Cultural and political shifts in Washington have suddenly created support for one of the most significant internet innovations of the past 15 years: blockchain technology, whose uses include but are not limited to cryptocurrencies, and which recently gained bipartisan support in both houses of Congress.
On May 23, the SEC approved a type of spot-market exchange-traded fund (ETF) for a cryptocurrency called Ethereum, the second type of ETF after Bitcoin to give traditional investors exposure to cryptocurrencies and to be approved by the SEC, crypto's most skeptical regulator. The same week, the House of Representatives passed FIT21, a bill aimed at bringing regulatory clarity to a digital currency industry that has been begging for a decade for clear guidance on how to operate within the bounds of U.S. law.
Striking the right balance between regulatory compliance and the decentralized finance that blockchain-based cryptocurrencies promise will take time, and will likely never be perfect. President Biden vetoed a resolution to overturn SAB 121, highlighting the division within the Democratic Party over how the technology should evolve. But given the stigma that blockchain technology innovation has been clouded under the banner of opaque cryptocurrency failures, such as the collapse of Sam Bankman Freed's FTX, the sudden bipartisan political interest in crypto-native technology is a very positive development for the future of the new internet.
Over 50 million Americans now own some form of cryptocurrency. Even traditional financial institutions are moving on-chain to improve payments, reduce friction and human error, and increase global access to monetary assets. But the benefits of blockchain go beyond financial applications.
With cryptocurrency in the spotlight this year and an election year with both presidential campaigns reportedly turning their attention to it, it would be a missed opportunity if I didn’t take a moment to re-introduce ourselves to our industry and what we’re fighting for.
It's not just crypto
The cryptocurrency ecosystem offers much more than new financial products: a new approach to the internet, based on blockchain technology and often referred to as “Web3,” improves the online infrastructure we all use every day to transact, communicate, keep our families safe, and accomplish many of the tasks of our daily lives.
Cryptocurrency is just one application of blockchain, a set of technologies that form a more secure internet as an autonomous platform layer for applications, products and services.
The primary mission of the blockchain building community is to protect data and privacy and put control back in the hands of users. Blockchain-based applications counterbalance the power of big tech companies that are known to abuse their dominant position as middlemen and intermediaries to censor, restrict, and unfairly extract value from their customers. For example, if your email account is hosted on a blockchain-enabled decentralized server, your communications can remain private; big tech companies cannot mine it to serve ads or blatantly sell your data to third parties. Blockchain provides a robust foundation for such privacy technologies.
Blockchain could even mitigate some of the risks of AI, democratizing the pipeline of AI models by making them open-source, transparent, and testable by software developers around the world, and therefore inherently more secure.
Blockchain allows citizens to participate fully and fairly in the economy. The possibilities are wide and often surprising: weather companies that turn local vehicles like drones, cars, and even tractors into weather sensors and reward participants in the form of cryptocurrency; apps that unlock car data to help drivers make smarter maintenance decisions; or apps that allow you to sell your car directly to others in your community at a fair price.
In an election year, blockchain has especially important uses: smart contracts can act as irrefutable proof of identity and on-chain activity, preserving the integrity of local voting processes, and blockchain can be used as a public record of intellectual property provenance, maintaining the accuracy of verified news outlets and helping to mitigate the onslaught of misinformation seen four years ago.
Given all of the current and potential benefits that a new blockchain-based internet will bring to its citizens, economies, and societies, it's no wonder that crypto-native technology is suddenly gaining bipartisan support in Washington.
Government policies that support blockchain technology and provide guardrails to deter bad actors will foster the progress, innovation, and entrepreneurial spirit that is inherent to our national spirit.
As Americans consider how their government can help create a better future, the message from the blockchain community has never been louder: our government owes its citizens a promise to maintain our primacy as the free world's technology innovator.
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