2023’s Crypto Characters to Watch

With help from Derek Robertson

It’s a power vacuum – or at least a hole in the public imagination – on top of crypto.

Last year Sam Bankman-Fried made himself the face of crypto in Washington, but now he’s under indictment and his FTX exchange is in tatters, so who will be the face of crypto in 2023?

Well, with crypto industry in crisis it may be someone more closely related to crypto, the idea, using computers and encryption to change the way people interact, rather than the existing constellation of consumer-facing financial businesses using crypto. After all, a back-to-the-drawing-board moment will favor people who like to spend their time on the drawing board.

Of course, there are many high-profile crypto moguls out there, but regulators or market forces have brought most of them back on their heels lately. Binance founder Changpeng Zhao was both a primary instigator and a main beneficiary of Bankman-Fried’s downfall. But both he and his exchange are allegedly opposite possible criminal charges stemming from a money laundering investigation and sanctions by the Department of Justice.

Coinbase CEO Brian Armstrong can point to the protections that come with being a publicly traded US company, but his exchange announced earlier this month that it was laying off 20 percent of its workforce. On Friday, the Federal Reserve Board announced that it had rejected crypto-friendly Custodia Bank’s application for a master account, dealing a blow to its founder, Caitlin Long, an ally of Wyoming Republican Senator Cynthia Lummis.

Yesterday, Cameron and Tyler Winklevoss were hit with one lawsuit in New York by a plaintiff who wants to file a class-action lawsuit to halt customer withdrawals at their crypto-lending firm Gemini, which has been caught in the middle of the FTX fallout.

So to find out where crypto is headed, it might be time to keep an eye on figures who don’t fit as neatly into the mogul mold, having spent more time up in the clouds than down in the trading floor.

In a space as decentralized, global and fast-paced as crypto, it’s hard to know who will shake things up next, but here are three people worth watching.

— Blockstream CEO Adam Back: Before starting to provide support services for the Bitcoin network, the British cryptographer earned a doctorate in computer science, invented a precursor to Bitcoin, and corresponded with Bitcoin’s pseudonymous inventor, Satoshi Nakomoto.

While many crypto moguls subscribe to the libertarian ethos that permeates the technology, Back was a key member of the pro-crypto ‘cypherpunk’ movement that flourished in the 1990s and was part of the intellectual inspiration for Bitcoin.

Last week, Blockstream announced that it had raised a new round of funding of $125 million (although Bloomberg reported last month that the company had raised the money at a reduced valuation. Blockstream’s president, Erik Svenson, declined to disclose the valuation of the latest round to DFD , saying the company is “not immune to macroeconomic factors” but that it is “very pleased” with its latest fundraising terms.)

—Ethereum co-founder Vitalik Buterin: The Russian-Canadian co-founder of Ethereum is well-known within the crypto world, but much less visible outside of it.

Partly it is because Buterin has published articles about number theory and ask questions like “What is even an institution?” on his personal website while entrepreneurs have been busy making names for themselves building financial businesses on top of Ethereum.

It has also kept him above the game.

The last time Buterin was in the news, it was because his brainchild – of which he remains the symbolic head and over whom he continues to exercise soft power – completed a complicated upgrade, “The Merge”, in September.

—Algorand founder Silvio Micali: The Italian computer scientist is less well-known than many other crypto-founders, although his theoretical bona fides are among the strongest.

In the 80s, Micali was among the inventors of zero-knowledge proofs, a cryptographic technique now widely used to build even more secrecy into next-generation blockchain systems.

While Micali is just one of many crypto-founders who tout their systems — in this case, Algorand — as technically superior to the most popular blockchains, he is the only one to have won both the Turing Award (often called the “Nobel Prize of Computing.” ”) and the first Gödel Prize, a computer science award inspired by Austrian logician Kurt Gödel’s correspondence with mathematician John Von Neumann.

At the dawn of the digital age, thinkers such as Alan Turing and Von Neumann ventured from the realm of theory into applications to create the earliest computers – with consequences for the functioning of society and the global balance of power that continue to play out in unpredictable ways today.

Crypto has not proven its importance on any scale remotely comparable to computing itself.

But the technology’s proponents have ambitions that are just as far-reaching and potentially unpredictable. If it fulfills them, it will likely be due to the efforts of figures who are less like the Silicon Valley entrepreneurs so familiar to us today and more like an earlier generation of technology pioneers who ventured out of the world of theory and into the world . of the application.

Some quiet important news from last week that you may have missed: A member of the House of Representatives reads an AI-generated speech into the congressional record.

Rep. Jake Auchincloss (D-Mass.), to hype up a bill which wanted to create a joint US-Israel AI research center, decided to let ChatGPT hold the microphone (so to speak). According to Boston’s WBZ NewsRadioAuchincloss gave the call “You are Jake Auchincloss, Member of Congress. Write 100 words to deliver on the floor of the House of Representatives. Subject: the importance of the US-Israel Artificial Intelligence Center Act, which the Congressman will reintroduce this term,” which led to the speech in the video linked here.

It’s pretty dry and formal, yes. But seasoned POLITICO reader that you are, you have to admit that gives it an extra chilling truth, right? — Derek Robertson

Just before the weekend, US and Dutch officials struck a deal to further curb China’s advanced microchip industry.

Like POLITICO’s Pieter Haeck, Brendan Bordelon and Mark Scott wrotethe deal will halt the sale to China of equipment from the Dutch company ASML, “one of the few companies in the world capable of producing the printers needed to produce the high-end semiconductors that are at the center of the growing technology war between the US and China .”

The deal was the result of a long campaign to ask the Netherlands to engage in more aggressive efforts to keep such technology out of Chinese hands. (For more on the extent to which this trade war is truly a break from modern history’s political status quo, I recommend this conversation from Friday between the New York Times’ Ezra Klein and Cornell political scientist Jessica Chen Weiss.) — Derek Robertson