Hi everyone, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Today is April 27th, 2023, and I’m making a video to talk a little bit about my favorite topic—well, not really, but as of late, it has been politics. Good old politics, politics, politics.
For those of you who have followed me for a long time, you know that politically I lean libertarian—not Republican, not Democrat. You know, the same wings of the same bird, but libertarian. I believe in live and let live, maximizing economic freedom, personal privacy, and property rights. This ethos is fairly compatible with the technology we work with and the licenses we operate under because we basically say, "Here’s crypto, good luck," and what you do with it is your prerogative. You’re in charge of it.
This is probably the most libertarian software that anyone has ever conceived for a long time, and it really has no bearing on the political perception, day-to-day regulatory experience, or operations of crypto companies. However, in the last two administrations, particularly the tail end of the Trump Administration and now the Biden Administration, things have gotten exceedingly political with crypto. Many on the left feel that crypto is alt-right. Those are not my words; they are words from The Atlantic, The New York Times, and other opinion leaders. This sentiment is reflected in reports written by and endorsed by the Biden White House and is evident in regulatory enforcement.
Companies are told to come in and register, but they can’t physically do it. This has been acknowledged by the U.S. House of Representatives and all the companies that have tried. There’s an unusually harsh punishment occurring both directly and indirectly. Operation Choke Point 2.0, for example, is quickly removing all U.S. banking access for crypto companies. This is happening, and people are publishing reports on numerous bases. Custodia, a full reserve bank operating completely legally under the law in the state of Wyoming, was given the largest rejection letter in the history of rejection letters by the Federal Reserve when they applied for a master account.
There’s been a lot of misinformation, fear, and lies that have come through unsolicited. The industry is trying its best to comply, and for the most part, the vast majority of the members of the industry are looking for clarity and ways to operate within the integrity and principles of the system. It is not optional. If your intention is decentralization and your intention is to be a free, open protocol for people, then to say that the only way to comply is to be a bank and completely centralize these protocols with a single point of control in the United States— even if you have no U.S. customers and no U.S. business—this is what we’re being told in this industry. It’s very difficult to navigate these waters, and I think, at least on our side, we’ve done pretty well, but for the most part, the industry as a whole is deeply frustrated.
Another thing that’s deeply frustrating to me is that the institutions we rely upon to be independent and objective and to call truth to power are deeply compromised. Those institutions are no longer holding people who are acting unaccountably to account. For example, recently I posted a video mocking President Biden, where he was at a press conference, and a camera was able to get a view of his hand and podium. It showed that the questions he was being asked by the media were already pre-asked and pre-answered. Regardless of your politics, I can’t think of a worse example of media corruption than the fact that the media is working directly with the person they’re trying to hold to account, telling them what they’re going to ask and giving them an opportunity to answer it in the best possible way after the question has been sanitized.
This is not independent media. Unfortunately, the mainstream media in the United States, in particular, has started to take a mocking tone toward cryptocurrencies and the blockchain industry, adopting a very dismissive attitude and parroting whatever orthodoxy has been pushed through. What this does is effectively make it more difficult for this industry to act and operate. I firmly believe that while the protocols should not be political, the use cases of the protocols do end up becoming political because they expose problems with the way things are— the way you vote, the way your money works, the way banks work, the way payment protocols work, the way credentialing works, the way land registration works, the way supply chains work, and the way record-keeping is done. Ultimately, the aggregators who have control over that are the inconvenient truth of the cryptocurrency space.
We actually do have a much better way, for the most part, of governing the things around us. However, the issue is that our mere existence is a threat to the system as it stands today. I don’t really believe that if we had a Republican president, things would be materially different in the United States at this juncture. It is true that while many Republicans are avid supporters of the blockchain caucus, I will remind you that Clayton was the Securities and Exchange Commission chairman responsible for the Ripple enforcement action. While things have gotten more aggressive, there were plenty of people in the Trump Administration, such as Secretary Mnuchin, who were anti-crypto and felt that it had no use case and should be heavily regulated or banned.
We can’t live in a delusion that this is a partisan issue where Democrats hate crypto and Republicans love crypto. There are certainly people on both sides right now, more on the right than the left, especially after FTX, because it appears that the donors associated with FTX leaned left instead of right. It’s a political issue because they can humiliate and embarrass people. For the most part, policy does seem to be moving between authoritarian and non-authoritarian. There are many people, regardless of their political affiliations and beliefs—whether they’re as woke as you can get or as gun-toting conservative as you can get—who would like life to be in their remit. They want to be in control of their life; they want to be self-sovereign; they want a say in their identity, their data, their voice, and their vote. They don’t want to be erased by AI or heartless corporations or an uncaring government.
Those people should not be grouped according to whether their team is red or blue. The reality is we’re all one global group; we’re all humans, and we all want to be treated fairly and with equality. We want to be treated as humans with basic rights and dignity. There is no greater dignity than economic agency when capitalism is king. The reality is that over 3 billion people in the world do not have it. They struggle every day to integrate with our markets. Nation-states at times lack it, especially small countries that are non-BIS members, which have to contend with a small group of central banks mandating their monetary policy and getting caught in the tailwinds of geopolitics.
Just recently, China went to Argentina and got them to start settling Chinese trading in yuan to the dollar. These big deals are two superpowers, the United States and China, fighting each other for the future world reserve currency. The dialogue is wholly unproductive because it just basically says, "Which economic system would you like to be in control of your life?" When we should really be saying, "How do we build a transnational decentralized standard where no one is in control?" That’s the great inconvenient truth of cryptocurrencies: they call truth to power. They’re faceless. Whether I’m here or not, whether Satoshi is here or not, whether Vitalik is here or not, whether Gavin is here or not, it doesn’t really matter. The faces change, the names change, but the philosophy and concepts of freedom and liberty, the philosophy and concepts of self-sovereign identity, decentralization, resilience, being your own bank, and being in charge of your own life—those are the things that endure.
Once people realize that there is a third option between one empire and another, that we can actually evolve as a race and move forward to higher grounds, they start demanding it. The next 20 years are going to be the most transformative in the history of humanity as we stare down the dawn of GPT. We’re taking a look at the ever-advancing technologies that are massively disruptive. The consequences of the internet getting more pervasive, IoT getting more pervasive, and governments starting to understand these tools at a level that they’re using them to control people’s lives—like CBDCs and social credit—will shift us from passive observers of cool and interesting innovations to the recipients of the heavens and hells that they create.
My career for the last 10 years has been about freedom. I’ve spent as much time as a human can spend getting papers written and open-source software developed, trying to teach as many people as possible that freedom is the way and that you should be in control of your own life. You can look no further than the actions of SIP 1694 on Cardano, where we’re literally constructing together a government with a constitution, delegated representatives, stake pool operators, and all kinds of checks and balances through an open deliberative process that will ultimately be approved by all the ADA holders. There are signs this is a microcosm of a desire to change the way things are governed across the world.
I would like to believe that we can converge to a world where we get rid of CEOs, kings, and presidents, and move to a world of decentralization where we have a lot more say and control over how we’re treated, who we do business with, and the conduct and ethics of that business. The only systems that can give you those guarantees are digital systems, and the only systems that can provide those guarantees outside of nation-states are cryptocurrencies and blockchains. Don’t let people fool you into thinking that CBDCs and federated blockchains are somehow equivalent solutions. It’s a poison chalice that, if you take a drink from, you shall never recover from because they are tools of control and domination.
The politics of division, especially in the United States, are done on purpose. The reality is that there is no Republican or Democrat. The party leaders mostly agree on the same things. It’s why they keep doing the same things regardless of who’s in power. Where they disagree are pre-selected wedge issues, which are absurdities designed to be amplified to make you angry and to make you hate people you’ve never met and never interacted with. People that, if you didn’t even know their politics, you probably would get along with and have a beer with at the bar.
The politics of personal destruction and division are very useful to keep all of us in a state of constant fear, anger, hatred, and ultimately fragmentation. Because in division, there is conquest; in unity, there is strength. As Abraham Lincoln said, "A house divided cannot stand," and we are more divided than we’ve ever been. You don’t have to look to your own personal politics to recognize that the media is compromised. The question shouldn’t be, "Well, Trump got this," or "I agree with this, so it’s okay." It should be, "Why?" Because the vast majority of them are owned by a small handful of actors who all get along with each other, and they represent different flavors.
We’ve seen this before in professional wrestling. You had Macho Man Randy Savage, the Hulk, Jake the Snake, and Andre the Giant. They all played their fantasies. We call it kayfabe now. They all knew wrestling was fake, but the rule of the game was you could never admit that it is. That’s what we see today. The politicians in Washington, the vast majority of them, don’t really believe all the things that come out of their mouths. But they say it, and they say it with conviction because just like Macho Man or the Hulk or the others, that’s how the game is supposed to be played. You’re supposed to get angry; you’re supposed to be filled with hate; and you’re supposed to believe in a fantasy that if only your team wins, everything is going to be amazing and better, and we’re all going to be okay.
Real change comes when we have systems that prevent us from being evil. Real change comes when we have systems that can’t be evil by design. When we have systems that mathematically enforce your rights, that’s why the cryptocurrency industry is so dangerous at its core. Because once people realize that truth, they seek nothing but it. They can’t go back into Plato’s cave and think shadows are reality. They realize that the world is a little different, a little bigger, and actually much better.
Because once you live in a world where you can trust institutions and you can’t trust people, you can start loving people instead of hating them. You can start working with people, and even though people are flawed, you can see the best in them. You can see what people are good at. Those people you disagree with—some of them are great woodworkers, some of them are magical painters, some of them play a musical instrument, and if you ran into them at a bar playing it, tears would come to your eyes. Some of those people are good husbands, and some of those people are good mothers. They’ve raised kids; some of them have cancer; some of them are caring for a person with cancer. They live lives that are intricate, deep, and complex, and they have their own pains and problems just like you.
The only reason you seem to hate them or dehumanize them is that a magic box told you to. Somehow, that will make the world better. No, it doesn’t. It just strips you of what makes you human and makes you incapable of the empathy required to elevate humanity to the next level. I firmly believe in a better future, and I do believe we’re going to win. It’s going to take a long road, and we’re going to have to deal with the fact that there are many obstacles.
The last 14 years have been really challenging. If you think about it, we’ve had Bitcoin declared dead probably more than 300 times. We’ve had famous economists like Paul Krugman declare that everything we do is folly and that by tomorrow, people will wake up and realize Bitcoin goes to zero, crypto goes to zero, and everybody will just move on. We’ve had many false prophets try to co-opt things. All we really have to do is be aware of first principles, trust each other, and love each other, but hold each other accountable. The math will get us through.
We also have to learn how to take a timeout. Not everything is political, and not everything should be political. At the end of the day, all we really should ask for is a better tomorrow. So, thanks for listening, and I hope I at least reached a few of you. Cheers!
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