1/ On America and crypto
There is no more natural home for crypto than the United States of America.
There is no more natural strategic weapon for the United States of America than crypto.
The USA has never gone wrong betting on freedom and things are no different this time.
There is no more natural home for crypto than the United States of America.
There is no more natural strategic weapon for the United States of America than crypto.
The USA has never gone wrong betting on freedom and things are no different this time.
2/ First, let's knock out the major alternatives:
❎China: Non-convertible currency, top-down 'social credit' system of integrated control
❎Russia: Would like to be China
❎EU: Blissfully unaware that technology matters
❎India: @balajis fighting hard but tough battle
❎China: Non-convertible currency, top-down 'social credit' system of integrated control
❎Russia: Would like to be China
❎EU: Blissfully unaware that technology matters
❎India: @balajis fighting hard but tough battle
3/ Now, let's knock out the rest
❎Switzerland: Zug is cool, but ant-sized
❎Singapore: Same
❎Dubai/UAE: Same
❎UK: Theoretically interesting, but busy running out of crisps or whatever these days
❎Nigeria: Hates it
❎Brazil: Unaware of crypto's existence
❎The rest: Come on
❎Switzerland: Zug is cool, but ant-sized
❎Singapore: Same
❎Dubai/UAE: Same
❎UK: Theoretically interesting, but busy running out of crisps or whatever these days
❎Nigeria: Hates it
❎Brazil: Unaware of crypto's existence
❎The rest: Come on
4/ The USA is, on the other hand, is swole
✅Largest economy
✅Strongest military
✅Largest tech industry
✅Largest financial industry
✅Largest media industry
✅Deepest capital markets
✅Convertible reserve currency
✅Unending consumer market
✅Largest economy
✅Strongest military
✅Largest tech industry
✅Largest financial industry
✅Largest media industry
✅Deepest capital markets
✅Convertible reserve currency
✅Unending consumer market
5/ The USA has something else too.
It has a fundamental belief in freedom from the state and a healthy distrust of the infallibility of the state
✅Boston Tea Party
✅Constitution
✅Bill of Rights
✅Decentralized system of governance
It has a fundamental belief in freedom from the state and a healthy distrust of the infallibility of the state
✅Boston Tea Party
✅Constitution
✅Bill of Rights
✅Decentralized system of governance
6/ Has the USA deviated from these ideals? Sure, many times. It is the worst state in terms of freedom, EXCEPT for all the others.
Take two examples (one for each political persuasion), the First and Second Amendment.
There is nothing like this in any major power.
Take two examples (one for each political persuasion), the First and Second Amendment.
There is nothing like this in any major power.
7/ The First Amendment is a unique, extraordinary devolution of rights to the citizens
There are very few countries where you can "say what you want on practically any topic" without fear of arrest
& what countries pay a price like the USA does in service of 2nd Amendment?
There are very few countries where you can "say what you want on practically any topic" without fear of arrest
& what countries pay a price like the USA does in service of 2nd Amendment?
8/ The system of governance is also quite decentralized.
The USA is a federation, something not fully understood outside the USA, with a massive number of states' rights
And, within states, there is further decentralization like local schooling.
The USA is a federation, something not fully understood outside the USA, with a massive number of states' rights
And, within states, there is further decentralization like local schooling.
9/ In other words, the United States has all the ingredients to lead the web 3.0 revolution:
✅Financial and technological muscle
✅World class creative industries
✅A belief that its people shouldn't be micro-managed by a centralized set of governmental employees in the capital
✅Financial and technological muscle
✅World class creative industries
✅A belief that its people shouldn't be micro-managed by a centralized set of governmental employees in the capital
10/ So what is going wrong? I mean the USA is the center of global crypto, but it is a grind.
The relationship between crypto and Washington DC is all tension.
The positioning is all defensive.
"What are all the things that can go wrong and how can we control them"
The relationship between crypto and Washington DC is all tension.
The positioning is all defensive.
"What are all the things that can go wrong and how can we control them"
11/ I think the first issue is the generally unexamined growth of AML/KYC measures.
AML/KYC is an important topic but it is just a series of regulations, nothing more.
They should be subject to cost-benefit analysis and subordinate to constitutional rights.
AML/KYC is an important topic but it is just a series of regulations, nothing more.
They should be subject to cost-benefit analysis and subordinate to constitutional rights.
12/ The second issue, similar in nature, is the "securities law-ization" of literally everything.
@matt_levine discusses this in a public markets context, that all types of things are now indirectly regulated as securities laws violations even if they may not be directly illegal
@matt_levine discusses this in a public markets context, that all types of things are now indirectly regulated as securities laws violations even if they may not be directly illegal
13/ The same thing is happening in private markets.
The current regime is woefully inadequate for web 3.0 business models.
If you try to return value to users, you risk breaking the law. The only safe choice legally is to keep all the value to yourself.
Odd.
The current regime is woefully inadequate for web 3.0 business models.
If you try to return value to users, you risk breaking the law. The only safe choice legally is to keep all the value to yourself.
Odd.
14/ The net effect of the Howey Test in a web 3.0 context is to lock in the web 2.0 firms like Facebook.
The way to reduce Facebook's power is not to call Mark up to yell at him in Congress.
It is to let people build economically incented community-based alternatives to FB
The way to reduce Facebook's power is not to call Mark up to yell at him in Congress.
It is to let people build economically incented community-based alternatives to FB
15/ The third issue is the deep national security state believes it has organized the world nicely right now.
In other words, the view is that the USD rails/correspondent banking around the world are a point of serious strategic control.
In other words, the view is that the USD rails/correspondent banking around the world are a point of serious strategic control.
16/ This is a complex issue because they are not wrong.
The USA currently might be at its point of maximum control of the infrastructure of the global financial system.
The question is "is this sustainable?" or will progressively others (see: China) build their own rails
The USA currently might be at its point of maximum control of the infrastructure of the global financial system.
The question is "is this sustainable?" or will progressively others (see: China) build their own rails
17/ The fourth issue is that the communication from crypto field is incoherent and, sometimes, nuts.
From "we will replace the dollar" to "all crypto is going to go offshore" to "here are 439 detailed regulatory recommendations", it is impossible to find fundamental principles
From "we will replace the dollar" to "all crypto is going to go offshore" to "here are 439 detailed regulatory recommendations", it is impossible to find fundamental principles
18/ My view is that progressive consolidation of our digital lives in a handful of firms in Silicon Valley is deeply unAmerican.
We did not fight for centuries to increase the scope of our freedom, to hand it all back to some new industrial conglomerates.
We did not fight for centuries to increase the scope of our freedom, to hand it all back to some new industrial conglomerates.
20/ On the geopolitical front, Washington has to think offensively, not defensively and be more bold.
China can and will replicate rails of control.
China cannot function in a web 3.0 model in its current system.
The analogy I think about is the internet in the 1990s
China can and will replicate rails of control.
China cannot function in a web 3.0 model in its current system.
The analogy I think about is the internet in the 1990s
21/ The internet pressured a very centralized media industry in the United States that 'manufactured consent' in some type of unofficial, subconscious collusion with the political establishment.
One defensive view would be to 'shut it down' to maintain control.
One defensive view would be to 'shut it down' to maintain control.
22/ The much better offensive approach was to encourage the development of the internet, at home and internationally, and open the opportunities and challenges of the internet globally.
My view is very simple: the USA can handle open systems, its strategic competitors can't.
My view is very simple: the USA can handle open systems, its strategic competitors can't.
23/ My view is the literally anti-Peter Thiel view.
His view was that China was encouraging BTC to reduce USD dominance. It was the most backwards thing I have heard in years.
The USD can handle BTC just fine. A closed system like the yuan cannot.
His view was that China was encouraging BTC to reduce USD dominance. It was the most backwards thing I have heard in years.
The USD can handle BTC just fine. A closed system like the yuan cannot.
24/ A different way to put it - I am much more optimistic than our political establishment.
I believe the USA can lead the way to greater freedom, innovation and decentralization.
And that will help the United States and the world.
I believe the USA can lead the way to greater freedom, innovation and decentralization.
And that will help the United States and the world.
25/ If the USA leads on this topic, the EU will follow.
If the USA and the EU choose the path of freedom, we start to build systems that citizens of more closed systems to aspire to.
This, to me, is the way.
If the USA and the EU choose the path of freedom, we start to build systems that citizens of more closed systems to aspire to.
This, to me, is the way.
26/ It is a running joke to look at the terms of service of crypto services and see that they are not available to residents of "North Korea, Cuba, Yemen, Iran and the state of New York" (due to the Bitlicense requirements).
Ha ha ha, but actually a total embarrassment
Ha ha ha, but actually a total embarrassment
27/ New York is the financial & creative capital of the United States. Its residents are not idiots.
The idea that New York should be the state of maximum regulation of crypto globally is wild.
We lost this battle in '14 & how much opportunity has been lost since then???
The idea that New York should be the state of maximum regulation of crypto globally is wild.
We lost this battle in '14 & how much opportunity has been lost since then???
28/ So it is time to stop thinking defensively and start thinking about opportunity, about offense, about building the next generation of internet enabled organizations.
The 1990 to 2020 cycle has run its course.
The next cycle will be decentralized.
The 1990 to 2020 cycle has run its course.
The next cycle will be decentralized.
29/ Time for America to start playing to win again, not playing not to lose
(And Europe too, though that will be harder and will be a thread of its own)
(And Europe too, though that will be harder and will be a thread of its own)
30/ I have been in crypto long enough, in early maxi days, to know what yelling is incoming to me now.
✅Nation-states are outdated
✅I am an American apologist (laughable if you know me)
✅USA has done bad things domestically and internationally
Let's take these one at a time
✅Nation-states are outdated
✅I am an American apologist (laughable if you know me)
✅USA has done bad things domestically and internationally
Let's take these one at a time
31/ "Nation-states are outdated and we are going to make a global community without them"
Nonsense!
Nation-states have men with guns that can put you in cell. Which means it is super important that in democracies we aim to pass good, not bad laws.
We have to engage
Nonsense!
Nation-states have men with guns that can put you in cell. Which means it is super important that in democracies we aim to pass good, not bad laws.
We have to engage
32/ "I am an apologist for [x bad American foreign policy] or [the war on drugs] or whatever"
I can't get into details without doxxing myself but I am assuredly not a fan of American foreign policy.
Or, for example, the war of drugs that is end to end idiocy.
I can't get into details without doxxing myself but I am assuredly not a fan of American foreign policy.
Or, for example, the war of drugs that is end to end idiocy.
33/ I am however capable of holding multiple thoughts in my head at the same time.
The "war on drugs" is a stupid idea and also it is more likely we can boot up a web 3.0 economy in the United States than in China.
If you have better ideas, i am happy to hear them
The "war on drugs" is a stupid idea and also it is more likely we can boot up a web 3.0 economy in the United States than in China.
If you have better ideas, i am happy to hear them
34/ it is clear that most of you have not thought too much about FATCA.
The USA has basically imposed its own bank surveillance regime on banks globally.
The idea that the USA could go negative on crypto and that other states will fight the USA on crypto's behalf is lol
The USA has basically imposed its own bank surveillance regime on banks globally.
The idea that the USA could go negative on crypto and that other states will fight the USA on crypto's behalf is lol
35/ Which party in the USA should should be in favor of crypto:
Republicans are, in theory, in favor of devolved state power so they should be.
Democrats are, in theory, in favor of community vs corporate power so they should be.
In practice, though, the field is wide open
Republicans are, in theory, in favor of devolved state power so they should be.
Democrats are, in theory, in favor of community vs corporate power so they should be.
In practice, though, the field is wide open
36/ A lot of bold talk in my feed. Do this thought experiment:
If holding an NFT was illegal (risk of jail) and you couldn't ever cash out, how many of you would risk your freedom just to make decentralized art with no/limited ability for economic gain?
If holding an NFT was illegal (risk of jail) and you couldn't ever cash out, how many of you would risk your freedom just to make decentralized art with no/limited ability for economic gain?
37/ I am aware that crypto is hard to stop technically but it can be hurt badly socially.
Crypto has been tolerated in the West. It is legal and has access to fiat rails.
Which is why 95% of you are here.
We have to keep it that way
Crypto has been tolerated in the West. It is legal and has access to fiat rails.
Which is why 95% of you are here.
We have to keep it that way
38/ For more threads on NFT and how to save the open metaverse, go here
https://twitter.com/punk6529/status/1448399827054833668
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