The United States is in the middle of a new cold war with China. Only, the pitched battles between the preeminent superpower and the emerging one are taking place over the circuitry of computer chips and the terms of service of mobile phone apps.
So, who will win, Chinese tech companies or the US? Actually, maybe cryptocurrency, suggested creator Vitalik Buterin in a recorded conversation with Morgan Beller, a general partner at venture capital firm NFX.
“It’s definitely true that a lot of the conflict, even if it’s a negative-sum for humanity overall, is good for crypto,” said the Ethereum founder after referencing America’s aggressiveness toward Chinese tech companies.
The Trump administration spent the better part of four years arguing that Chinese tech companies were trojan horses for the Chinese government. President Trump attempted to ban the popular WeChat app (used by more than 1 billion people globally) due to national security concerns and also tried to force the sale of video-sharing site TikTok from Chinese-owned ByteDance. Before leaving office, President Trump imposed tariffs on graphics cards from China.
Buterin, a polymath who’s equally at home discussing cryptographic equations and voting reform (in a variety of languages, including Mandarin), believes that’s the wrong way to go about it.
“Basically, if your strategy for handling the scary things that you’re worried about in a Chinese tech company is to go after China, then you’re going to be very vulnerable to any non-Chinese tech company, or anyone from any other part of the world that’s trying to do exactly the same thing,” Buterin told Beller.
Though the US—through bans and tariffs—was professing to protect people from security threats and job losses, respectively, Buterin seems to imply that the centralized power of national governments undermines their attempts at protection.
“And this is where crypto comes in because decentralization is the one way that you can credibly convince people that you actually care about trying to protect people,” said Buterin.
But how does cryptocurrency gain a foothold, exactly, as the two heavyweights duke it out?
Buterin explained a logic problem in which three people take part in a gunfight. Person A is more skilled than B and B is better than C. Who’s most likely to win?
“The reason why this is true is because A and B both know that A and B are each other’s greatest threat, and so they’re just going to basically kill each other, and so C’s the most likely to emerge as the winner.”
If you haven’t guessed, cryptocurrency can be C. It’s not on either side, it’s decentralized and censorship-resistant, and two of its prime roadblocks to adoption are focused on each other.
“Crypto is definitely one of those things that’s well-positioned to be C, that’s the winner of a great conflict between whether it’s one state versus another state or states versus corporations.”
Of course, Buterin is speaking in broad terms about an issue he understands to be complex. For starters, there’s a new US administration. There are also more than three actors—there’s a D and an E lurking somewhere in the scenario.
But given one of his predictions from the interview—that China and the US would soon have the ability to surveil the movements of each other’s citizens via satellite—a decentralized technology operating independently of governments and individual tech companies sure sounds like a winning alternative.
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