Here is a list of some of the figures who have shown interest in bitcoin cryptocurrency and its associated “blockchain” technology: white nationalist Richard Spencer, who called bitcoin “the currency of the alt right.” Former Trump chief strategist Steve Bannon, who has had private meetings with cryptocurrency investors. Peter Thiel, the PayPal founder and libertarian venture capitalist who quietly advised the Trump administration for months. And in Germany, the rising far-right party Alternative für Deutschland (AfD), who had its co-leader speak at a cyptocurrency conference as a ““economist and bitcoin entrepreneur.”
And now? Governor Gina Raimondo and Speaker of the House Nicholas Mattiello, who both spoke at the first Rhode Island Blockchain Summit at the Omni Hotel in Providence on Thursday, an event the former Trump press secretary (of 10 days) Anthony Scaramucci was rumored to attend.
It would be a grave mistake to overgeneralize, or to argue that sharing a curiosity for cryptocurrency at all entails a substantial agreement between Rhode Island leaders and these crypto-stakeholders’ far-right stances. There are now 1,952 cryptocurrencies in existence, making the technology a particularly wide tent. Republican candidate for governor and former state senator Giovanni Feroce has made blockchain a pillar of his campaign, calling for voters to make him the “blockchain governor” and proposing the technology be incorporated “directly into the government’s own administrative infrastructure.” Despite his platform Feroce was not invited to the conference, claiming to the Providence Journal that it was because he’s fallen out of the governor’s favor.
Other states have rushed to invite the nascent industry: Wyoming, with its bid to become the ”cryptocurrency capital,” being a chief example. A write-up on GoLocalProv—one of the listed hosts of the event—describes Gov. Raimondo’s support in line with her now familiar interest in expanding the state’s burgeoning tech sector, saying she “presented a government willing to work to create a fair regulatory structure to an exploding industry.”
But the history of blockchain technology is deeply mired in libertarian, techno-utopian thought. Bitcoin’s founder, known as “Satoshi Nakamoto,” posited the technology as a tool to fight “fiat currency” and “fractional reserve banking” before disappearing from the web without a trace, according to a report at Jacobin. Thursday’s event demonstrated a marked interest on the part of Raimondo and Mattiello in, to use the title of Mattiello’s talk at the event, “Making RI the Blockchain State.” But in doing so, will Rhode Island have to reckon with blockchain’s right-wing past?
Blockchain is distinct from its most widely-recognized usage in bitcoin; it’s the technology behind the cryptocurrency, but not all blockchain is bitcoin. In layman’s terms, blockchain is a digital ledger of records held and updated across multiple servers at the same time, leading to its common characterization as a “decentralized” or “distributed” network. This structure makes transactions hard to tamper with, verifiable, and allows value to be transferred without banks as intermediaries. This also makes it prime for its uptake by those looking to counter state and financial governance.
In his paper “Bitcoin as Politics: Distributed Right-Wing Extremism,” the scholar David Golumbia argues that bitcoin has largely served as an ideological tool, drawing underinformed yet interested parties into “(nominally) anti-government political discourse.” Although its proponents, such as Ron Paul, posit the technology as a weapon against “state monetary supremacy” through institutions like the Federal Reserve, Golumbia observes that cryptocurrencies do close to nil in terms of reducing state financial sovereignty, nor do they shift socioeconomic power in any substantial way. “The rich and powerful will not become poor and powerless simply because some people decide to operate alternate exchange economies,” Golumbia writes. “Lacking a robust account of transforming these systems of power, even without Bitcoin’s flaws, a ‘perfect’ cryptocurrency would exacerbate, rather than address, the existing serious problems with our monetary and financial systems.”
Such an exacerbation of wealth disparities is already taking place: Business Insider has reported that the expanding cryptocurrency market is chock full of “pump and dump” schemes, in which traders artificially inflate certain cryptocurrency values, duping fellow investors to buy in before the currency crashes “within minutes.” Such fraudulent behavior prompted the state of New York to implement “BitLicences” in 2015 for companies looking to trade virtual currency. The crackdown came at the chagrin of companies centered around cryptocurrency, leading to a “bit-exodus” of crypto-business from the state.
Several people I spoke to at Thursday’s summit suggested that Rhode Island is looking to take in cryptobusinesses New York sent away. Alongside GoLocal Prov, the summit was hosted by the blockchain investment company Alchemist and their advertising representative G Media. G Media’s CEO David Paolo told me that the event was meant to attract 50 blockchain companies to Rhode Island; he said that Raimondo and Mattiello “are going to listen to what [companies] need and try to change the regulations to make business friendly for them.”
Alchemist’s CEO Steven Nerayoff also told me that Rhode Island is “an extremely friendly business environment” for blockchain enterprises. He added that, gauging the growth of the industry and comparing it to the “Netscape moment,” that expanded commercial implementation of blockchain might be three to four years out, but argued that the pace of development is speeding up with added interest.
Alchemist Vice Chairman Jeff Pulver talked me through some of the possibilities for blockchain in the state. He argued that the technology will potentially “reverse” the brain-drain of college graduates leaving Rhode Island. He said you could put health care on the blockchain, as well as insurance and municipal bonds with built-in incentives for companies showing their support for the state. “We can look at the entire ecosystem of how we buy things, of the entire ecosystem for education, and identify places where we can actually do better. It’s transparent, it’s open, and it just changes everything,” Pulver said, adding, “It allows the impossible to become possible.”
I mentioned some skepticism regarding the state’s tech investments following the collapse of Curt Schilling’s 38 Studios, which lost the state a grand total of $61 million. I asked: what makes blockchain sustainable for Rhode Island? “It changes the world. You can keep your head in the sand, or you can actually embrace the future. And Rhode Island’s offering people the chance to embrace the future today,” he responded.
Later, I asked Pulver point-blank how he would respond to those who might be worried that they don’t have control over that future, because that future is being shaped by technology that they don’t understand, that’s “decentralized,” and that’s spread across multiple different corporations.
“We’re not forcing anybody to accept change. We’re offering the opportunity, if they want to take a chance, for maybe huge benefits if they want to be a part of that future trend,” Pulver said. “I believe that when history is written, the economic impact of blockchain on business will be dramatically greater than the overall impact the internet has on business today, at a magnitude level.”
He compared himself to a weather forecaster, looking at previous storms like the internet boom and yelling that the next one will be fantastically big. “I’m not suggesting that the storm is going to disrupt you and throw you out of business, but the internet did that to many companies. People knew 40 years ago where a connected world could go. A lot of people chose to have paper bags over their heads… They may or may not be employed today. But change happens… To the extent that people enjoy change, or enjoy fighting change, it’s a great time. To the extent that people may be disrupted by it: heads up. There’s a disruption on the horizon, and we see it.“
It appears that state leadership is predicting a massive future for the technology, too. But technology, without fail, is always embedded in politics. We saw that this week when the ACLU tested Amazon’s face recognition software, which falsely matched 28 members of Congress (disproportionately people of color) with criminal mugshots.
If the state plans on shaping its regulation around blockchain’s promise of economic disruption, Rhode Island’s leaders should take care not to wade into ideological disruption along with it.
Representatives from the governor’s office and the speaker’s office did not respond to requests for comment by the time of publication.