Libertarians: ‘Bitcoin’s Biggest Threat’?

On December 9, investment writer Martin Tiller wrote for NASDAQ that the biggest danger to Bitcoin comes from libertarians who will “hurt the very cause that they are championing.”

He argued in the article, entitled “The Biggest Dangers to Bitcoin Come from Proponents, Not Opponents,” that those who speak out against Bitcoin aren’t the ones who hurt it. We all know the “tired objections” about “bad actors” who “latch onto” Bitcoin, he says. If the digital currency fails, it will be due to those who support it:

“What is probably the greatest danger to the future of Bitcoin, and maybe even to the blockchain: politics. ... The decentralized, non-governmental nature of digital currency makes it particularly appealing to those of an extreme libertarian bent. When those voices are the only ones heard, it makes wider adoption and acceptance less likely.”

He would like libertarians, who have worked with such passion to spread Bitcoin’s adoption, to believe that they now inhibit its growth.

Roger Ver, for example, learned of Bitcoin while listening to the libertarian talk show Free Talk Live in 2011. He invested heavily, and since then, he has been perhaps the most influential libertarian to single-handedly spread Bitcoin’s adoption and success.

He calls Bitcoin “the most important invention in the history of the world since the internet.” His company, MemoryDealers, became “the first mainstream business to accept bitcoin as payment,” and he has been “the most prolific Bitcoin-related startup investor,” funding the seed rounds of about a dozen major companies, including the Bitcoin Foundation, Blockchain.info, Ripple, Kraken and Coinapult.  

In a live interview with Decentral Toronto on November 12, 2014, Ver talked about his “proudest achievement.” In the summer of 2012, he went to Porcfest, the libertarian “Porcupine Freedom Festival” held in New Hampshire and run by the Free State Project. He took with him “500 to 1,000 bitcoins,” which at the time were “worth $5 each,” and he “spread them to everybody in the campground.” He says:

“I feel like I had a big hand in helping to spread Bitcoin to libertarians, in general, and then thanks to libertarians, it’s really started to spread to the masses around the world. ... It’s probably one of the things I’m most proud of, is helping to spread Bitcoin to all these people that already understood economics and individual rights, and from there, now it’s spreading to the masses.”

The value of Bitcoin between that summer in 2012 and now has increased and swung wildly, going from US$5 to a high above US$1,000 in 2013, Today it sits fairly steady at around US$350.

Even at today’s comparably “low” price, the value of a bitcoin has increased 70 times since Ver spread bitcoins throughout Roger’s Campground in the woods of New Hampshire. Attendance at Porcfest that year broke 1,000 (in 2014, it broke twice that), and the libertarians who received Bitcoin took it home and spread it further. At the time, it was almost unimaginable that large companies, including Dell, PayPal and most recently Microsoft, would accept it as payment two years later.

Stefan Molyneux is another well-known libertarian who speaks in support of Bitcoin. On November 6, he published a video entitled “The Hidden Dangers of Bitcoin” in which he said, “users could face an incredibly dangerous backlash” as governments “try to throw little bits of sand [into the technology], little bits of sand, until most people find it too difficult and cumbersome to use.”

Given the strong libertarian history supporting the growth of Bitcoin, and governments’ history of making everything cumbersome, by what reasoning does Tiller claim that libertarians will be its downfall? He says:

“When every piece of news heralds a diatribe on the evils of government, ... an awful lot of people ... will be turned off of the idea of alternative currencies. ... Decentralized currency has its roots in libertarian ideas and those of that ilk have every right to voice their opinion. However, when it drowns out all others it will, over time, hurt the very cause that they are championing.”

Ver, who ran in 2000 as a candidate for the Libertarian Party (promising to take no salary) does indeed speak loudly against the “evils of government,” promoting the safety of Bitcoin over fiat:

“I see the United States government printing money like crazy and then they use that money to buy all sorts of tanks and bombs and airplanes and murder people all over the world.”

Governments cannot print Bitcoin to fund anything, but they can and do steal it and sell it in exchange for their fiat, which they then use—as they use all taxes—to fund whatever they want. As Bitcoin and other decentralized blockchain technologies grow, governments will try to control and regulate them, “throwing sand” in the gears of innovation.

In a recent Bitcoin Game episode, Adam B. Levine of Let’s Talk Bitcoin (LTB) talks about how regulations are having a “chilling effect” on innovation in the space:

“The projects that are going to wind up being targeted are very useful, net positive projects. They’re not going to be gone after because they’re actually hurting people. They’re going to be gone after because they violate obscure rules that are being made to apply to something that otherwise they wouldn’t apply to. ... It’s an act of war ... [and] we’re already seeing the impact. ... You could see an entire episode [of LTB] that otherwise would have been about [a] project . . . instead had more than half of it devoted to questions of . . .  laundry list checkpoints not tremendously interesting, and yet we have to care because to just talk about the exciting part and gloss over the business stuff in such an environment seems irresponsible. ... This is just fear . . .  about the potential for [being made into an example]. But how can we as adults who like our lives not act in a way that does everything to prevent the worst from happening?”

Will Pangman, CEO of Tapeke, Ltd., describes similar effects:

“The biggest danger to Bitcoin's growth [in 2015] is the same danger that limited its growth in 2014. Regulatory uncertainty, aka, nebulous regulation, pending regulation, delays in pending regulation, draconian regulation that can never be effective on its face, conflicting regulations from competing bureaucracies, rapid and frequent changes in regulation, regulation that protects consumers but not new business, regulation that protects incumbents from new business, legislation disguised as regulation, etc., etc.”

According to Tiller, talking about the effects of government is a “demand for ideological purity,” as if an insistence that only governments can solve problems (that they often create) is not “ideological purity.” “There are supporters and Bitcoin believers who have a different approach,” he says, than the libertarian one “and their voices must also be heard.” One must presume that he speaks of his own voice, which any mainstream news organization echoes daily.

David Mondrus, CEO of Blockchain Factory, points out that the libertarian community is no longer the only voice speaking out against government. “The marches protesting police brutality over the last several weeks are just one example of dissatisfaction that has spread much farther than just the libertarian community.”

According to Pangman, Tiller commits “the very obvious and sophomoric logical fallacy known as ‘killing the messenger.’”

Those who want to use the government to meet their ends are given the label “saviors of the public good.” Those who want to live peacefully and voluntarily, who merely point out government violence, are given the label “dangerous.”  

While people who call themselves libertarians do not always behave peacefully—protesting in ways that incite police, for example—their intentions are generally to increase the freedoms of others, rather than to take them away. The result is often that those in government double down further. The answer is not to confront governments, but to go around them, which is what a technology like Bitcoin does. 

In the words of Mondrus:

“As people realize that the blockchain ledger technology underlying Bitcoin allows us to cooperate and govern ourselves without the need of a central authority, they will no longer tolerate an abusive and monopolistic centralized governance system.”