Episode 20: Crypto Elections - Manufactured stats, invented voting blocs, and betting on elections
The latest episode features my interview with Molly White about crypto PACs and polls, and why they're not on the level. Remember: the house always wins. Unless it goes to jail.
This episode came together because of a few things starting to collide in my head. And the only person who could help me understand them at the level they needed to be understood was crypto researcher, Molly White, publisher of Citation Needed, creator of the project Web3 Is Going Just Great, and the new crypto PAC tracker Follow the Crypto. You should subscribe to her newsletter and follow her on all the platforms because there is nobody more clear-eyed about crypto than she.
You can listen to the episode here:
Are Crypto Voters Real?
Several months ago, I came across this post on the Coinbase blog: “A Call To Action: Mobilizing 52 Million Crypto Owners Into An Army of One Million Advocates For Change”. This number — and the ambitious goal of turning 2% of any group into “advocates for change” struck me as a bit unlikely.
There are about 260 million adults in the United States. That would mean 20% of US adults are crypto owners. So I checked Pew Research, who has been asking about crypto holdings for several years now.
Their 2023 report showed this:
The Coinbase number is a bit high, but you can sort of understand how they got there. It’s right there in the question: “Have you ever invested in, traded or used a cryptocurrency such as bitcoin or ether?” (emphasis mine).
It’s important to know that the number of people holding crypto fluctuates. People buy, and they sell. People who have ever had bitcoin may not have it now. They would not be inside the “52 million” that Coinbase asserts. So I tried to figure out how they got there, and here’s how they did that: they looked at a tracking question the polling firm Morning Consult publishes.
Now, that first Coinbase post I saw was published in September 2023. The most recent number they’d have had, then was the July number, which is confusingly not labeled as such on Morning Consult’s chart, but is 18%. The lowest number across ten quarterly trackers is 16%, the highest is 22%. Even if you’re just kind of averaging it out, you’re still rounding up to get to 20%.
But anyway, what is the true state of things?
Well, about 30% of those who said they ever had crypto in the Pew poll say they no longer did. That’s more like 31 million American adults who currently hold some amount of crypto (or about 11%).
This isn’t the only weird part of the stats reported by Coinbase and Stand With Crypto (their campaign to get candidates for office to be pro-crypto). What really did it for me was how hard they worked to bury the source data. Usually if you’ve done some polling that shows a sizeable constituency with strong opinions about things, you publish the report itself.
The closest I got was this report, “The State of Crypto: Age, Access and Agency” from October 2023. A few notes on methodology here:
- None of the charts in this report indicate a base size of respondents
- None of the charts indicate a margin of error
- The methodology section indicates combining data sets, which is mostly fine, but let’s look at those data sets…
- A survey of 1000 Americans to understand generational differences, conducted with Bovitz, Inc. It doesn’t say how many of each subgroup, so it’s hard to know the base size of Gen Z v. Boomers.
- A survey of college students (undergrads and graduate students) with a sample size of 2065, conducted with Morning Consult.
- A survey of 5090 American adults, of whom 800 are crypto investors.
- A survey of 2,202 American adults, again with Morning Consult, about perceptions of cryptocurrency.
- And then they looked at data included in a report by Morning Consult called, “A Brand’s Guide to Generation Alpha.” That report is a topic for a different podcast, but this is a pretty great take-down of it, by a member of the aforementioned generation.
And then — this is not in the methodology section — they allude to “Coinbase’s own active users,” who are segmented by generation and…
Yeah, I don’t know where any individual stat is coming from or how to parse the information here.
Crypto Candidates
A few fun facts about the presidential candidates and their crypto-ness.
- According to a report filed in August with the US Office of Government Ethics, Trump holds between $1-5 million in ethereum cryptocurrency. Arkham Intelligence says the number is closer to $3.6 million in various cryptocurrencies. Some of them are MAGA themed.
- Trump made $7.15 million from a NFT licensing deal in 2022. Those NFTs are non-transferrable until the end of the year. But Trump has said he’s going to release more Trump Digital Trading Cards.
- JD Vance says he holds between $250-500,000 in bitcoin.
- Bernie Moreno, the Republican candidate who appears to have received the most money from crypto PACs, is running for Senator Sherrod Brown’s seat in Ohio. It’s reported that the industry has spent $38 million to help get him elected.
- In more completely implausible reporting, Moreno’s campaign staff quote a survey by the Ohio Blockchain Council, which found that 2 million Ohioans hold crypto. 2 million out of the 30-50 million in just one state. Impressive! Except I can’t find published data about that, only that the founder of the OBC said so, in an interview with a local NPR affiliate.
- In July, the RNC platform included this language: “Republicans will end Democrats’ unlawful and un-American crypto crackdown and oppose the creation of a Central Bank Digital Currency. We will defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their digital assets and transact free from government surveillance and control.” h/t Adam Tooze. In fact, read the piece here:ChartbookChartbook 302 Kamala v. crypto. Is 2024 really a Silicon Valley election? Or is this about "making Bitcoin great again"? Given the importance of tech to the US economy and to our common sense of the future, given the role of the “magnificent seven” in the stock market, given the fact that Kamala Harris hails from California and is well connected in the tech scene and that J.D. Vance runs with tech investors, it is not surprising that the US election in 2024 is being dubbe…Read more2 months ago · 90 likes · 48 comments · Adam Tooze
I don’t know if this is a crypto election or not, but crypto really wants it to be.
Crypto-prediction markets
Okay, here’s the last thread: between August 4 and August 10, searches for “prediction market” and “polymarket” surged. Prediction markets figured prominently in predictions about who Harris would pick as her running mate, and showed Harris taking the lead over Trump — before we had any reputable polling to that effect. Nature, and the news business, abhors a vacuum. Prediction markets began to fill it.
Here’s a little history of how prediction markets got to be big in election predictions, and I can tell it in basically two words: Nate Silver.
- In 2012, he wrote a piece just before the election called “The Virtues and Vices of Election Prediction Markets”
- The following week, Silver made a prediction for the 2016 election (three years away): “Even Without Intrade, Billions Will Be Bet on 2016 Race”
Ahead of the 2020 election, Silver went on ABC to talk about what political betting markets could tell us about Elizabeth Warren’s chances:
Well, it’s 2024, and now Nate Silver has separated from 538, started his own substack, bought some equity in Polymarket and joined the platform officially as an advisor.
Up until about three weeks ago, it was illegal for people in the US to bet on elections. So prior to a federal judge telling the CFTC that betting should be allowed, most of the people on Polymarket placing bets on the election were non-US citizens who have crypto wallets, know how to buy a US Digital Coin, and then use that coin to, more or less, place bets.
Prediction markets aren’t supposed to be polls. They’re supposed to be representative of people who are following polls, or who have on the ground knowledge of one state or another; but mostly they’re representative of people who like to have their opinions validated with money, who like to be right and see their bragging rights in their bank account.
Time was, such a thing could be a scandal: Sean McElwee, the founder of Data for Progress, more or less got drummed out of his own organization for betting on elections.
Nate Silver, who now runs Silver Bulletin, and charges subscribers for his election forecasts, clearly has no similar obstacles. Not only is he free to bet on elections, he’s free to get a taste from the prediction market that allows thousands of degens to bet on markets, too. It’s the perk of not being able to fire yourself.
Molly White Knows What’s Up
Bringing all these threads together, I knew who to talk to. Molly White has been covering the influence of crypto PACs, the dodginess of crypto polling, and the rise of crypto candidates on her site, Citation Needed.
We talked about:
- Misleading polls and inflated crypto adoption numbers
- The myth of the "crypto voter" and political influence
- Prediction markets: A new frontier in election forecasting?
- Journalistic responsibility in reporting crypto data
And that’s where I want to conclude:
Journalists play a critical role in how any trade group’s polling is disseminated to the public. There's a concerning trend of reporters uncritically repeating industry-provided statistics without proper context or scrutiny. Crypto polling is no different. From uncritically accepting that 2 million Ohioans own crypto, to in some instances repeating a stat that 40% of American adults own crypto, reporters have to do what Molly does: check the numbers, call the pollster, check to see the charts add up to 100.
Journalists should question the source and methodology behind any crypto-related numbers, and seek out and include contradictory data from reputable sources. They should clearly attribute claims to their sources (e.g., "Coinbase claims..." rather than stating as fact), and communicate the limitations of industry-funded polls. Pick up a phone and call researchers and polling firms for clarification on methodologies and potential biases. This is the only way we’ll be able to tell what is true, and what is crypto-true.
Listen to our conversation about her reporting here:
Resources
- A project by Molly White that documents issues and controversies in the cryptocurrency and Web3 space.
- An election spending project by Molly White that tracks cryptocurrency industry spending in political campaigns.
- Molly White's personal website that serves as a hub for all her social media profiles and projects related to cryptocurrency analysis.
- Molly White's newsletter that discusses cryptocurrency topics and provides critical analysis of industry claims and polls.
- A Coinbase initiative described as a grassroots effort to mobilize cryptocurrency supporters for political activism, but criticized as primarily serving industry interests.
Our Guest
Molly White is a researcher, writer, software engineer, and prominent critic of the cryptocurrency industry. She writes the Citation Needed newsletter, which covers the cryptocurrency industry and the tech industry more broadly. She also founded and maintains the popular website Web3 is Going Just Great, which highlights examples of how cryptocurrency and web3 projects are failing to live up to their promises.
Molly has written essays outlining issues with crypto-utopianism and techno-solutionism, and her expertise has been featured in publications including The Wall Street Journal, The New York Times, Financial Times, and NPR. She is "the cryptocurrency world’s biggest critic" according to The Washington Post, and The Guardian described her as "the sharpest critic of crypto on the web". She was named in Forbes' 30 Under 30 list and in FastCompany's Most Creative People.
White is also a strong advocate for free knowledge, online communities, and a better web, and has spent over a decade as a passionate contributor to Wikipedia. She is an affiliate of the Berkman Klein Center for Internet & Society.