The Breakdown - Crypto Values for a New Era

Episode Date: January 26, 2025

A reading and discussion inspired by https://www.coindesk.com/opinion/2025/01/22/ross-is-free-now-let-s-free-the-internet-of-money Sponsored by: Ledn Need liquidity without selling your Bitcoin? For 6+ years, Ledn has been the trusted choice for Bitcoin-backed lending. With transparency, security, and trust at our core, we help you access your BTC’s wealth while HODLing. Discover what your Bitcoin can do at ledn.io/borrowing. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribe to the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Sunday, January 26th, and that means it's time for Long Read Sunday. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link of the show notes or go to bit.ly slash breakdown pod. Well, friends, here we are at the end of the first week post-new Trump administration, post-inaguration. And as you might imagine, that means that there were lots of choices for Long Read Sunday this week.

We could have discussed a new digital age at the SEC. We could have talked about meme coins. We could have talked about things going on with the Ethereum Foundation. But what I chose instead was a piece by Blake Benthal called Ross is Free. Now let's free the Internet of Money. Blake writes, following Ross Albrecht's part in the Trump administration must follow through on crypto's potential to spread privacy and financial innovation. Let's turn it over to the AI version of me from 11 Labs to read the piece, and then I will come back and finish off with a few thoughts

of my own. The release of Ross Ulbricht and the lifting of sanctions on tornado cashmark pivotal moments for the crypto community, it's more than symbolic. It's an opportunity to clearly rebrand the U.S. as a safe place to build the Internet of money. Ross's freedom comes after over a decade of imprisonment, a journey defined by relentless advocacy, legal battles, and unwavering support from the crypto community. His release matters deeply to me because over a decade ago, I launched Silk Road 2.0 his site's successor. His double-life sentence without parole wasn't just about the Silk Road, though. It symbolized the U.S. government's resistance to the blockchain industry and to the idea of a financial system controlled by individuals instead of big banks. The U.S. dollar is the World Reserve

currency, and cryptocurrency has given the world democratized access to this reserve via stablecoins. Satoshi Nakamoto announced Bitcoin as a peer-to-peer electronic cash system, and the Silk Road was the first to actually execute that vision. Silk Road opened the door to cryptocurrency and introduced Silicon Valley and many other groups to Bitcoin. It spawned companies like Coinbase, projects like Ethereum, and paved the way for stablecoins, which are not yet private. Still, there is no legitimate marketplace for buying and selling things with Bitcoin. Our industry's reputation is that we're highly speculative and scam-filled. We can't forget that Satoshi created Bitcoin for payments, not speculative. the U.S. cannot miss out on the Internet of money. During previous administrations, global

developers have become nervous to even attend conferences hosted here. This has consequences for the U.S. crypto industry. Ross's release is a clear signal that the U.S. is no longer a scary place to innovate in cryptocurrency. His experience underscores the need for proportionate justice and serves as a reminder of the human cost of overreach in regulating innovation. His release is an opportunity for reflection to celebrate his freedom while remaining clear-eyed about the past. Ultimately, his harsh sentence stymied Bitcoin innovation for all of us. We must ensure his case becomes a catalyst for constructive change rather than a footnote in a history of missed opportunities, a series of meme coins, or a divisive narrative that further erodes trust. Similarly, the case of Tornado

Cash founder Roman Storm, who is still in legal jeopardy, clearly shows the dangers of criminalizing innovation. Tornado Cash offers a critical function, a mixer, in enabling private Ethereum transactions, an essential component of conducting business competitively. If you've been around Bitcoin for long enough, you've heard the term hoddle and the name Leden. Lennon has been the go-to leader in Bitcoin lending for over six years. They help clients unlock the liquidity of their Bitcoin, allowing them to hoddle while still accessing the wealth of their BTC. They've been battle-tested with their focus on transparency, security, and trust, allowing them to build a proven track record of client's success and security.

Letin has helped tens of thousands of clients harness the value of their digital assets, issuing more than $6.5 billion in loans over the years. But as the crypto industry says, don't trust verify. Check out Ledin's trust pilot or their reviews on social media. And to learn more about what your Bitcoin can do for you, check out ledin.com. That's LEDN.com.I.O. slash borrowing. Please visit leaden.com slash legal for product terms and disclosures. Product availability varies by jurisdiction. It's important to create privacy technologies, but we also need to understand the line between legal and illegal use cases. Yes, launch the Silk Road, but don't allow the sale of drugs on it.

Launch tornado cash, but don't encourage money laundering on it. The chilling effect that both cases have had on developers like me cannot be overstated. Privacy innovators in the U.S. and abroad are now second-guessing their work, fearing legal repercussions for creating tools that protect privacy. And what do you do when you launch something decentralized that takes on a life of its own? The Sanctions on Tornado Cash were deemed unlawful by the Fifth Circuit Court, yet the Department of Justice dismissed the ruling as irrelevant. Tornado Cash's developers were allegedly aware of its misuse for money laundering but did not act decisively to address it. On a decentralized platform, should its initial developers be responsible for users' activity? There is a clear need for

America to define a Section 230 for developers of decentralized software to not be criminally liable for what their users do on their platforms. Section 230 refers to a law-freeing social media platforms from responsibility for content published on their networks. As entrepreneur politician Vivek Ramoswamy said, you can't go after the developers of code. What you actually need to do is go after individual bad actors who are breaking the laws that already exist. To move forward as an industry, we need to separate the tools from the misuse of those tools. Privacy technologies like Tornado Cash, Monaro, and Zikash are unfairly stigmatized due to their potential use for illicit activities. But they hold transformative potential for legitimate use cases, from safeguarding personal financial

data to enabling secure business transactions. Zcash, with its optional shielded transactions, provides individuals and businesses with the ability to conduct secure private transactions, while remaining compliant with anti-money laundering, AML, and know-your-customer K-YC regulations. Such innovations bridge the gap between cryptocurrency and traditional industries, empowering businesses to adopt crypto without exposing sensitive financial details. Privacy tech like Zcash also addresses a fundamental flaw in Bitcoin and other public ledger cryptocurrencies, the exposure of transaction data that creates competitive disadvantages and privacy risks. Soon, Zcash will be on Maya chain, allowing a decentralized way to convert between Bitcoin

and Zcash. It will also soon support Zs, shielded assets, which will enable stablecoins to be issued privately for the first time. The new administration has proposed a national, strategic Bitcoin Reserve, but this raises questions about privacy and decentralization. Unlike other reserves, such as gold, Bitcoin's blockchain discloses deposits and withdrawals to the public forever. Is the Trump administration aware of this? This level of transparency is a double-edged sword, making privacy technologies even more essential for maintaining competitive and strategic advantages. So, where do we go from here? Bitcoin and the broader cryptocurrency industry are at a crossroads. This is a moment to refocus on the principles that drove early adoption. A perception of privacy,

financial freedom, and most importantly, peer-to-peer payments. The U.S. crypto landscape, currently a mess of regulatory uncertainty, scams, and collapses, needs re-evaluation. Rather than demonizing privacy innovations, policymakers must work with developers to create clear and for responsible uses of electronic cash. This means proactive education and collaboration with regulators, more investment in privacy technologies, and development of a regulatory framework that encourages U.S. blockchain innovation. All right, back here, real NLW to give you a few thoughts. First of all, let me caveat this. As is always the case when I read pieces on this show, it's not because I agree with every single word of them. It's because I think they have something to say that's worth thinking about. In this case,

Blake is much more comfortable calling things like the exposure of transaction data a fundamental flaw in Bitcoin, as well as making a strong argument that Bitcoin is for payments, not for speculation, restore a value. But just because I differ with him there doesn't mean I think that the piece is illegitimate. In fact, I think that there's a lot that's important here. I think that Blake is exactly right, that the purpose of celebrating Ross's release is not just about what one person. Instead, it's about symbols and about a push for the world that we want to create and a push for a world that we think that Bitcoin and crypto can create. I think he's right to call out that there remain other cases, which are still challenging. What matters most to me is that

as this new administration gets online, we've already seen that there's going to be a fracture in the constituency and that the crypto lobby is not just going to be one crypto lobby. The challenge that creates is that we're no longer speaking with one unified voice based on having a common enemy. The opportunity that that creates is that it gives us a chance to actually decide what matters to us, what we want this lobby to stand for. We get to fight first amongst ourselves and then on a broader public stage to try to bring the values that matter most to us about this industry and about this technology to a wider audience. For the first time, in a very long time, there is a platform to actually project those ideas farther,

and so it's worth taking the time, I believe, to actually remember what it is that we're fighting for. For now that that is going to do it for this week's Long Read Sunday. appreciate you listening as always, and until next time, be safe and take care of each other. Peace.