Another Tory shoots for crypto glory

You might remember that back in those carefree days of autumn 2018 — when we all still worked within spitting distance from other humans; when Boris Johnson was a backbench Tory MP and Dom Cummings just a glint in his eye — we initiated a series called “What’s the Tory crypto story?”.

Why? Well, a number of Tory parliamentarians — Grant “Michael Green” Shapps, Baroness “cryptocurrency expert” Mone, and Eddie “a blockchain for Bloxwich” Hughes, to name but a few — had got decidedly excited about the potential of the distributed technicolour dream-ledger and the wondrous strings of 1s and 0s that run on it (which some call “cryptocurrencies”).

With Mone’s “EQUI” project having flopped pretty spectacularly, Shapps deciding to quit the ICO he was “advising” as soon as we found out about it because he “just want(ed his) time back”, and with the market town of Bloxwich still apparently not actually running on a blockchain, it has been a bit quiet on that front lately. Yes, Cummings recently came out as a blockchain bro but these days he’s largely just a blogger, and it’s not like he was ever running the country or anything like that (don’t be so cynical).

Fear not though, all ye coiners, as there is a new kid on the Tory crypto block and he is here to help.

Introducing Tom Tugendhat, chair of the Foreign Affairs Committee, Conservative MP for Tonbridge and Malling, a former Territorial Army officer and co-founder of the China Research Group:

As Tugendhat told crypto podcast Bankless, this was — believe it or not — the first mention of “the flippening” in our great parliament (“the flippening” is crypto parlance for the hypothetical moment that the “market cap” of ether, the crypto token underpinning ethereum, overtakes that of bitcoin). A proud moment for Britain.

The video embedded in the tweet is just a partial clip of Tugendhat’s comments during the May 18 Queen’s Speech debate (which wasn’t actually about crypto or fintech or anything of the sort; this was shoehorned into a debate on housing). Tugendhat posted the full thing on Facebook, which you can watch here. If you’d rather not, here’s an excerpt (emphasis here, and elsewhere, ours):

This bill – this speech – does not cover the changing nature of currency, the changing nature of the economy, and the innovations that we’re seeing online through various forms of cryptocurrencies. I’m not going to go in, in the few moments left to me, of (sic) the flippening and why I’m going to be bullish on ether and not bitcoin, or the nature of the change in the Treasury that is needed to enable innovation that sees the sharing of prosperity on a global basis rather than a local one . . . 

This Treasury needs to create a safe space for cryptocurrency development. Because setting the standard for this new economy will shape a new electronic age; a new digital world. Just as our laws - the laws passed in this place and in that old parliament – created the trading economy that enabled so many to prosper under concepts of individual ownership, of corporate responsibility, and indeed private power – we now need to see those values injected into a new change. If we do not get this right, those standards will be set by authoritarian governments with no interest in innovation, or in wild places where there is no regulation and no accountability.

As we come to the end of this Queen’s Speech tomorrow I hope the government – and the Treasury in particular – will reflect very hard on the nature of crypto exchanges because they fundamentally will be underpinning, the understanding, of a new trading world.

Tugendhat also recently posted a monologue on SoundCloud following his speech in parliament, in which he goes into a bit more detail, concluding with this:

When the queen’s head leaves the coin and goes on to the blockchain it will be because that constancy that she has enabled through her reign has enabled innovation, entrepreneurialism – adventures, if you like, off it – and given people the confidence and stability to know that whatever change comes, it won’t disorientate and it won’t leave them lost. That’s the speech I wanted to give. I hope it makes sense. Thank you for listening.

Now when we heard this we felt a little bad about dashing his hopes, but we had to be honest: it made absolutely no sense to us at all. So we thought we’d better get Tugendhat on the blower and ask him to clarify.

Alphaville calls up Tugendhat

Our first question for Tugendhat was a fairly obvious one: in his entry in the Register of Members’ Financial Interests, there was no mention of any crypto HODLings. Yet in parliament he said he’s “bullish” on ether. So we asked, does he hold any of the thinking man’s crypto?

Oh, pennies. I don’t have any money, I’m an MP. 

Right. So how many pennies?

Oh about £500? Something like that – not more. Peanuts.

We put it to him that given he had bought some crypto, it struck as a little bit unethical that he seemed to be shilling it in parliament, particularly given that he hadn’t disclosed his holdings.

For £500? It’s peanuts. 

When we put it to him that £500 is not actually “peanuts” for many people and that, furthermore, in the Wild West of crypto, things can increase in value by several-thousand per cent at the drop of an Elon Musk tweet, he said:

It’s not like I put thousands of per cent in there. I put pennies in there and they bounce around. All I’m doing at the moment is using it to see how the thing works. I’m not investing in it. I don’t have a serious investment in it and I’m not going to have a serious investment in it, because I don’t — it’s not something I have. 

We guess because he didn’t put “thousands of per cent in there”, it’s fair enough that he didn’t disclose it. Ahem.

At this point, we began to feel that Tugendhat didn’t have the firmest grip on what he was talking about. And this feeling intensified when he started talking about “predict(ing) the future”:

People look at it like it’s currency – it’s not currency, it’s nothing to do with currency. It’s to do with the ability to understand and predict the future – effectively to write algorithms that answer future questions on the basis of considerations agreed today. That’s what Ethereum’s decentralised contracts are – effectively they’re ways of doing legal cases without courts . . . 

That’s what it’s all about, it’s not about whether bitcoin gets to $50,000. That’s why I’m bullish on ethereum not bitcoin. Bitcoin might well get to $100m, I haven’t got a clue – there you’re just speculating on gold, that’s all you’re doing. Whereas with ethereum you’re speculating on future contracts, based on a different kind of ledger – one that doesn’t require a complete redrawing of the ledger every time you draw on it.

Look, Tugendhat seemed to us like a decent enough guy. He was a good sport on the phone and admitted that some of what he had said was “because I’m a politician and I’m trying to get heard”.

But Ethereum’s “algorithms” cannot predict the future and talking about the “flippening” — which is not about whether the ethereum blockchain is going to enable some kind of new trading environment, but about people selling their bitcoin and buying ether — in parliament, particularly when you are a holder of ether and other cryptos yourself, seems . . . a bit off. And no, the Treasury certainly does not need to create a “safe space” (read: loosely regulated environment) for cryptocurrency development — it’s rather too “safe” already, if you ask us.

FT Alphaville feels quite strongly that if you are going to choose to talk about something like this in parliament, your understanding of the subject matter should be . . . better than Tugendhat’s words suggest his is.

What’s the story crypto Tory?

Welllllllllll

Need a little time to swot up, swot up?

Welllllllllll

Related links:
Dominic Cummings swaps Barnard Castle for the blockchain – FT Alphaville
Grant Shapps resigns from blockchain positions after FTAV discovers secret pay deal — FT Alphaville
Is Baroness Mone’s true idol Steve Wozniak or Sylvester Stallone? — FT Alphaville
The baroness, the ICO fiasco, and enter Steve Wozniak — FT Alphaville
Kaminska Live — FT Alphaville