Why is Bitcoin even a campaign issue in 2024?

PLUS: All the awful Olympics ads about A.I.

Greetings from Read Max HQ! In this week’s newsletter:

• What should Kamala Harris do about Bitcoin, and why is this even a campaign issue?

• A discussion of the execrable A.I. ads that have been inescapable during the Olympics

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Why is Bitcoin still around

One silver lining of FTX’s implosion in late 2022 was the possibility that the scandal would so thoroughly taint cryptocurrency in the public imagination that we would never have to hear about the asset class ever again. This was probably always a misguided hope, but the fact that the exchange’s humiliating downfall and the consequent public delegitimation of crypto coincided with the cessation of pandemic restrictions and the Fed raising interest rates lent some weight to the theory that the wild period of retail speculation and aggressive tech-industry promotion had ended for good, and the macro conditions that enabled the crypto bubble in the first place had transformed enough to prevent its reinflation.

In retrospect, what died with FTX wasn’t crypto but “web3,” both the world-historically wack and grating “culture” and the inescapable speculators, investors, bubble-inflators, and book-talkers--and their marks and stenographers and bag-holders--who insisted well beyond reason on the cultural power and social value of the blockchain. Mashallah: Reasonable human beings need never again see a “cryptopunk” avatar, or read the word “fren,” and the people who tried to make this stuff happen have moved on to sports gambling, prediction markets, A.I., and other annoying schemes. But despite its comparative absence from the public consciousness--and despire S.E.C. chair Gary Gensler’s ongoing attempts to regulate crypto like any other security--crypto the asset class, and especially Bitcoin itself, have, dismayingly, survived the FTX debacle--and been hitting new record highs since the spring.

The residual, streamlined, post-FTX, post-web3 crypto culture is interesting. It’s mostly divested itself of the pretense of non-speculative utility that served as a cover for the web3 bubble; you don’t really hear many start-ups pitching blockchain solutions anymore. What’s left is a core group of ideologically and financially committed young men, a mix of hustlers and marks (almost everyone in this scene is both at once), who buy deeply into crypto’s promise of financial independence, if not always the full anarcho-capitalist program that spawned the tech.¹ This base is joined in the current crypto coalition by a collection of somewhat more pragmatic, often institutional investors--think Larry Fink of the immense investment management firm BlackRock--who have less of an ideological commitment and simply like crypto (and especially Bitcoin) as a speculative “non-correlated” asset. Both groups, of course, have a vested interest in establishing a rapprochement with the U.S. government, which Semafor’s Joseph Zeballos-Roig reports is well under way in anticipation of a new administration come November:

Last year, the digital asset industry faced a regulatory crackdown after the collapse of leading crypto companies and the indictments of their executives. Fast forward to this past week, when presidential contenders from both sides of the aisle took an interest in the sector and calls to replace its chief nemesis, Securities and Exchange Commission Chair Gary Gensler, grew louder.

“It’s been a remarkable turnaround in how people perceive the industry,” Kristin Smith, CEO of the Blockchain Association, told Semafor. “If you had told me a year ago we would be in the place where we were today, I’m not sure I would believe you.” […]

A trio of crypto firms are pouring campaign cash into congressional races through super PACs, and intend to spend as much as $150 million. Wealthy crypto backers are targeting close races of incumbent Democrats, like Sen. Jon Tester, D-Mont., and Sen. Sherrod Brown, D-Ohio.

The RFK and Trump campaigns have already made clear plays for “the crypto vote.” Over the weekend, at the Bitcoin 2024 conference in Nashville, Kennedy pledged that the government will purchase about $250 billion in Bitcoin if he’s elected president. Trump, speaking at the conference a day later, promised to fire Gensler, assured his attendees they wouldn’t need to learn Chinese,² and ended his address with the beautifully contemptuous line “Have a good time with your bitcoin and your crypto and everything else you're playing with” (video above via Molly White).

Kamala Harris, for her part, apparently discussed speaking at Bitcoin 2024, but ultimately opted against it. The appearance would have been the first step in an overall “reset” with with crypto world that’s being urged on Harris by (1) crypto-enthusiast Democratic-aligned business figures like Mark Cuban, (2) centrist-coded Democratic pundits like Matt Yglesias counseling moderation in her campaign, and (3), a bunch of her fellow Democratic elected officials and candidates, 28 of whom recently signed a letter calling the Democratic Party to “champion” Bitcoin, most notably by installing a “pro-innovation” S.E.C. chair.

It seems pretty obvious why RFK and Republicans would sense a natural affinity with highly online, fraud-adjacent, low-social-trust investors. But why are so many Democrats seeking conciliation with an “industry” that is scammy and reactionary down to its very architecture? For some Democrats there is, obviously, a financial interest, either direct (in the form of crypto investments) or indirect (in the form of crypto donors). But there is also the fact that, as Josh Brown points out, the politics of crypto suffer from an enthusiasm imbalance, and there just isn’t much short-term political upside to staking out an anti-crypto position:

As I mentioned earlier this summer, there is no anti-crypto constituency outside of some lawyers and regulators inside the Beltway. Literally no one else cares. They may not trust crypto currencies or want to be involved with them, but they certainly do not get animated by their existence or start writing checks to the politicians who want to eradicate the space.

All of the energy is on the other side. The pro-crypto people are super animated about it. They’ve filled the coffers of SuperPACs like “Fair Shake” with over $200 million. Some of the wealthiest, most successful venture capitalists and asset management execs are now vocally and aggressively pro-crypto. They will support candidates for office nationwide who come out as crypto-friendly with donations, events, energy, snark on social media, etc. It’s good to be a crypto candidate these days. All of the money and momentum is going in one direction. […]

It’s hard to believe that there might be a few million voters whose singular issue in the upcoming election is the defenestration of the chairman of the Securities and Exchange Commission, but it might actually be true. Young men in their 20’s and 30’s from all walks of life and regions of the country are incredibly passionate about their right to buy, sell, create and hold digital assets. They are ready to campaign and spread the word, they are ready to send cash and they are ready to vote.

But I think Brown maybe overstates the importance of the “crypto vote.” It’s true, a few hundred thousand votes in the right states could tip the election, but I suspect single-issue crypto voters are so ideologically poisoned at this point that Harris is not going to convince them. What seems at stake in discussions of Kamala Harris’ hypothetical crypto policy is not so much the votes of crypto as it is signaling to business owners a willingness to moderate. As Adam Tooze puts it in a piece arguing that the “Silicon Valley” election is more narrowly about crypto’s status, “crypto has… become a symbol of wider relations between the Democratic Party and business.” That is, the crypto “reset” isn’t necessarily so much about “crypto” as a culture or movement or even asset class as it is about demonstrating to investor and executive classes that Kamala Harris will work with them.

As Tooze writes, “From the point of view of the once marginal crypto camp, this is in itself a win.” But being a symbolic prize (and/or junior partner) in bargaining between elected officials and high finance--two groups Bitcoin true-believers have always insisted were opposed to their interests--is very different from setting the terms of a deal. I’m sure in the end the broad “crypto community” will make their peace with any regime under which their investments come good, but a smoke-filled room negotiation between Democrats and asset managers over the crypto regulatory apparatus is not, I think, what the group of listserv cypherpunks who first conceived of cryptocurrency had in mind. This is what happens when your coalition is divided between Real Money, for whom crypto is one asset in a diverse portfolio to be managed through political negotiation, and retail ideologues who see it as heralding a transformed future.

So where does this leave Harris? I don’t think she should fire Gensler, but I’m not in principle opposed to her trying to make some kind of peace with crypto-addled dudes, even to the point of speaking at Bitcoin 2024. It’s hard to think of a more depressing sentence than “Young men in their 20’s and 30’s from all walks of life and regions of the country are incredibly passionate about their right to buy, sell, create and hold digital assets,” but it’s true: One political issue young American men are genuinely passionate about is their absolute right to lose a ton of money on an app in a really stupid way. At some point, the Democratic Party, or “the left” more broadly, is going to have to figure out how to address the alarming importance of (at best) soul-deadening and (at worst) potentially life-ruining speculative financial games to these guys. Surely there are ways to reach them, and sustainable and socially beneficial ways to give them whatever it is they get out of crypto and day-trading and sports gambling.

But embracing a particularly risky and ideologically toxic asset class for the sole purpose of signaling friendliness with the Larry Finks and Mark Cubans of the world seems like one of those classically Democratic political gestures that provides little electoral benefit and lots of long-term downside. More people will get scammed; more people will lose savings; more energy will get expended pointlessly; more rich people will get even richer even less deservedly. If the Democratic Party isn’t against those things, what is its point at all?

Boy do I hate all the Olympics A.I. ads

The above ad, in which a father uses Google’s Gemini A.I. chatbot to “help my daughter write a letter telling [hurdler] Sydney [McLaughlin-Levrone] how inspiring she is,” has been inescapable during NBC’s Olympics coverage this week. Everyone, naturally, hates it, for the obvious reason that it’s tacky and embarrassing to promote a vision of the future in which one of the cutest things you can imagine (“child fan letter”) is replaced with one of the most soulless (“Google Gemini generated text output”). Indeed, it’s so weirdly ill-conceived--in the same manner as the Apple iPad ad that freaked everyone out a few months ago--that it makes me worry a little bit about Google and the A.I. madness that has clearly seized the entire company.

But one reason that Google is showing off Gemini’s ability to write letters is that “writing emails” one of the few clear and obvious uses for tech-giant A.I. chatbots. Microsoft’s Olympics ad for its Copilot app shows an older woman runner asking it to “analyze my heart rate data” (??), which isn’t as icky as asking it to replace your child’s communicative abilities but is also not a question I can really imagine asking Copilot, and certainly not a question I would expect Copilot to answer helpfully. Worse still, to me, is this Meta ad:

At one point during this ad a boy standing in SoHo with (presumably) his grandfather asks his Meta A.I. chatbot “Imagine Little Italy in 1954.” The Meta A.I. produces this slop:

Like ??? There are tens of thousands of actual photographs of Little Italy from 1954, where actual light bounced off actual objects and passed through lenses and onto film, creating a direct representation of an actual street on which actual people lived. I bet this stupid kid’s grandfather has a bunch of these photos, even! (“There it is!” he says.) You don’t need to “imagine” it in your own brain, let alone use Meta A.I. to produce a statistically probable approximation of one of those many actually existing photos. Are these really the best uses for generative chatbots our richest tech companies can imagine?

1. There are, of course, plenty of real-deal reactionaries in this crowd: Ethereum founder Vitalik Buterin was recently torched online by crypto people for admitting he’s vaccinated.

2. “You're not going to have to go to China. You're not going to have to learn, gee, how do I learn Chinese? I want to learn it very quickly. Have a little granddaughter that speaks fluent Chinese. Can you believe it? And it's a wonderful thing. It's not easy, but you're not going to have to do it.”