DeSantis and the culture war over Bitcoin

This week, CoinDesk published an article about bitcoin mining that was well-balanced and thought-provoking. The article focused on Greenidge, a bitcoin mining company located in upstate New York. Last year, environmental activists claimed that the Greenidge facility was polluting the waterways and harming the ecosystem, resulting in Governor Kathy Hochul’s decision to restrict bitcoin mining in the state. However, most of the claims about Greenidge were untrue. CoinDesk reporters visited the town of Dresden and found that none of the lawmakers who made the decision to restrict mining had spoken to its mayor or visited the town.

The debate around bitcoin mining has centered on its environmental impact. Before Greenidge began using natural gas, the plant was deactivated. When the miners were turned on, they released fresh carbon into the atmosphere. The Bitcoin network uses as much energy as a country like Norway, and whether this is “worth it” depends on one’s view of permissionless money. The decision of whether a state should encourage or ban bitcoin mining is a conversation that involves politicians, stakeholders, and those affected.

CoinDesk’s reporters expected the locals to hate the plant, but instead found that many supported the business. Greenidge created jobs in a town where opportunities are scarce. The few complaints about the plant came from wealthy out-of-towners with vacation homes on the lakeshore.

The article argues that beyond the debates about bitcoin mining lies a class conflict. Bitcoin was created during the Great Financial Crisis as a tool for anyone to access a semi-private electronic cash system. Over time, the narrative has become more complicated, and some of Bitcoin’s biggest supporters have become entrenched elites. Bitcoin mining has become a highly capital-intensive industry and requires specialized computers that draw electricity 24/7. However, bitcoin mining creates opportunities for people where opportunities are scarce.

If Greenidge is any indication, the real conversations we could be having around bitcoin mining and class will be increasingly consumed by another conflict: the Culture War. Bitcoin is likely to become a red-blue issue in the U.S., with Republicans endorsing it and Democrats disavowing it.

See also: You Can Be a Bitcoin Maximalist and Like Ethereum, Too | Opinion

Florida Governor Ron DeSantis (R.) recently spoke about Bitcoin’s “threat to the current regime” at an event announcing his 2024 presidential campaign. Despite portraying himself as a populist, DeSantis has gained the early support of wealthy technologists such as Elon Musk and fellow PayPal Mafia member David Sachs. DeSantis is probably best known nationally for his support of the “Don’t Say Gay” bill and a dispute with Disney.

It seems likely that DeSantis’ pledge to “protect” Bitcoin is more of a performance than his “ban” on central bank digital currency (CBDC) in Florida (given that the Fed has not yet decided whether a digital dollar is worth fully studying). Nonetheless, some people’s perception of cryptocurrency may be influenced by his stance, furthering the type of political feedback loop that allowed environmentalists to lie about Greenidge’s ecological impact and the New York Democratic government to purchase it without question.

As my colleague Nik De stated, “a conversation that excludes those most directly affected can lead to problematic outcomes.” When only two significant political parties are discussing fake internet money, only those who own vacation homes are likely to be heard.

CORRECTION (MAY 25, 2023): Greenidge has converted to using natural gas.