March 04, 2024
GM! A little more ETHDenver before we get back to our regularly scheduled programming.
🚨 Situational awareness: BTC price broke $67,000 this morning.
Today's newsletter is 1,184 words, a 4½-minute read.
1 big thing: RFK Jr.'s Denver bitcoin pitch
DENVER — Robert F. Kennedy Jr. was only able to get one big round of applause Saturday at ETHDenver: When he said he recently bought bitcoin (BTC) and planned to buy some ether (ETH) once he got home.
Why it matters: The longshot independent candidate for the White House hit his key selling points for the cryptocurrency conference crowd, but the room during his on-stage conversation fell well short of feeling like a pep rally, Brady and Crystal write.
Kennedy showed up to the giant industry conference with a message that the U.S. government is on a mission to take away people's right to transact with whomever they want and that he's the man to stop it.
- "Transactional freedom is as important as freedom of expression," Kennedy said during a press conference before his event appearance.
- The message resonated with at least part of the crypto crowd at his on-stage conversation with Custodia Bank CEO Caitlin Long but didn't bring the house down either.
- Cryptocurrency advocates contend that (as an example) there's no freedom of association if people are denied the ability to pay for travel to participate in political activity.
Kennedy particularly objected to the idea of a U.S. dollar CBDC, or central bank digital currency. "I know how to stop it in this country," he told Axios in a private conversation.
- CBDCs are actual money backed and issued by a central bank. Proponents argue that they could make payments cheaper and faster. Critics argue that they bring state surveillance too deep into people's lives.
- He said he could do a lot via executive orders and would push for anti-CBDC legislation.
- "I don't think there's anybody using a podium or a bully pulpit to explain to the American public how inconsistent central bank digital currencies are with our values and how threatening they are to our constitutional rights."
Reality check: The country's leading presidential candidates aren't jumping headfirst into CBDCs, either, though many other countries are moving toward such payment schemes.
- The Biden administration issued an executive order to study the issue, while former President Trump has made known his objection to them.
The big picture: Kennedy argued to reporters that bitcoin gives the middle class a shot at holding their ground in an economy that's been hard on them.
- It also makes it easier to finance green technology projects by offering them additional revenue streams, he said. (More on this below.)
- "I am the only candidate who is going to be an advocate for cryptocurrency," he said.
- If elected, he said he would oppose decentralized digital assets being treated as securities. He also said he'd like to see small transactions exempt from taxation.
Inside the room: Kennedy, who was briefly interrupted by a protester from Just Stop Oil, got his points in, including telling the conference crowd that he could make the U.S. into a hub for blockchain entrepreneurship.
- That said, Axios didn't see many takers for the RFK flyers and swag his supporters were handing out.
- Axios overheard one attendee conclude: "He was corny, man."
⚡️ 2. More RFK Jr.: On power and bitcoin
During our one-on-one with RFK Jr., we also asked why he believes bitcoin is good for lowering civilization's carbon footprint, Brady writes.
Why it matters: There's an intense debate around bitcoin's environmental footprint, with many environmentalists arguing that it uses too much electricity.
Zoom in: Kennedy, who often touts his work as an environmental attorney and his investments in clean energy, called Bitcoin mining "a huge boon to variable power" sources.
- He demonstrated a sophisticated understanding of the economics of bitcoin miners, whose largest input cost is electricity but also can locate anywhere.
- "Bitcoin miners can work when the supply exceeds demand," he said during our conversation. "The marginal revenues that come from those inputs a lot of time mean the difference between the green light and the red light" on a financial deal for renewable energy projects.
There's one source of power he's not enthusiastic about: nuclear power.
- "I'm all for nuclear power if they can ever make it safe, if they can ever make it economic. And right now it's neither of those," he told us.
- The risk of a meltdown at a nuclear plant is too great, he argued. Even if such an event is very, very unlikely, it would be so catastrophic that it's not worth risking.
- "The consequences are trillion-dollar mishaps," he said.
The intrigue: The candidate pointed to legislation that just passed the House that would give the nuclear industry 40 more years of limited legal liability for accidents.
- "Three hundred House members voted [for it] because they are all on the take," he said.
🌪️ 3. ETHDenver Dispatch: Tornado Cash
The developers of Tornado Cash need the support of the cryptocurrency community, Ameen Soleimani argued Friday night at the conference.
- Soleimani launched MolochDAO, a funder of public goods for Ethereum users, that ultimately supported the development of the app.
Between the lines: Soleimani argued that prosecuting open source developers could chill activity around making technology for activists and dissenters.
Catch up fast: Tornado Cash is a decentralized privacy app that allows users to disassociate themselves from a particular payment. It fell under U.S. sanctions in August 2022.
- It had compliance tools built in so users could prove which payments were theirs if asked to by law enforcement.
- Because the smart contracts that run it are immutable on the Ethereum blockchain, it's still operating. It has over $500 million in cryptocurrency in it today.
What he's saying: "When HSBC laundered $900 million for the cartels, no one was criminally charged, but when the Tornado Cash wrote some open source code they were crucified," Soleimani said.
- Soleimani put on sunglasses from the NFT project Nouns because the organization behind the project and some of its members were the strongest financial supporters of the defense fund for these developers.
The latest: Developers Roman Storm in the U.S. and Alexey Pertsev in the Netherlands have been arrested.
What's next: Soleimani is part of a team developing a privacy protocol that regulators might be able to get behind.
🕰️ 4. Catch up quick
😖 Hong Kong's securities and derivatives authority issues warning about crypto exchange BitForex calling it suspicious. (SFK)
😯 Bitcoin ETFs climb commodity fund rankings. (The Defiant)
😧 A judge overseeing the Coinbase insider-trading case said trading certain digital assets on secondary exchanges are securities transactions. (Fortune)
🙊 5. Culture hash: Stickers
There were lots of stickers on offer at ETHDenver, Brady writes.
Of note: This was also the first event where I got into using the proof-of-attendance protocol (POAPs). These are free tokens that just prove you were present at something.
- With a quick NFC scan of your phone, your Ethereum wallet can forever hold a little badge.
- Looks like I picked up 18 POAPs at the National Western Complex.
This newsletter was edited by Pete Gannon and copy edited by Carolyn DiPaolo.
Brady and Crystal will be back in NY by the time you open this newsletter! —C & B.