Balaji Srinivasan: 17 Thoughts on the First Crypto President
If Trump airdrops TRUMP to American voters, it could generate political support and alter the traditional political interest structure, even providing him with the opportunity to dismantle his opponents' political machinery.Author: @balajis
Compiled by: Scof, ChainCatcher
Overnight, the vast majority of the next U.S. president's wealth ($59 billion) is now held in cryptocurrency. This remains true even if the value of cryptocurrencies drops by 90%.
What does this mean?
First, in President Trump's assets, cryptocurrency has jumped from possibly accounting for only 1% to over 90%. Many early holders of Bitcoin, Ethereum, and Solana have also experienced similar wealth leaps.
Second, this phenomenon—relative devaluation of all non-crypto assets—will become a reality shared by billions of people worldwide in our lifetime, as fiat currencies decline.
Third, every politician, influencer, and celebrity around the globe is watching this phenomenon, closely observing its political and financial consequences. If this "meme coin" can exist long-term—though that's a big question—they may follow suit.
Next, if thousands of individual meme coins emerge in the market, the situation may not be entirely unacceptable, as every buyer knows what they are purchasing: the potential future brand value of the meme.
The key is whether the value of Trump's assets can be sustained. If other celebrity meme coins quickly go to zero, Trump is different; he has (a) over 100 million followers, (b) constant media attention, (c) presidential immunity, and (d) unprecedented government control.
Therefore, regardless of the form of political backlash faced, Trump now has a strong incentive to legitimize cryptocurrency in the most radical way.
Of course, this may be criticized as a conflict of interest. But the Biden family took a "10% cut," Pelosi trades stocks, Hillary profits from speeches, Podesta manages a $300 billion climate fund, and Obama signed a Netflix deal. All these individuals became millionaires through various means, gaining various defensible benefits.
So, Trump's rebuttal might be: he is just doing everything in public. His point may be that transparency resolves the conflict of interest issue.
This may hold, but it does not fully address the alignment issue. For context: a company's CEO is usually one of the largest shareholders, but their interests are aligned with all employees because they hold the same stock. Ideally, all shareholders rise and fall together.
By analogy, ideally, the president should align with the interests of citizens, for example, they all hold some form of "American coin" and receive a certain dividend from America's profits. This is somewhat like the Alaska Permanent Fund.
One way to address the alignment issue might be for Trump to airdrop some "Trump coins" to every American citizen. However, perhaps a simpler approach would be for him to email every Trump supporter personally, offering free Trump coins.
Specifically: he could notify everyone 72 hours in advance, and even many Democrats might join his email list just to receive the airdrop.
Is this legal? Well, it is legal for politicians to send fundraising requests to voters, but as far as I know, no politician has attempted a personal airdrop—i.e., giving away money—especially on such a large scale.
At current valuations, Trump could airdrop $100 of locked Trump coins to 77 million Trump voters, which would cost him $7.7 billion, considering this asset was nearly worthless two days ago. Even if he airdropped $500 to each person, he would still have over $20 billion left.
Yes, doing this would consume part of Trump's assets. But if joining his email list is required to receive the coins, and the airdrop can occur without capital gains tax, this would "break even" by converting Trump's supporters into more steadfast supporters.
It could even win him enough political support to dismantle the Democratic machine. Essentially, by joining Trump's email list and supporting his crypto policies, you could receive benefits akin to a basic income.
If 77 million Americans could also benefit from Trump coins, the conflict of interest accusations would vanish. This would represent a new social contract, a personal relationship between the president and citizens.
Food for thought.
