Coinbase CEO Brian Armstrong recently sparked a firestorm by announcing his company would now be “apolitical.”
In a memo posted on Medium, Armstrong argued that political divisions were undermining productivity, and Coinbase should remain laser-focused on its mission. The company then offered severance packages, giving employees until Wednesday, Oct. 7 to send a form signaling their interest. Staying at Coinbase would indicate you are on board with the company’s new direction, Armstrong wrote.
Emily Parker is CryptoX’s Global Macro Editor.
Twitter CEO Jack Dorsey pushed back on the memo, pointing out that Armstrong’s position is incongruous with Bitcoin, which is direct activism at an exclusionary financial system. In response, Armstrong said: “We are political about one thing: our mission. (This includes Bitcoin, crypto, economic freedom, etc.)”
Armstrong would like to have it both ways. He wants to be apolitical about the disruptions that make him uncomfortable, but political about Bitcoin’s mission to disrupt the world. This position is not only somewhat incoherent, it undermines the core principles of Bitcoin.
Here are a few reasons why.
Bitcoin is value-neutral
It is not controlled by any government or political party. It is designed to be resistant to censorship and cannot be shut down. It can be embraced by freedom fighters and money launderers, human rights activists and scammers, liberals and conservatives alike.
Yes, as Dorsey points out, Bitcoin is meant to disrupt the status quo – i.e., the power of banks and the traditional financial system. At the same time, Bitcoin aims to change the world without pledging allegiance to any political camp. So in that sense, Bitcoin is apolitical.
Armstrong’s position is nothing like this. Rather, he is pushing for a status quo that many Americans, including his own employees, are actively rejecting. You can disagree with those employees or dislike their tactics, but it is illogical to say their position is political while Armstrong’s is not.
This post by Ranjan Roy and Can Duruk sums up Armstrong’s stance: “Political apathy is not a neutral stance, but a strongly conservative one, almost by definition. When there are competing forces, one trying to pull you in [one] direction and another forcing you to stay where you are, saying that you’d rather not move is picking a side, not removing yourself from the equation.”
Unlike Bitcoin, Armstrong’s mission is not value-neutral. It is advocacy disguised as neutrality.
Bitcoin is censorship-resistant
The beauty of Bitcoin’s decentralized technology is that it can’t be shut down by any person or entity. Bitcoin makes governments nervous, and for good reason. It gives individuals power over their own money in a way that can dilute the power of the state. In countries like Russia, where political dissidents are targets of bank freezes, Vladimir Putin’s opponents use bitcoin to raise funds. The Kremlin doesn’t like it but it doesn’t have the ability to shut the Bitcoin network down. China has cracked down on cryptocurrency exchanges and public sales but has not been able to stop people from buying and selling bitcoin.
Censorship resistance is not the spirit behind Armstrong’s memo, which is a top-down directive that declares: “We won’t debate causes or political candidates internally that are unrelated to work.” Clearly, not all employees are on board with this direction, and some appear to have different ideas about which causes are “related to work.”
According to reporting by Wired, the memo has left Coinbase employees confused about which topics are off-limits. Rather than say clearly what you can and can’t say, Coinbase has issued a vague edict that will cause people to curb their own speech. Often, they will err on the side of excessive caution. At the risk of sounding melodramatic, creating an atmosphere of self-censorship is a classic authoritarian tactic.
Armstrong’s argument is that the company can’t focus on everything, and he is just trying to cut out noise that distracts the company from its larger mission. Some may be sympathetic to this position but it’s hard to call it censorship-resistant.
Bitcoin cuts out the intermediary
Bitcoin was created to be a decentralized form of money that cuts out the intermediary.
Just look at the Bitcoin white paper. Satoshi Nakomoto wrote: “Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.”
Armstrong’s memo highlights an awkward truth about Coinbase: Rather than disrupting the third party, Coinbase is that third party. Far from being a punk rock “disruptor,” Coinbase is a centralized financial institution. While bitcoin is supposed to be a relatively private form of money, setting up a Coinbase account feels a lot like setting up a bank account, and the company knows a great deal about you.
Coinbase has not consistently adhered to Bitcoin’s ideals of freedom and privacy. One well-known example was its acquisition of the spyware firm Neutrino, which sparked a #deletecoinbase campaign.
This battle for the soul of crypto is much bigger than Coinbase itself. Some compromises may be necessary for Bitcoin to reach mainstream adoption, but where do you draw the line? At what point does Bitcoin lose the characteristics that made it special in the first place?
Bitcoin is revolutionary. It was born in the wake of the global financial crisis, with an explicit mission to disrupt the banking system. It allows billions of dollars to flow around the world without government oversight. And revolutions, especially decentralized ones, tend to be messy. Coinbase is trying to embrace disruption in some areas while chilling it in others, based on a CEO’s judgment over which disruptions are more important.
For better or worse, Coinbase plays an outsized role in the cryptocurrency industry, which is why the memo is getting so much attention. So when Armstrong claims that his mission is about “Bitcoin,” it’s worth asking what that really means.
