Originally published in The Hill on August 18, 2018.
While some say crypto is apolitical, others argue a technology that takes direct aim at central bank-driven monetary policy can't be anything otherwise.
Indeed, many early adopters were drawn to bitcoin's revolutionary potential and there has long been a close association between libertarianism and cryptocurrency. CoinDesk Research took the opportunity to test this association in our Q2 State of Blockchain Sentiment Survey. The questions were aimed, in part, at discovering the political leanings of the cryptocurrency community as they relate to the technology in general, as well as to specific coins.
The findings were surprising. There has been scant research on political preferences. This is the first time we have put the rumors to the test. It resulted in discovering some interesting bedfellows within the crypto world.
The more than 1,200 crypto community respondents broke down to 8 percent anarcho-capitalists, 24 percent libertarians, 21 percent conservatives, 9 percent centrists, 27 percent liberals, 9 percent socialists and 3 percent nihilists. While liberal came out as the largest single category, if you combine libertarian and anarcho-capitalist, they outnumbered the liberals by 5 percentage points.
These identifications were chosen to best capture distinctive world views. For example, libertarians can be statists (i.e., they may advocate limited government, but not necessarily the abolition of all government) whereas the anarcho-capitalists want to end the state outright.
After combining categories into our composite of the left vs. right spectrum, we observe that 52 percent of the crypto community are right-wing and 45 percent identify as being on the left. While ideologies on the right appear to make up the majority, it's not as wide a majority as you might expect.
Considering crypto's origins and reputation, it's fascinating that the left makes up such a substantial minority. Two factors could explain why these results deviate from commonly-held conceptions: time and crypto partisanship by coin (or coin tribalism).
Anecdotally, libertarians made up the overwhelming majority of early crypto advocates and thus the archetype stuck with the general movement. Since then, many more people have come into the crypto world drawn by rising prices and without such strong political views.
Fifty-five percent of Q1 survey respondents started actively following crypto in 2017. These people could be motivated by politics, but more likely came in to make money and thus held views closer to that of the general population.
Ideology across cryptocurrencies shows incredible variety. Our survey results found that certain political ideologies clustered around particular coins. Bitcoin most closely resembles the general population, while other cryptos take their own unique formations. Ethereum seems to have the highest percentage (55 percent) on the left while dash contains the highest concentration on the right (78 percent). XRP clusters towards the center, while monero inversely nurtures the extremes at both ends of the spectrum while also taking the mantle for highest percentage of anarcho-capitalists (36 percent).
Cryptocurrencies are potentially one of the next great technological revolutions. The uniqueness of this sector is that many of the leading software developers and business operators have political views not in line with the general population.
These crypto leaders don’t just want to supply you with a novel app, they want to stir revolutions. These revolutions center around disrupting the central bank monopolized monetary system, on which all modern economies rely. Imagine if some of the major household businesses had individuals fomenting radical ideas yet still were able to attract investor and customer dollars upon first getting started.
While we see increased levels of liberal representation, it’s possible those newcomers will be dissuaded from utilizing further or find ways to push out extremist elements. If so, the original intention of a decentralized sound money could be sidelined for Silicon Valley's next consumerist app, Wall Street's next derivative database, or Washington's facelift on monetary policy.
Thus there’s a coming conflict between the original crypto radicals and the new blockchain conformists. The cryptocurrency sector will most likely split between projects backed by each group with increasing levels of animosity towards the other.
The radicals will see the conformists as saboteurs who compromise core tenets such as uncensorability and decentralization. The conformists will see the radicals as naive or even nefarious agents of chaos tacitly condoning illegal activity that will ruin any hopes of mainstream adoption.
The conformists have already begun to sanitize crypto through developments like the New York BitLicense, which prohibits crypto companies from operating in the state unless complying with and more importantly being granted the privilege by the government. Other similar regulatory efforts are in the works and mainstream media will highlight “the right” companies going forward.
The average investor needs to be aware of the people behind these products and services. Perhaps this will become easier to delineate through coin tribalism, so as not to mix with one’s out-group. Different sides will choose a coin that best comports with their ideas and goals. Over time, investment decisions will have to be made around criteria such as too revolutionary or not revolutionary enough.