Implications of Cryptocurrency

This document is designed to help readers understand cryptocurrency and its role in the rise of tech fascism. Venture capitalists often mystify cryptocurrency in order to cover up its true function; however, you do not need to have a technical background to understand it.

Cryptocurrency is a financial system created by tech billionaires and venture capitalists. Rather than being the currency and financial system of a sovereign nation-state -- like the dollar and the American stock market -- crypto is a financial system controlled and owned by venture capital, outside of nation-states. Cryptocurrency is a direct challenge to the existing and sovereign financial system of America and countries around the world.

A parallel financial system, cryptocurrency is designed to live alongside existing systems while absorbing resources into itself. For example, sovereign currencies like the dollar are traded for assets in the parallel system. Cryptocurrency has allowed billionaire venture capitalists to amass significant wealth, transfer wealth from sovereign nations and peoples into their infrastructure, and increase their penetration in global markets.

Cryptocurrency has been built up by tech billionaires over more than 15 years, and across thousands of startups. Andreessen Horowitz, a key player in the Network State, is one of the dominant funding sources in the industry. Peter Thiel has also been a central figure, stating in 2022 “Bitcoin is the most honest market in the world. It’s the most efficient market… It is telling us that the central banks are bankrupt, that we are at the end of the fiat money regime.” Of PayPal, co-founded with Elon Musk, he stated: “PayPal had a suitably grand mission — the kind that post-bubble skeptics would later describe as grandiose. We wanted to create a new internet currency to replace the US dollar.” (Emphasis added.)

After many years of development, cryptocurrency is now a fully featured financial system able to compete on the global stage, and with sovereign financial systems. Venture capitalists have crypto banks, loans companies, point of sale systems, retail offerings, cybersecurity, integrators, and many other elements of a sovereign financial system.

One of the largest crypto companies, Coinbase, is working on a stock market. Coinbase is backed by Andreessen Horowitz. It has launched the "Coinbase 50" index, explicitly modeled after the S&P 500. Coinbase is moving aggressively towards offering stock on its Base blockchain, starting with its own $COIN stock.

A blockchain is simply a system for recording transactions, such as the purchase and sale of crypto and other assets. There are a number of different blockchains. In this case, Coinbase's Base is designed to create a new financial backbone for global commerce, and to replace the "legacy" financial system, including the existing stock market. A Coinbase executive said "Base’s north star is to build a global economy, on-chain… We are going to bring $1 trillion+ assets to Base and it’s going to happen faster than anyone expects – still day one." The same executive has stated "every asset in the world will be on Base." Crypto's higher-level services -- like stock markets and real estate tokenization -- propose a massive power shift from existing financial systems towards the venture capital financial apparatus.

Crypto and the Network State

Crypto is powering the rise of the Network State. The Network State is the effort of tech billionaires and venture capitalists to establish their own nation-state, made up of distributed colonies or "nodes". They are building the Network State via "parallel" systems, such as their colonies, media outlets, social media, crypto, etc. The parallel system/society is described in the Network State book as "draining citizens away from the establishment." Similarly, crypto drains assets away from nation-states and their citizens, and into the venture capital system.

All Network State sites run on crypto, much of its funding comes from crypto gains, and it is organized by crypto venture capitalists and startups. The Network State site Praxis, backed by Sam Altman, Peter Thiel, Marc Andreessen and major crypto companies like GEM Digital, is a key example. Praxis has called the Network State "crypto's end game", stating "As Nation States falter, Network States – aligned onchain communities with aspirations of statehood – will emerge as the next global political paradigm. Network States offer a path to crypto’s next wave of adoption by integrating onchain infrastructure into the parallel institutions supplanting the global system’s core functions. Praxis is building the world’s first Network State: an onchain community crowdfunding projects aimed at realizing our vision for the future – starting with a new city." The location of the city is still unknown, but Praxis attempted to buy Greenland in 2023.

The fundamental definition of the Network State, as provided in the book The Network State by Balaji Srinivasan, includes "an integrated cryptocurrency". Balaji Srinivasan was a long-time partner at Andreessen Horowitz, and former CTO of Coinbase. Brian Armstrong, the CEO of Coinbase, has stated "Crypto's destiny is to help create physical territories (special economic zones) in the world where freedom is preserved. This process has already begun." Special economic zones, or SEZs, are the main way that the Network State achieves land and lawlessness.

On the heels of Trump's inauguration, Coinbase announced its investment in Próspera, the Network State colony in Honduras. Per CEO Brian Armstrong: "We’re excited to invest in @ProsperaGlobal which is creating special economic zones in various countries (the first one in Honduras, hopefully eventually in the U.S.). This is very much in line with our mission of creating economic freedom, and these zones will be heavy users of cryptocurrency. They may start small but can eventually help improve entire countries."

Attack on Democracies and Institutions

In the United States, advocacy for cryptocurrency has taken the form of major attacks on United States regulatory bodies by venture capital, as well as massive election manipulation. In 2024, venture capitalists poured hundreds of millions of dollars into manipulating the US election through massive super PACs Fairshake and Stand with Crypto. These were started and supported by venture-capital backed crypto companies like Coinbase. Additional funds flowed into the Trump campaign through major donations from crypto barons like Marc Andreessen and a large web of crypto companies and venture capitalists. As a result of the corrupt election, cryptocurrency is now the beneficiary of new, favorable policy and appointments, and is even being looked at as a potential strategic reserve of the United States. The Department of Government Efficiency, helmed by Elon Musk and designed to gut government agencies according to venture capital interests, bears the same initialism as the DOGE memecoin.

Crypto is fundamentally motivated to disrupt and supplant existing financial systems, so that those resources can be onboarded onto its new financial systems. Crypto is inherently incentivized to move existing resources and assets from sovereign, nation-state financial systems into itself. It is a direct competitor to the existing financial system. This puts it in a hostile position to the nation-state, seen in the protracted attacks on the American regulatory system and compromising of the American democracy to secure dominance.

It emerges that cryptocurrency causes the transformation of democracies with sovereign currencies, into far-right, authoritarian states backed by cryptocurrency and corrupted by venture capitalists. We see this in the United States, where crypto companies compromised the United States election to pave the way for the rise of crypto. In El Salvador, under a far-right dictator, Bitcoin has been adopted as legal tender and turned into a reserve asset as Bitcoin mining becomes a key industry, crypto tourists flood the country and foreign venture capitalists are installed in the government. The administration is working to build "Bitcoin City" and is often referred to as "Bitcoin Country" as the country is internationally condemned for human rights abuses and has locked up over 1% of its population. The international crypto body is increasingly active in the election of far-right politicians globally, as seen when the fascist Javier Milei of Argentina was elected amid a flurry of crypto activity and Bitcoin gained 3% on his election.

Crypto is a mechanism through which tech fascists can enter foreign countries, corrupting politicians and interfering in democracies, promising financial freedom and prosperity, but in reality building power, extracting resources and exploiting labor. This has been called crypto colonialism by many observers, epitomized in the Network State colony of Próspera in Honduras -- backed by Marc Andreessen and Peter Thiel, two of the biggest crypto VCs.

Right Wing Networks

Right-wing extremists have long used cryptocurrency to raise funds for their causes, and in order to evade bans by established financial institutions and services. Crypto has funded numerous hate sites including the neo-Nazi website Daily Stormer. Richard Spencer has called Bitcoin the “currency of the alt right”. Hatewatch, from the SPLC, states "The extreme far right’s early embrace of cryptocurrencies such as Bitcoin and Monero has allowed them to expand their movement and to obscure funding sources," and is tracking cypto addresses used by hate groups including 8chan, Infowars, Bronze Age Pervert (a key influencer of tech fascism), Committee for Open Debate on the Holocaust, Gab, KiwiFarms and White Date. This points to how crypto has been used to fund a far-right "parallel media", a major pillar of the Network State. Rumble, a far-right version of YouTube funded by JD Vance, announced it will support Bitcoin for payments between users, and has recently started accumulating Bitcoin.

Crypto is widely documented for early and disproportionate adoption by the right, as well as the spread of right-wing ideology. This is explored in the book The Politics of Bitcoin: Software as Right-Wing Extremism, published in 2016: "in the name of this new technology, extremist ideas were gaining far more traction than they previously had outside of the extremist literature to which they had largely been confined. Dogma propagated almost exclusively by far-right groups like the Liberty League, the John Birch Society, the militia movement, and the Tea Party, conspiracy theorists like Alex Jones and David Icke, and to a lesser extent rightist outlets like the Fox media group and some right-wing politicians, was now being repeated by many who seemed not to know the origin of the ideas, of the functions of those ideas in contemporary politics. These ideas are not simply heterodox or contrarian: they are pieces of a holistic worldview that has been deliberately developed and promulgated by right-wing ideologues."

Wealth Concentration

The financial future of venture capitalists depends on the success of the crypto financial system. In 2024, cryptocurrency was a significant contributor to the accumulation of venture capital wealth, with Bitcoin's value increasing by more than 120% to over $100,000, and massive gains in the market cap of major crypto exchanges like Coinbase and Robinhood. As crypto has entered a bull run, the wealth of the tech class has exploded. Venture capitalists, as the biggest crypto investors, saw the value of their companies increase dramatically.

Despite promising financial freedom and prosperity, the distribution of Bitcoin is far more unequal than even the American financial system -- "around 1.86% of wallet addresses — over one million — hold more than 90% of all total BTC currently in circulation." This suggests that ownership is for a small ruling elite. Concentration will only continue as the cost of Bitcoin rises, and is baked in so deeply that it is unlikely to ever reverse. Bitcoin holders -- heavily leaning towards the tech elite -- grow more and more wealthy by the day, producing a new class of crypto multi-millionaires and centi-millionaires, many with the far-right politics of its origins. Meanwhile, poor people are unable to benefit from this wealth grab as they don't have money to invest, or the ability to hold assets over long periods required to see gains.

Cryptocurrency has been used to scam billions of dollars from the America people. In 2023, the FBI alone received more than 69,000 complaints and $5.6 billion in reported losses. Many others lose money, and sometimes their entire life's savings, in gambling on memecoins and other speculative crypto products.

Bitcoin Maxis

Bitcoin Maxis are people who believe that Bitcoin is the best "currency", and that Bitcoin is or will become the most important financial system in the world, subsuming most or all competitors. Such events, of course, would cause their Bitcoin investments to reach maximum value.

Bitcoin Maxis are often evangelists who promote their financial ideology through books, podcasts, social media and conferences, aiming to enshrine Bitcoin as more than a technology, but a total economic solution to global problems. Many believe that the global economy will be moved or forced onto Bitcoin and all other currencies will become subordinate or eliminated.

Michael Saylor of Microstrategies -- a publicly traded company that gives investors indirect exposure to Bitcoin and is widely considered a grift -- is one of the most prominent Bitcoin Maxis in the world. He has stated, "Over a long enough timeline, everything is going to zero vs. #Bitcoin." This sentiment has been echoed frequently by Bitcoin Maxi Max Keiser, who serves as the senior Bitcoin advisor to El Salvador's dictator, Nayib Bukele; stating "Everything goes to zero against Bitcoin." Additionally from Michael Saylor, stating: "Bitcoin links together 8 billion people, links together a hundred million companies, it synchronizes the world across political jurisdictions, and it returns rationality to the entire financial system, and it returns freedom and property rights to the entire human race." He told CNBC "Ultimately, I think the right way to think of it is, it's always going to be the stronger capital asset versus a conventional S&P index." He has stated "Bitcoin is money. Everything else is credit" and "Bitcoin is the solution. Everything else is noise".

The attitude of Bitcoin Maxis is well summarized by the book The Bitcoin Standard by Saifedean Ammous, another economic advisor to El Salvador. Ammous consistently and ahistorically portrays past currency collapse caused by colonialism and imperialism, as the result of superior monies replacing inferior ones. Ammous and the work of other Bitcoin Maxis presents a picture of currency collapse via colonial invasion and economic attack, of Bitcoin as the superior currency winning out over "inferior", sovereign currencies, and of transition onto Bitcoin a matter of inevitability... whatever the fallout.