Naomi Klein Hits 'Crypto-Colonialism.' A. Antonopoulos Would Disagree.

Naomi Klein Hits ‘Crypto-Colonialism.’ A. Antonopoulos Would Disagree.

As famed environmentalist and author Naomi Klein lashes out against bitcoin and “crypto-colonialism,” Bitcoin evangelist and security researcher Andreas Antonopoulos has an opposite stance on the misconceptions being spread by mainstream journalism surrounding bitcoin’s energy consumption.

Also see: Binance Finds New Home in Malta to Secure Regulatory Certainty

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The Debate on Energy and Crypto

In typical fashion Antonopoulos has managed to succinctly condense a complex topic in a way that highlights the way misconceptions are peddled in the media. The “energy consumption” argument, which has recently been made in publications such as the NYT and Politico, acts as another way to tarnish the reputation of cryptocurrency during a time when climate change is a highly charged topic in society.

Perhaps unsurprisingly then, climate change advocate Naomi Klein has also launched a scathing attack on bitcoin, calling it “the most wasteful possible use of energy” whilst also labeling some of the cryptocurrency industry’s leading figures as “tax dodgers.”

Klein pictured.

Klein is the author of the highly regarded books The Shock Doctrine and This Changes Everything, and she certainly did not mince words when referring to the current situation in Puerto Rico after the devastation of Hurricane Maria, noting that the environmental disaster has ushered in the familiar calls for privitization and reform.

These are the central themes to Klein’s bestsellers — the neoliberal agenda to underhandedly impose free market ideologies in crisis affected countries and the myopic preference for profit over the environment — and they seem to be in play in disaster-ravaged Puerto Rico. However, in her opinion piece for The Intercept, Klein’s villains seem to be newly minted cryptocurrency millionaires as much as neoliberals, characterizing leading cryptocurrency figures as opportunistic charlatans, and equating them to the colonizing powers of the new world that made slaves out of once free nations. To this end, she also attacks bitcoin for its energy consumption on an island she argues would run better on solar power, even though she admits that cryptocurrency mining on the island would be unprofitable due to the high cost of electricity.

While Antonopoulos is not directly referencing Klein, his comments on the CASE podcast deal with her exact argument here. Whereas Klein labels bitcoin as wasteful, Andreas argues “judgments generally are probably best made by the people who are using it, and not some third-party.” He also states that the journalistic narrative regarding bitcoin’s energy consumption is “a morass of misunderstandings, unscientific extrapolations, and really poor journalism. And all of that just gets conflated into this massive thing where you have all kinds of bias being exhibited — cognitive bias, not worldview bias.”

This bias seems to apply to Klein; it is not up her to decide what is wasteful or not and it is particularly disingenuous to fail to provide context and comparisons, especially when, according to Antonopoulos, “Bitcoin’s energy use is one hundredth of the energy used in mining gold,” a commodity that is “integral to the monetary system that bitcoin is directly trying to replace.”

On Mining

Further, as a dedicated environmentalist and champion of the people, Klein would know the mining processes to which Antonopoulos refers when he states there are also environmental costs of mining gold, with “sulphuric acid going into rivers, to denuding hills, to destroying mountains,” but Klein neglects to mention these or the fact that electricity consumption is an unavoidable trade-off, necessary to secure the first decentralized protocol that has the ability to take power away from the very same group that forgess through Shock Doctrine policies a wealthy, ideological neoliberal elite, those that Klein rallies against in her books.

Instead Klein goes on to comment that “Mining cryptocurrencies is one of the fastest growing sources of greenhouse gas emissions on the planet” without giving an actual number (it’s 0.29% of world emissions), only going further to say that it “is growing by the week.” Most of the concern regarding energy consumption derives from a single source, notes Antonopoulos: “The Digiconomist,” whose methodology of reporting energy consumption seems to be accepted “uncritically.”

Antonopoulos also points out that because bitcoin’s energy consumption is relatively easy to calculate, it becomes an easy target, unlike competing payment processors like Visa. “In Bitcoin it’s right there, you can open one website, look at the math and figure it out pretty quickly, and then you can attach it to a non-dependent variable, do a stupid extrapolation and write a sensationalist article.” However with Visa “it’s a hidden cost” as the whole scope of their usage is difficult to determine as it must include buildings, the commute of employees, and a multitude of other necessities for the conducting of business. Likewise by using an electronic protocol, costs and the environmental impact of things like physical storage are erased.

Prompting this concern by omission is disingenuous and something that Antonopoulos references by giving an example of the flawed logic employed in this argument: “If this pregnant lady’s belly is THIS large at 3 months, then in 5 years, it will be as big as this entire room.”

Tarring Crypto as a Whole

In regards to Klein and Puerto Rico, the fact that it is effectively bankrupt is not in dispute. As Klein notes, it is a small island that has been taken advantage of throughout much of its history even as the local population fights to maintain its identity and way of life. She would like to see the island put back in the hands of the people rather than of government officials more concerned with power and lining their own pockets.

But that has little to do with bitcoin, as much as Klein attempts to promote bitcoin and cryptocurrency enthusiasts as cultists who are planning to emigrate to Puerto Rico to buy up their on slice of utopia without consideration for the local population.

To this end Klein, vaguely references Brock Pierce’s ambition without clarifying any plans of his or other crytptocurrency leaders to give back to the stricken island. Instead she calls Pierce’s circle “an unruly hodgepodge of Ayn Randian wealth supremacy” and notes, condescendingly, that “there is something about rapidly becoming rich from money that you literally created — or ‘mined’ — yourself that lends an especially large dose of self-righteousness to the decision to give nothing back.”

This highlights Klein’s obvious bias, lack of understanding of the Bitcoin protocol, and the potential it has to change global commerce, as well as her lack of research; Klein attempts to tar the whole movement with the same brush (“the true religion is tax avoidance”) but neglects to mention that other newly wealthy Bitcoiners have been extremely generous in their philanthropy, an example being The Pineapple Fund which has given away millions of dollars of crypto profits to charities around the world.

There is also no mention of the potential for bitcoin to provide financial inclusion for large numbers of people that Klein rallies so hard for. As Antonopoulos says, “billions of people are completely excluded from economic participation because they do not have adequate documentation or political power to be granted access to a vetted system of finance.”

Klein, though, is caught up in her impression of crypto millionaires as the new profiteering elite.

There is, of course, a glaring contradiction in Klein’s insulting message here to Brock Pierce: because you are wealthy you should not try to minimize your taxes, but instead pay your money to the very governments that enable wars, corruption, and ongoing economic colonialism.

Klein’s heart lies in the right place. Offering wealthy individuals tax breaks while taxing the poor at a standard rate is not fair in many ways, but with the current economic system in place, it has been the strategy favored, or perhaps imposed, by hegemonic powers as a way to attract capital and investment to struggling jurisdictions.

Still, despite the disdain she shows for bitcoin, many bitcoiners share Klein’s opposition to the current system, but aim to enact change in a different way: by valuing censorship-resistant money, financial privacy and decentralization. Antonopoulos says that being able to this with a computer protocol is dependent on security and “You can’t do the security of Bitcoin without the [investment in] energy,” therefore the energy in Bitcoin is not wasted, it’s used to make the network “secure” without central authority.

The diverging fates of the crypto figures who have become millionaires and the people of Puerto Rico who are suffering immeasurably on the same island is not a divergence to be dismissed, however the crypto industry will continually have to be on guard to counter the disinformation proffered by both uninformed commentators and a media industry desperate for clicks and captured by elite money. The way to achieve this is not through derision or division but the sustained promotion of shared ideals.

What’s your take on Naomi Klein’s arguments? Sound off in the comments below. 


Images via Maclean’s, Slate

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