Follow the money, political sophisticates have said for decades. But today, we need to follow not just money, but a particular form of money, cryptocurrency.
In what follows, I will try to avoid sounding like Charlton Heston, shouting futilely “Soylent Green is people!” But I think that’s the truth. The coup of the Silicon Valley billionaires is well-advanced. That it is taking place in plain sight makes it not less, but more alarming.*
As has been well-documented, Donald Trump was until recently not a fan of the bitcoin mafia. Only a few years ago, in 2021, he called crypto a ‘scam’ and ‘a disaster waiting to happen.’ In this he was, for once, on target. There is room for disagreement about the potential value of this artificial ‘currency’, but I am persuaded by people like Paul Krugman and Bill Gates that it is, in fact, a scam, a variation on the classic pyramid scheme. By this I do not mean that it can be improperly used as a pyramid scheme, but that it is inherently and unavoidably and knowingly a pyramid scheme, designed to make early investors rich by fleecing latecomers, what Gates calls “the Greater Fool theory.”
In addition it is also, undeniably, a major source of funding for illegal activities ranging from drugs to human trafficking to pornography. It is a vehicle of choice for celebrities and public figures looking to make a quick buck. It has been at the center of major scandals, such as the collapse of Sam Bankman-Fried’s FTX. Creating, or ‘mining’, cryptocurrencies requires huge amounts of energy and is a major reason for increases in electricity demand, requiring new generating capacity and greater use of fossil fuels, all over the world.
But in the last several years Trump has changed his tune. He has become a full-throated booster, promising to end the Biden administration’s efforts to regulate crypto and make the US the “crypto capital of the planet.” His campaign received huge donations from the crypto industry, which also donated heavily to defeat candidates in House and Senate races perceived as ‘anti-crypto’. According to the New Yorker, “Pro-crypto donors are responsible for almost half of all corporate donations to pacs in the 2024 election cycle, and the tech industry has become one of the largest corporate donors in the nation. The point of all that money, like the attack on Porter [Representative Kathy Porter of California], has been to draw attention to Silicon Valley’s financial might—and to prove that its leaders are capable of political savagery in order to protect their interests. “It’s a simple message,” the person familiar with Fairshake said. “If you are pro-crypto, we will help you, and if you are anti we will tear you apart.”
Trump chose a Vice-President, JD Vance, who is close to Silicon Vally crypto enthusiasts, in particular Peter Thiel, who financed his Ohio Senate campaign. After choosing Vance, NPR reported that “Trump’s Vance pick has drawn praise in crypto circles, with investors hoping for lax regulations of the digital currency. In his latest federal financial disclosure, Vance reported that he owns between $100,000 and $250,000 in Bitcoin.” After picking Vance Trump quickly gained the backing of crypto entrepreneur Elon Musk and a host of other Silicon Vally crypto investors and backers. Trump’s new crypto-czar, Silicon Valley investor David Sacks, is a charter member of Peter Thiel’s “Paypal Mafia,” which includes Elon Musk. His appointment was welcomed enthusiastically by the crypto industry, according to The Hill.
Trump just announced the creation of a ‘crypto reserve’, where the US Government is directed to buy crypto from five designated vendors, with the coins set aside to supposedly be used in a financial crisis or to pay down government debt. State governments are moving to allow pension funds and other public organizations to invest in crypto. This is despite crypto’s notorious volatility and the lack of a mature regulatory regime to safeguard crypto investors. Why?
Trump’s enthusiasm is partly due to the opportunities crypto offers to make money and to receive donations/bribes anonymously. The World Liberty Fund gives the Trump family 75% of its revenues. Controversial businessman Justin Sun recently bought $75 million worth of Liberty tokens—a purchase he publicized on social media. On February 26 the SEC announced it was dropping its civil fraud case against Sun for manipulating the price of another crypto token.
Trump is also benefiting from $tRUMP, a ‘memecoin’ which has been marketed to his supporters and could potentially be worth billions of dollars, though investors could take huge losses if Trump decides to cash out. Trump imitator Javier Milei, the libertarian President of Argentina, is being investigated for fraud after he endorsed a memecoin that rose in value and was then ‘dumped’ by early investors.
For the Silicon Valley crypto enthusiasts who played a huge role in getting Trump elected, however, crypto is much more than a way to make money. It is a vehicle for weakening and eventually replacing democratic governance altogether. Crypto is the opening wedge in a campaign to have private mechanisms replace key government functions. These private mechanisms would respond to market forces and replace outmoded democratic systems. Of course, they would be shaped not by a majority of citizens with each person having an equal vote, but by those with the most money.
Here is how Mike Brock, a close follower of Silicon Valley’s ever-morphing ideological landscape, describes it in his recent piece “How Silicon Valley’s Corrupted Libertarianism is Dismantling American Democracy.”
”…figures like Thiel [Peter Thiel, influential reactionary techno-theorist and JD Vance’s former employer and mentor] began to see cryptocurrency not just as a new financial instrument, but as a tool for fundamentally restructuring society. If traditional democracy was hopelessly corrupt, as Yarvin [Curtis Yarvin, a formerly fringe monarchist and anti-democrat blogger who has become influential in tech circles] argued, then perhaps blockchain could enable new forms of governance built on immutable code rather than fallible human judgment. This vision found its perfect technological expression in Bitcoin.
From Yarvin’s early writings during the financial crisis to today’s constitutional crisis, we can trace a clear intellectual evolution. What began as abstract criticism of democratic institutions has become a concrete blueprint for dismantling them. But the key accelerant in this process was cryptocurrency—it provided both a technological framework and a psychological model for opting out of democratic governance entirely.”
Who is Curtis Yarvin and why does he matter?
Yarvin is a blogger and programmer whose ideas have gained a lot of traction with people like Thiel, Musk, Marc Andreesen and other Silicon Valley heavyweights. JD Vance is a fan. Yarvin attended Trump’s inauguration and was seen hanging out with various movers and shakers. This brief summary of his views from a recent piece in the Patreon blog, “The Philosophy Behind Doge: Curtis Yarvin and the Butterfly Revolution,” makes him sound like the villain in a bad Marvel comic, but it’s pretty much on target:
· Accelerationism: the belief that capitalism and technology must be massively sped up and intensified to destabilize existing systems, cause a collapse, and ultimately create radical social transformations
· Techno-Utopianism: the belief that unbridled technology can create the perfect society— at least, for those who control it
· Monarchism/neo-monarchism: the belief that absolute power should be wielded by a single sovereign
Yarvin has outlined publicly the process for making this happen, which requires a populist who calls openly for concentrating power in the Leader (Trump), and then picks a smart CEO (Musk) to execute the plan.
As we watch Elon Musk take a chainsaw to the federal government, his larger purpose is clear. He and his fellow billionaires certainly want to reduce government for classic conservative reasons, to reduce their own taxes and weaken regulation and oversight. But this is not the primary goal. Musk’s DOGE cuts are minute and will do nothing to meaningfuly lower spending or reduce the deficit, the ostensible reasons. The real purpose is to gain access to government networks in order to replace existing institutions with proprietary code, AI, and cryptocurrency. According to Forbes, “Musk has confirmed he wants to put the U.S. Treasury on a blockchain, the technology that underpins bitcoin and other cryptocurrencies—including Musk’s pet project dogecoin.”
Trump’s transition team was heavily funded by Musk and other Silicon Valley billionaires, according to the New York Times. The transition operation was responsible for identifying and vetting who would fill key government positions. The Trump transition was entirely funded by private donors, unlike previous transitions, and Trump has not disclosed who they were despite a pledge to do so.
A love of ‘efficiency’ and hatred for the messiness and slowness of democracy is the through-line explaining the techno-elites embrace of Trump. Trump shares with them a contempt for democracy, and is easily manipulated. He is the ‘useful idiot,’ the battering ram who will accelerate the transition to a new order, designed and run by super-wealthy genius elites.
Scorn for democracy and love of efficiency, we should recall, was the leitmotif of fascism and communism during their heydays in the 1920s and 30s. The future belonged to centralized, top-down systems that would run rings around the decadent liberal democracies. The trains would all run on time. Millions in America and around the world were mesmerized by Mussolini’s Italy, Hitler’s Germany, Stalin’s USSR—great states in the hands of pulverizing leaders who could sweep away opposition and modernize and rationalize everything overnight.
It is men with this same vision who are now at the throats of the American people. These are businessmen who have grown fat under the awful democracy they despise, but are now turning on the system that nurtured them. Unlike in the 1920s, this time, they believe, technology is up to the task. Crypto is the bright shiny object, but AI is the One Ring to rule them all. The willingness of Trump to let the techies pursue AI without obstacles and to fund the massive new energy sources required to build advanced AI models was what drew Silicon Valley to his side.
In a recent Ezra Klein interview with Ben Buchanan, Biden’s top advisor on AI, Klein and Buchanan agreed that radical breakthroughs in AI are coming very soon, probably within the next three years. We will see something like AGI or Artificial General Intelligence. If this happens on Trump’s watch, in an Administration stuffed with AI and crypto advocates, we can have no expectation that there will be adequate safeguards or planning to take account of the repercussions. The people who believe that the correct approach to everything is “move fast and break things” will be in charge.
These forces are taking over the MAGA movement and have bent Trump to their will. They will be hard to stop unless America’s leaders and thinkers first wake up to the magnitude of the threat.
*I recognize the picture I’m painting here may be exaggerated. Maybe there is no Silicon Valley tech billionaire conspiracy and they all just switched to Trump to get less regulation and because they hate wokeness. Maybe Musk really just wants to make government more modern and efficient. Maybe Curtis Yarvin’s thinking is what it seems, a wild sideshow, not central to how the Thiels and Musks really think. Maybe AI isn’t on the verge of a breakthrough to AGI or anywhere close to being able to run big public agencies. Maybe Trump plans to dump Musk and his brethren after they finish their dirty work. It’s always possible to connect the dots in a misleading way. I would say, though, that there is enough information pointing in the same direction to demand we pay attention.
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