should not strive to become a revolutionary movement, but a reform movement?

These questions will definitely annoy ordinary crypto supporters, but they also help us grasp the core of the problem, because ultimately the problem at hand is not only related to one’s perception of crypto, but also related to the world that crypto aspires to change.

For example, if we believe that a nation-state with a sovereign currency is fundamentally incompatible with freedom, or that financial institutions and banks have rotted to the core, then we will not have the patience to compromise. But if our traditional political, economic, and cultural institutions have some wisdom and value (although they often let us down), then there are some things in them that are worth keeping, and crypto should not become an isolated system.

Middle way

What I want to say is that the ideas of revolution and reform are both valuable.

In the revolutionary approach, there is a broad vision, dissatisfaction with the status quo, and creative anger. These are especially beneficial to the early development of crypto, as they attract individuals who are willing to invest a lot of energy and resources in fringe movements.

In the view of the reformists, there is a certain amount of humility and gratitude. They admit that complex systems are difficult to build from scratch. As a great reform philosopher once said, the task of the reformer is to strike a delicate balance between the two principles of conservation and revision. For crypto reformers in particular, this means working to make the political system more free, the financial system more fair, and the cultural system more democratic – but not completely abolishing the system.

Needless to say, these duel philosophies of change and progress are not easy to reconcile. Those of us committed to the long-term success of crypto should realize that this conflict is often at the core of many of the value-loading trade-offs that crypto must make. At least as a first step, we should talk about these philosophical differences publicly, rather than hiding them behind obscure technical debates, as we often do.

But what we ultimately need to do is not only understand this basic conflict and its many manifestations, what we need is a middle way.

In fact, throughout history, the movement to find this middle way has failed. In the decades after the American Revolution, federalists and anti-federalists debated the sustainability of the post-war government system (federal clause). Federalists advocate the establishment of a stronger governance structure, although they realize that doing so may partly undermine the revolutionary spirit of freedom. The anti-federalists oppose any downplay of the ideals of nation-building. After years of debate, the Constitution, which was finally approved in 1787, made the necessary changes to the country’s shaky political system, but it also retained the core values ​​of the revolution in its powerful Bill of Rights. In this critical early stage, the United States managed to find a middle way.

And now, crypto must do the same, we cannot give up the core revolutionary spirit, because without it, crypto will lose its guiding identity. But the deep-rooted separatism that prevailed for most of crypto history no longer holds up. Direct contact with groups and institutions that disappoint us is not a sign of weakness, but a sign of strength.

The middle road between revolution and reform, utopia and reality, separation and cooperation is not easy to follow, and it is not very clear, but it is a road that must be taken.


Posted by:CoinYuppie,Reprinted with attribution to:
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