Former President Donald Trump is calling for a domestic bitcoin mining industry to develop in the U.S. Perhaps with a bit of hyperbole, the Republican presidential candidate said Tuesday he wants “all the remaining” bitcoin – about 2.1 million units – to be produced in the U.S., arguing it would help the country become energy independent and counter the development of a central bank digital currency. The announcement, made on his Truth Social social media platform, followed a talk between Trump and Bitcoin Magazine CEO David Bailey in front of representatives from leading bitcoin mining firms CleanSpark, Riot Platforms, Marathon Digital at the former president's Mar-a-Lago resort in Florida. The latest in a series of increasingly pro-crypto statements – including a pledge to defend the right of self-custody, accept crypto campaign donations and “keep Elizabeth Warren and her goons away from your Bitcoin” – has drawn mixed reactions from crypto advocates. Perhaps that is not so surprising, given how polarizing the former president (whose favorability rating never stood above 50%) is in the U.S. However, this is arguably the first time since 2019 – when Trump said he was “not a fan” of Bitcoin – that the former reality star missed the mark on crypto. The idea of onshoring bitcoin mining is all well and good, and has been happening ever since China banned the practice in 2021. But, if you take Trump literally, calling for all bitcoin miners to be located in a single region suggests a profound ignorance of what Bitcoin is, how it works and why it’s powerful.
Geopolitical signal?
However, that’s just one opinion. There are many others. Bitcoin Magazine’s Alex Bergeron, for instance, argues Trump’s statement is a powerful signal for the importance of crypto. “We absolutely want the world's most powerful man to signal to every other power brokers that Bitcoin mining is a geopolitical issue. That's how you get everyone to start mining. That's how you decentralize the network,” Bergeron wrote, responding to climate change expert and co-founder of the Bitcoin Policy Summit Margot “jynurso” Paez. Paez argued that centralizing hashrate production in any one country – specifically one where politicians and regulators have in recent memory been hostile to crypto – is perhaps unwise. President Biden’s administration, for instance, has floated the idea of a steep 30% bitcoin mining tax. In any event, it’s unlikely the hashrate would ever centralize in any one region, given that there are bitcoiners the world over, who would be difficult even for the President of the United States to prevent from mining. So the real question here is whether the U.S. attempting to dominate the bitcoin mining trade through government support or even subsidy would inspire other governments to incentivize domestic mining. It’s far-fetched, but global leaders do often look to the U.S. to set agendas. The problem is Trump’s notably low standing among said global leaders. So whether this campaign platform actually moves the needle on bitcoin mining is difficult to say. Especially because it’s impossible to say whether Trump’s pro-crypto statements should be taken as pandering or flattering. He is certainly a divisive figure among bitcoiners – and not even just the progressive ones.
Lying with dogs
Many see it as frankly embarrassing to be buddying up with any politician, putting aside Trump’s Napoleonic sized ego. Bitcoin writer and privacy advocate L0la L33tz, for one, wrote a whole essay about the subject, arguing that politicians cannot be trusted, that Trump failed to deliver on many of his previous campaign promises, and that Bitcoin doesn’t really even need political support. “When your morals can be bought, you are not a patriot – you are a sell out,” L33tz wrote. Apart from being an internally consistent take considering the “Bitcoin ethos,” it’s worth noting that L33tz’s position is also likely long term optically best for the industry development. It may seem expedient to fall in with the Republican party standard-bearer given that most political support comes from the right. But I think the view of someone like Uniswap's Marvin Ammori (who debated big-time Trump supporter Ryan Selkis at Consensus 2024 last month) – that the crypto industry should strive to be neutral and apolitical – is likely the better strategy. I’ve argued before that it’s inevitable for crypto, as a cause celeb, to become an issue for the right to defend and left to vilify. But should you want it to be? Read the article online... –D.K. @danielgkuhn [email protected] | 