Cryptocurrency interests played a significant role in the recent election of Donald Trump in the United States, outspending oil companies, banks and Elon Musk, and they have already been rewarded, with Bitcoin now hovering around $100,000USD, a historic high. Now the crypto bros are pushing for ‘sensible’ regulation in Australia, and are hard at work lobbying both sides of politics.
Crypto’s move into the political realm appears to have been spurred by Joe Biden’s moves to regulate the industry earlier this year. Trump has already promised to sack Gary Gensler, Chair of the US Securities and Exchange Commission, who once described the cryptocurrency sector as an industry ‘rife with fraud and hucksters and grifters’.
As with other financial bubbles in human history (remember the tulip craze of 1637?) cryptocurrency is fundamentally worthless. It depends on other humans (bigger fools) to continually buy into the illusion to maintain its Oz-like power. An additional challenge for governments is the currency’s association with libertarians, who believe that tax is for chumps, and that government should get out of their way while they do whatever they want.
The crypto sector wants governments to provide just enough regulation to encourage further investment (giving an impression of a safety net, and the illusion of financial respectability to speculators) while seeking in the long term to supplant reserve banks entirely, ultimately destroying the power of governments to control their own economies, in favour of a new corporate-serf relationship to replace pesky old-fashioned democracy.
This is an idea they have already been road testing in places like Argentina, Honduras and particularly El Salvador, where crypto is now the official currency and human rights abuses are going through the roof, all in the process of creating a paradise for venture capitalists.
America will be next. Will Australia follow?
Financing crime and terrorism
Back in 2019, when he was Home Affairs Minister, Peter Dutton correctly noted that cryptocurrencies were funding terrorism and driving crime, including fraud, but Liberal Senator Andrew Bragg is now saying that the sector would benefit from stronger political advocacy, and that if government doesn’t get on board Australia risks becoming a ‘crypto backwater’.
Reserve Bank Governor Michele Bullock has said she sees no role for cryptocurrency in the Australian economy or payments system, but high ranking figures in the Albanese government and ASIC are already very public crypto-enthusiasts, with forthcoming legislation expected to deliver some of the sector’s wishlist.
Australian Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones recently declared in a joint statement that they took the crypto industry ‘seriously’, asserting ‘we know that blockchain and digital assets present big opportunities for our economy, our financial sector and innovation.’
Albo’s special envoy for cybersecurity and digital resilience, Andrew Charlton, has said that as far as cryptocurrency is concerned, the government is ‘100 per cent committed to delivering reform.’
Labor’s newfound enthusiasm almost echoes a well-known crypto scam from July this year, in which a fake Albo spruiked a fake News Corp article talking up cryptocurrency investment as a way to get rich quick and retire early.
Environmental disaster
Beyond the fraud and greed, the really big problem which most crypto enthusiasts ignore is that their ‘industry’ is an environmental disaster.
Most cryptocurrencies need to be ‘mined’ via a process of making ridiculously complicated, meaningless calculations, in order to provide proof-of-work blockchains. These require enormous amounts of electricity, creating significant greenhouse gas emissions and heat, while also generating staggering amounts of e-waste as the processors involved are constantly upgraded to create more wealth.
When you look at the energy numbers, China’s decision to ban Bitcoin mining, and Peter Dutton’s newfound enthusiasm for nuclear energy both make more sense.
Bitcoin, for example, uses 707.6KW hours of electricity per transaction, and already generates more carbon pollution per year than the entire nation of Greece. A single Bitcoin mining facility in Rockdale, Texas consumes as much electricity as 300,000 American households.
There are greener forms of blockchain technology, but these only represent a small sector of the market.
After all that energy expenditure, massive amounts of cryptocurrency is lost or stolen every year, via crime and malware.
For all the talk of innovation, investment and brave new world, crypto is actually the oldest story in the book; the natural environment and the lives of the poor being sacrificed for the obscene wealth of the few.
Don’t believe the hype.
Originally from Canberra, David Lowe is an award-winning filmmaker, writer and photographer with particular interests in the environment and politics. He’s known for his campaigning work with Cloudcatcher Media.
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