hamsterdam

Wake Up For What?

One of the more surprising occurrences over the past 10 years of politics were friends and acquaintances who were pro Bernie Sanders and later became either Trump supporters or seemingly sympathetic to Trump.

Over the coarse of many conversations with on such friend I discovered that he believed that America is broken beyond repair and that the election of Trump might, in his words, “serve as a catalyst for the fall of the 2 party system.”.

This is a dangerous gamble for two reasons.

First, it misdiagnoses the problem. America was not broken beyond repair. Yes, we had serious challenges—inequality, the cost of housing, institutional distrust, a feckless congress—but we also had a functioning democracy, the rule of law, and a robust economy. Change was possible through the only good mechanism human civilization has invented: democracy. The complaint that “Americans care about things politicians don't act on” is not proof that democracy failed—it's proof that people weren't voting based on what they claimed to care about. Hoping Trump will shock the conscience into action is not using democracy effectively; it's abandoning it.

Second, it underestimates the risk. Trump is not a controlled burn. He can do enormous and irreparable harm—to our democratic institutions, to the rule of law, to a world order that created the most prosperous and free era in human history. Betting on catastrophe as a catalyst assumes you can walk up to the edge of the abyss, peer over, and step back enlightened. History suggests otherwise, the abyss often peers back into you.

For the sake of argument, let's hope that Trump does not lead us into the abyss, and that an overwhelming majority of Americans see the importance of “fixing our problems” as a result of walking up to the edge of authoritarianism, that they “wake up” as my friend says. Even if all of this comes to pass, we are left with a twist on the immortal words of Lil Jon, “Wake Up For What?”

The assumption that Trump will shock people into waking up and dismantling the two-party system misreads what his voters actually want. Research shows Trump's coalition is not a unified movement but a fragmented alliance of groups with distinct identities, competing priorities, and clashing worldviews. Their top priorities are concrete and personal—the economy (93%), immigration (82%), the cost of living, anti-woke, abortion, etc. There is no alignment on structural political reform. When pollsters ask Americans about third parties, 58% say one is needed, but this reflects frustration, not commitment: Republicans' support for a third party actually dropped from 58% to 48% once Trump consolidated power. People say they want change, but research consistently finds that they are not aligned on the type of change they want, and they often simply want their team to win more completely.

Trump is already doing irreparable harm to our country and our values, and it's unclear if enough people will wake up fast enough to stop him from doing even greater harm. But as the data shows, even if they do wake up, they won't wake up to the same vision. There is no unified “aha” moment waiting on the other side of this chaos—just millions of people, still wanting different things, still needing to be persuaded.

That's the part this theory skips over. Democracy is not a vending machine where you insert a sufficient crisis and out comes reform. It's the long, frustrating work of changing minds one at a time. That work was available to us before Trump. It will be waiting for us after—if we're lucky enough to still have the institutions that make it possible.

Hoping for a collective awakening is not a strategy. The only way out is the way we should have been going all along: showing up, persuading people, voting like it matters. Because it does. It always did.

My current view of crypto is that it's a very novel technology in search of a use and so far it hasn't found one that is either important to a lot of people, or that it is actually good at solving. This is why a lot of the pro crypto arguments follow a pattern I call 'kitchen sink' arguments. Crypto is a novel technology, it must be useful for something. Maybe it's good at being a currency, digital assets, smart contracts, stores of value, decentralization of something, etc, etc.

It's interesting to unpack these. In many cases the thing exists already, minus the decentralization. For example, we have digital assets today. I have digital loot in my video games, but that's not what crypto people mean because it's not decentralized. They imagine a world where your loot from world of warcraft can follow you into fortnite, or something weird like that. It turns out this is both very hard, game companies can't balance the economies of their games if they can't control them, and people don't really care that much about it. It turns out they want a fun game more than they care about decentralized loot.

This may seem like a trivial example, so let's look at a more serious one. Today most dollars are in fact digital. They're just records in bank's traditional databases. Digital currencies already exist and work fine without blockchains.

This leads us to the important question, what benefit is crypto? The big “benefit” offered is typically decentralization, but I don't think this is a benefit at all. First, banks help people avoid bad things. In crypto, if you lose your key, you lose your money. There is no remedy. With a bank, if you lose your password or your atm card, or whatever, you can still get access to your money. Score 1 for traditional money.

Second, if someone gets you to give them your key and they steal your money you have absolutely no recourse. Your money is gone forever. This has happened to many tech savvy crypto investors. Can you imagine if regular people used crypto how often they'd lose their life savings! Score 2 for traditional money.

So what is the benefit of decentralization? First, it's important to recognize that modern money is already decentralized to some degree. Bank A doesn't have to coordinate with Bank B unless money is passing between them.

Putting that aside, the most common arguments for crypto are censorship resistance and immutability. No government or corporation can freeze your account, reverse your transactions, or seize your assets. Code is law. The blockchain is immutable. No central authority can override the rules.

Unfortunately none of these claims of decentralization are actually true. The guarantees evaporate when “they” decide it's inconvenient. In 2016, someone exploited a vulnerability in The DAO (a major Ethereum project) and drained about $50-60 million worth of ETH. The Ethereum community faced a choice: stick to the “code is law” principle and let the hacker keep the money, or reverse the transactions to return the stolen funds. They chose to reverse it via a hard fork, effectively rewinding the blockchain and undoing the hack.

So much for immutability. It turns out decentralization doesn't apply to everyone. When enough money was at stake for the right people, the supposedly immutable blockchain became mutable. The decentralization benefit that crypto advocates tout simply disappeared when tested in the real world. Now ask yourself, who made this decision? What voice do you have with the people that can change the blockchain? In the US we have a democracy where you get to vote for the people that make these decisions with respect to the dollar and you know who they are. What do you have in crypto, an un-elected and often unknown group of decision makers that have no accountability to you. Score 3 for traditional money.

This is the pattern with crypto, it's a solution looking for a problem, and when you examine the problems it claims to solve, either the problem doesn't really exist, people don't care about it, or crypto doesn't solve it better than existing solutions.