The crypto policy pullback?

And the rest of the week that was.

Welcome to this late-January edition of Slow Build, a newsletter on tech and society from me, Nancy Scola. Hope you’re staying warm — or whatever your preferred temperature is — and thanks for reading.

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AND THEN THERE WERE FEWER ZEROS

Photo credit: cottonbro

This week’s collapse in the prices of popular cryptocurrencies was a chance for crypto skeptics to engage in a bit of schadenfreude, what with New York City’s new Democratic mayor Eric Adams finding himself immediately about a thousand bucks poorer after converting his first paycheck into both bitcoin and ethereum and former First Lady Melania Trump’s attempt to auction NFT-inflected White House memorabilia falling way short of the $250,000-worth-of-SOL target she’d set for it.

It’s juicy stuff, and almost irresistible. Look at these self-important fools and their ridiculous crypto dabblings!

But there’s another side to the price plummetings that will take longer to realize, and that’s a possible pullback from policymakers when it comes to setting rules for crypto for the widest possible benefit for the greatest number of people.

There’s history here. Congress’s interest in crypto has over the last dozen years or so has fairly closely tracked the price of bitcoin. The dollar value of a bitcoin goes up, and lawmakers’ ears perk up, too. Not for nothing did the last really consequential Capitol Hill hearing on crypto — a Senate banking commission session called “Exploring the Cryptocurrency and Blockchain Ecosystem” — happen back in 2018, in the wake of the boom accompanying a big round of initial coin offerings.

And the big crypto companies retreat, too, when crytpo values dip. “In 2019 and the start of 2020, it was crypto winter. Prices were relatively low,” Kristin Smith, the executive director of the lobbying group Blockchain Association, told me during a recent round of reporting. “People sort of hunkered down and conserving resources. Engaging in Washington necessarily became less of a priority.”

Should the current chilliness in the crypto market turn into another winter, there’s a real chance that attempts to regulate cryptocurrencies and distributed finance more generally slow down, too.

That might be good for the “crypto bros,” but it’s arguably less beneficial for everyone else who could benefit from crypto’s possible upsides. And it’ll likely mean less urgency in resolving some of the key debates around virtual money, like this one, between the researcher and designer Sasha Costanza-Chock and Evan Greer, the campaign director of Fight for the Future:

Sasha Costanza-Chock @schock

I'm not at all 'anti-crypto.' I'm a big fan of cryptography. I am, however, anti- tax evasion, money laundering, ponzi schemes, multi-level marketing, and needless waste of energy. [1/n]

Evan Greer @evan_greer

@schock the zaptistas and black panthers and IRA and Palestinian resistance and almost every liberatory social movement throughout history has done a lot of money laundering, just sayin...

Or ones suggested by UNC-Chapel Hill associate professor Tressie McMillan Cottom, who wrote this week about how quickly all this blockchain talk has spread:

I hear about crypto from my educated, high-income academic and writing friends who also shop at Target a lot. I also hear about crypto from financial advisers and college classmates who share stories about making a lot of money mining crypto and trading NFTs. But because of my racial and geographic identities, I also hear about crypto from my working-class friends and family. They are getting messages about crypto from Facebook and Instagram and their friends who have moved on from candle-leggings-timeshare-jewelry multilevel marketing schemes to trading Dogecoin. Crypto and NFTs might be the only thing these diverse groups share in common. For that reason alone, the explosion of these technologies deserves some sociological attention.

That’s “sociological attention” that, too, will likely run parallel to this:

Source: Google Finance

STILL MORE CRYPTO, CRYPTO, CRYPTO:

• The Biden administration is expected to come out in February with some sort of federal strategy document on crypto, in an attempt to supplant the jazzy riffing that has constituted U.S. policy on the top up ‘til now. These pieces of paper are often messaging tools as much as anything else, and exactly what it says is arguably less important than the fact that the White House is saying saying that crypto falls under its — and by extension the Treasury Department, SEC, etc. — falls under its dominion.

• “Facebook’s ambitious effort to bring cryptocurrency to the masses has failed.” The rest of the industry isn’t exactly crying; Facebook’s interest has been an albatross with policymakers.

• The New York Times’ David Yaffe-Bellany looks at “the rise of the crypto mayor” including the poster mayor, Miami’s Francis Suarez:

  Mr. Suarez now styles himself as a kind of crypto diplomat. After taking over this month as president of the U.S. Conference of Mayors, a nonpartisan coalition of city mayors, he urged members to sign a “crypto compact” calling on the federal government to eschew overly aggressive regulation of the industry.

• The Center for a New American Security’s Anthony Vinci and former deputy national security adviser Nadia Schadlow argue that a blockchain-driven Internet is a tool for fighting totalitarians:

  Thankfully, we are on the cusp of “Web3,” a next-generation Internet that could shift the balance back toward individuals. If the United States embraces Web3, it could also offer a pivotal advantage in its ongoing competition with authoritarian states, especially China.

• (This sounds a lot like the “dictator’s dilemma” that Hillary Clinton and others once argued for. And that hasn’t really panned out.)

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AND BEYOND:

• One key way of tracking Putin’s intentions with Ukraine? God help us, TikTok:

  The app, often associated with dancing trends, is now being used to watch a very different sort of choreography: the movement of military forces that could be about to engage in a grave new outbreak of conflict on European soil.

• The CEO of ID.me, the service the IRS is using to photo-validate identity, conceded that it does, in a limited number of cases where users are suspected for fraud, match images against an internally held database — not just self-supplied government documents.

• Protocol’s Issie Lapowsky digs into concerns circulating the Senate’s anti-self-preferencing antitrust bill would limit platforms’ ability to moderate content posted by “similarly situated business users” — for example, Apple banning Parler from the app store. The office of bill champion Sen. Amy Klobuchar, though, says it isn’t too worried.

• The Verge’s Makena Kelly interviews Klobuchar, who offers a bit of intriguing insight when it comes to the social psychology on Capitol Hill vis-à-vis Silicon Valley:

  “Everyone’s trying to win a popularity contest with the tech companies. You’ve got to come to grips that these companies will be fine. They’re trillion-dollar companies.”

• Robert H. Bork, Jr. warns that Republicans are falling into Klobuchar’s “trap” in backing her self-preferencing bill, arguing that it “promises chaos for markets, disruption for consumers, and socialism for American business.” Bork’s both president of the group Antitrust Education Project and the son of the late Robert Bork, the law professor and judge who back in the late ‘70s and early ‘80s brought to life the so-called consumer welfare standard threatened by all of today’s attempts to shift antitrust thinking.

• The Library of Congress is looking for a “director of digital services” responsible for “a full range of digital collections and metadata management” work.

• Over on his Slow Boring newsletter, Matt Yglesias has a long argument against the Census Bureau employing so-called differential privacy, or adding noise to census results in a bid to obscure identity. Yglesias argues that the technique is pointless given that anyone can observe the demographics being obscured

  [B]reaking the concept of fair representation in order to (allegedly) make it harder for someone to find out your age, race, and sex by reverse-engineering Census data is really dumb. Everyone who wants to know this about you can already find out!

  Saucy stuff, but Yglesias is straw-manning a bit here. The big worries are things like en masse matching of census results and geographies to consumer data — not your nosy neighbor being curious about how you’re identifying your race.

• Speaking of both sauciness and corporate consolidation, Bloomberg Businessweek’s Austin Carr goes deep inside consolidation in the hot sauce industry, with a specific look at McCormick’s buying up of both Frank’s RedHot and Cholula. (A recommendation: get yourself some Yellowbird, especially the lately difficult-to-source “jalapeño condiment.” Now that’s the goodness.)

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BOOK CORNER

• For the New York Times, Blake Hounshell and Leah Askarinam review Silicon Valley Rep. Ro Khanna’s soon-to-be-out “Dignity in a Digital Age: Making Tech Work for All of Us”:

  It’s not often that you meet a member of Congress who is eager to discuss the German philosopher Jürgen Habermas.

  But Representative Ro Khanna is not like most members of Congress.

  …

  Khanna studied the German philosopher, famous for his 1962 treatise on “the public sphere,” for insights into how to create what Khanna calls “ideal speech conditions.”

  Khanna traces the book to a 2017 trip to Paintsville, Kentucky to see how tech might benefit the district of Republican Rep. Hal Rogers (a fascinating visit I happened to be on) and since Khanna has tried to walk a fine line as a thoughtful tech critic still optimistic about innovation’s potential. But it can be a challenge to get heard. Thus, in part, the book, which comes out Tuesday.

• And my old friend Alison Fine is coming with a new book, co-authored with Beth Kanter, called “The Smart Nonprofit: Staying Human-Centered in An Automated World.” Now in pre-orders, it offers guidance on how non-profit staffers and board members can “effectively use artificial intelligence without alienating the human stakeholders and donors on whom they rely.”