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Thursday, January 4, 2018

Crypto Benefactors of Liberty Are Rising Up

Bitcoin and other crypto assets are tipping the established balance of power.

One of the most intriguing aspects of Ayn Rand’s Atlas Shrugged is that the novel’s protagonists actually have great wealth and thus the power to really change the world. It was precisely this wealth, born of value creation, that allowed Rand’s heroes to leave behind their booming industries and establish Galt’s Gulch. And by doing so, our heroes instigated the formation of a new society, one that valued individualism, entrepreneurship, and decentralization.

There is something deeply significant about this newfound Bitcoin wealth.

While Atlas Shrugged may be a work of fiction, the rise of cryptocurrency has presented a new opportunity for real-life heroes to truly enact change.

Crazy Libertarians and Their Bitcoin

Over the last several years, and especially over the last few weeks, I have watched some of my closest friends become abundantly wealthy as a result of crypto investments. And while I could not be happier for their financial success, there is something deeply significant about this newfound wealth.

As Bitcoin grew to become a household name over the years, articles were written cautioning against this burgeoning cryptocurrency. But the concern was not necessarily with Bitcoin itself, or even blockchain; it was about the people who are naturally attracted to such technology.

In 2013, Forbes wrote about “crazy libertarians” flocking to Bitcoin. This sentiment was echoed by the CEO of Reddit in 2014 when he said, “The user base for Bitcoin is basically crazy libertarians.” And of course, economist Paul Krugman has routinely warned that this new technology is “evil” specifically because its primary users were eager to find ways to bypass the Federal Reserve and the United States’ disastrous monetary policies.

And while it may be true that your friend who just made a million dollars from Bitcoin also frequently dons an “End the Fed” t-shirt, this is hardly a cause for concern. On the contrary, it is a cause for celebration.

For decades, many liberty enthusiasts have dedicated themselves to academia, think tanks, or grassroots activism. And while each of these roles is essential to spreading the precepts of liberty, they do not often come with outrageously high salaries.

As a prosperous venture capitalist, Thiel has been able to use his vast wealth to fund projects he believes in.

There is absolutely no shame in choosing to pursue your passions rather than to seek only financial gain. But there is also no shame in choosing to do both.

A Plethora of Peter Thiels

When Paypal founder Peter Thiel donated $500,000 in seed money to start the Seasteading Institute, he was able to do so without batting an eyelash. Coming in at number 12 on Forbes’s 2017 “Midas List,” Thiel has been the poster boy for libertarian success.

As a prosperous venture capitalist, Thiel has been able to use his vast wealth to fund projects he believes in. Many libertarians advocate political decentralization and seasteading allows individuals to voluntarily choose to live in permanent dwellings in the middle of the ocean, free from government interference.

And while the non-libertarian reader might think this idea crazy, what really matters is that because of his net worth of $2.5 billion, he was able to give a total of $1.7 million to the Seasteading Institute.

But thanks to Bitcoin and other cryptoassets, Thiel is no longer one of the few libertarians with the means to fund decentralization projects.

Erik Finman was fourteen years old when he purchased as much Bitcoin as he could for $1,000. Given to him by his grandmother, he used the money to buy the cryptocurrency when it was only $12 per bitcoin. Now 19, that investment is currently around $5 million. Finman, who has expressed pro-decentralization sentiment on Twitter, has also decided to use his wealth to fund projects that he believes in.

Finman dropped out of high school after the public school system failed him. As described in the Bitcoinist, “Finman had a terrible time going through the school system. He was bored and unmotivated. He says one teacher even told him that he would never amount to anything, so he should just drop out of school and start flipping burgers at McDonald’s.”

But it was this extreme disappointment in the public education system that inspired Finman’s latest project. Committed to creating new privately-funded alternatives to public education, Finman founded Botangle, an online educational platform, in 2013. 

Since then, he has expanded his vision and is now planning to build the “world’s best university” in Dubai. Finman, who believes college has become a waste of time, plans to use his wealth to create the type of school he wished could have existed for himself. But because Bitcoin allowed him to obtain this tremendous wealth, he is now able to impact future generations by funding schools he truly believes in.

For liberty activists who have been eager to enact change but frustrated by the stumbling blocks presented through the legislative process, they now have the chance to enact real change.

And this change doesn’t necessarily mean creating something new as Thiel and Finman did.

As mentioned earlier, think tanks are also integral to spreading liberty. And since most libertarians are opposed to government funding in the form of grants or subsidies, most think tanks and other nonprofit organizations of the liberty persuasion choose instead to raise funds from individual donors.

Just last week, FEE received one full bitcoin from an anonymous donor. At the time of the donation, that one Bitcoin was worth around $14,000. Whether or not this donor was one of the many liberty activists who just became wealthy from crypto is unknown. However, these types of donations are becoming more and more common as activists now have the money to back their ideas. And that is really where their power lies.

Bitcoin and other crypto assets are tipping the established balance of power.

The Power to Change the World

So many idealists want to change the world. But the unfortunate reality is that many lack the resources to bring about substantial change.

On an application for an internship I applied for years ago in college, I was asked how I would spread liberty if I had access to large sums of money. Talking through my response with other liberty friends, we imagined all the vast ways we could change the world, if only we had the means to do so.

Now, one of those friends has made a small fortune thanks to the crypto economy and has used that money not only to donate to causes he believes in but to also start his own company through which he can spread the message of liberty.

By using his money to put his beliefs into action, he is, to borrow from Randian speak, stopping the motor of the world, as is Thiel, Finman, and countless others. Since the government has a monopoly on force, we may never be able to achieve success through the legislative process. But each time a crypto activist uses their money to further decentralization, liberty wins. Any doubt of this can be cleared up by considering the fear expressed by many regulators and statist economists every time crypto breaks through another barrier.

Bitcoin and other crypto assets are tipping the established balance of power. And where so many other ideologies demonize wealth, libertarians understand how this can be used to promote change.

As the fictional Atlas Shrugged hero Francisco D’Anconia says in his infamous “money” speech, “Your wallet is your statement of hope…”

  • Brittany is a writer for the Pacific Legal Foundation. She is a co-host of “The Way The World Works,” a Tuttle Twins podcast for families.