Blockchain industry might be the real winner in the US midterm elections.
Every four years in November, about halfway into each presidential term, voters in the US head to the polls to fill 36 state governor seats, all 435 seats in the U.S. House of Representatives, and about one-third of the 100 US Senate offices. Widely considered a referendum on a sitting president, midterm elections often produce power shifts in Congress, especially if the head of the executive and his party are not particularly impressive early in the term.
This time, Democrats were full of hopes to summon a ‘Blue Wave’ and break the unified Republican control of the government. While the Democratic party has succeeded in flipping the House and increasing the number of governorships they control, some commentators were still not impressed by the wave’s momentum. However, there has been another remarkable tide: a group of pro-blockchain politicians who have recorded spectacular wins that will project them to high offices.
Many crypto-savvy people, when asked to quickly name one blockchain-friendly US politician off the top of their head, will certainly recall Jared Polis’s name. Polis, who was among the trailblazers of crypto campaign finance and has later co-founded and co-chaired the Congressional Blockchain Caucus will assume the office of the Governor of Colorado in January 2019 after he defeated State Treasurer Walker Stapleton on the midterm election night. There is little doubt that Polis will actively pursue a pro-blockchain agenda, as one of his campaign’s big promises is to ‘establish Colorado as a national hub for blockchain innovation in business and government.’
His five-prong plan envisions implementation of distributed ledger technology (DLT) in improving election infrastructure and security; exempting cryptocurrencies from money transmission laws and establishing the legal status of utility tokens; exploring blockchain-based solutions for optimizing energy distribution and consumption; digitizing government records and moving them to public ledgers; creating a blockchain council to work in coordination with the state’s Office of Economic Development & International Trade. Polis is open about taking the crypto-friendly state of Wyoming as a mold for many of his policies.
On May 20, 2014, Gavin Newsom, then-lieutenant governor of California and former mayor of San Francisco, while campaigning for reelection, tweeted at then US Representative Jared Polis about following his lead and welcoming BTC contributions. This marked Newsom’s accession into the ranks of early ‘bitcoiners’ in the top tier of US politics.
That midterm season, both Newsom and Polis have won their respective races to keep the offices they occupied. Four years on, they are both victorious again, this time becoming governors of their states for the first time. Newsom overran his Republican opponent John Cox by a comfortable 57-43 margin.
While not as outspoken a blockchain advocate as Polis, the new Californian governor-elect is considered crypto-friendly not just for his embrace of Bitcoin campaign contributions, but also due to his overall pro-technology orientation. Particularly, Newsom has spoken in favor of the federal government’s digitization initiatives. According to the datasheet compiled by the advocacy group Digital Asset Trade Association, Gavin Newsom is generally in favor of policies that would attract blockchain startups to the state, supportive of recognizing the legal status of crypto transactions, and positively views the idea of creating a state-level blockchain committee or task force. Given California’s stature as an economic and technological powerhouse, even relatively modest evidence of the new governor’s potential pro-blockchain orientation is great news for the industry.
Wyoming has been banking big on blockchain lately, seeking to boost the influx of technology startups into the Cowboy State. Following a sweeping tide of pro-crypto legislation enacted by the state house this year, the Wyoming Blockchain Task Force has already unveiled proposals for the 2019 legislative session, which appear to be taking the trend even further. State Treasurer Mark Gordon, who last Tuesday night was elected to serve as the 33rd Governor of Wyoming, seems to be fully embracing Wyoming’s emerging leadership in the field. In DATA’s scorecard, all of the eleven boxes that represent various dimensions of crypto-friendliness are checked against his name.
Two more governors who are usually considered pro-blockchain secured their offices for the next term. Texas governor Greg Abbott, who first opened his coffers to crypto contributions in the 2014 campaign, has won his second term, topping the Democratic contender Lupe Valdez. In the Rhode Island election, according to the Digital Asset Trade Association’s scores, the blockchain community was set to win regardless of the outcome, since both major candidates ranked high in blockchain friendliness. Incumbent Gina Raimondo, a Democrat, sustained competition from Allan Fung to secure another two years in the office.
The Congressional Blockchain Caucus is a bi-partisan group of Members of Congress who appreciate the vast potential of blockchain technology and work to promote hands-off legislation that would enable the industry’s dynamic growth. The Caucus also aspires to be a platform for both public and private sector to come together and discuss both implications of the technology and policies around it. The group was founded in 2016 by Jared Polis and Mick Mulvaney, who has since left the House to lead the White House Office of Management and Budget.
Granted, Jared Polis will be missed dearly by the Congressional Blockchain Caucus. Yet his departure from Congress will hardly disembowel the group. In the buildup to the midterms, the Caucus has seen two prominent members, Tom Emmer and Bill Foster, elevated to co-chair positions alongside Polis and his longtime confederate David Schweikert. Emmer has been particularly resourceful in the past months, announcing a series of bills designed to facilitate development and adoption of blockchain technology and digital currencies. The Blockchain Caucus leadership looks both willing and prepared to keep pushing the crypto agenda on the national level.
Electorally, the Caucus has done exceptionally well in the midterms: both of the co-chairs and 10 out of 12 regular members who stood for reelection retained their seats. Here is the roundup:
David Schweikert, the Congressional Blockchain Caucus co-chair, serves as the Republican representative from Arizona's 6th Congressional District since 2011. In this election he defeated his Democratic opponent Anita Malik by a 12.8 percent margin.
Tom Emmer, a Republican, has been representing Minnesota's 6th District since 2015. Last Tuesday, he beat the Democrat Ian Todd by 22.4 percent of the popular vote.
Bill Foster has been the Democratic representative from Illinois' 11th Congressional District since 2013. He defeated Republican Nick Stella by 27.2 percent of the vote.
Stephen Lynch has been the Democratic representative from Massachusetts' 8th District for 17 years, since 2001. A South Boston native, he emerged victorious in the Democratic primary in September and was unchallenged in the general election.
Michael McCaul is the Republican from Texas' 10th Congressional District. A former Texas Deputy Attorney General, he has represented the district for 13 years. In the present election, he managed to fend off the Democratic contender, Mike Siegel, by 4 percent of the vote.
Denny Heck, a Democrat from Washington’s 10th district has served in his position for the last 5 years. He defeated the Republican Joseph Brumbles by a confident 22.6 percent margin.
Tony Cardenas has been the Democratic representative from California's 29th Congressional District since 2013. In the November 6 general election, he defeated the Republican Benito Bernal by a staggering 58.4 percent of the vote.
Jerry McNerney, a Democrat from California's 9th District, has been in Congress since 2007. On the night of November 6, he narrowly defeated the Republican Maria Livengood.
Mark Meadows, a Republican member of the US House since 2013, represents North Carolina's 11th Congressional District. On the night of the midterm general election, he secured 20 percent more of the popular vote than his Democratic opponent Philip Price.
Darren Soto has served as the Democratic representative from Florida's 9th Congressional District since 2017. He won the November 6 general election against the Republican Wayne Liebnitzky by a 15.6 percent margin.
Jeff Duncan is the Republican representative from South Carolina's 3rd Congressional District, who has served in the US House since 2011. He defeated the Democrat Mary Green by 35.6 of the vote in the general election.
Tom MacArtur, the Republican representative from New Jersey’s 3rd District, ran against Democrat Andy Kim in a dramatically tight contest. Several days after the election, the results were still pending, with the race too-close-to-call. As of November 11, Kim appears to be leading by 1.1 percentage points, though no official announcement of the outcome were made.
John Larson A Democrat from Connecticut's 1st Congressional District has been in the office for 19 years. In the general midterm election, he defeated the Republican challenger Jennifer Nye by 28.4 percentage points.
Greg Gianforte, representing Montana’s At-large district since 2017, was triumphant against the Democrat Kathleen Williams by 5.1 percent of the vote.
Two of the current Congressional Blockchain Caucus members announced prior to the midterms that they would not seek reelection for the next term. Democrat John Delaney from Maryland’s 6th Congressional District revealed his plans to run for president in 2020, while Bob Goodlatte, the Republican veteran of the House who has been representing Virginia’s 6th District since 1993, cited his willingness to spend more time with his granddaughters.
The only Caucus member who had definitely lost in the present election was Keith Rothfus, the Republican representative from Pennsylvania’s 17th District. Having served in the House since 2013, he was defeated by the Democratic challenger, Conor Lamb, by 12.4 percent of the vote.
Given that all the 435 seats in the House were up for reelection, the Congressional Blockchain Caucus’ showing indeed looks impressive. While the Caucus retains its core membership in the incoming Congress, there seems to be room for expansion as well. The midterms saw many new faces joining the legislature for the first time, and chances are that at least some of them share the vision of the blockchain-powered future that inspires this diverse group of lawmakers to work together.
Election predictions go decentralized
Yet another remarkable outcome of the midterm elections is not directly related to the ballots cast and offices filled. Although the Commodity Futures Trading Commission (CFTC) rules explicitly prohibit wagering on election results, there are several platforms that allow U.S. bettors to do so without breaking the law. PredictIt, a centralized prediction market that relies on its academic affiliations to secure an exemption from the CFTC regulation, has been dominating the space in recent years. However, this election cycle PredictIt suddenly faced strong competition from the decentralized side in Augur, a blockchain-powered prediction marketplace. While the CFTC is still pondering on the possible regulatory approaches to decentralized prediction protocols, Augur’s users take full advantage of its infrastructure.
Reports suggest that the overall amount of money staked on this midterms’ outcomes exceeded $2 million, compared to PredictIt’s $550,000. To be fair, the rules of the centralized prediction platform strictly limit wagers at the $850 cap per user per market, while Augur’s bettors are only restricted by the amount of ETH they are ready to risk. Therefore, there can be no implications regarding the two platforms’ relative popularity as of now. Also, there is some evidence that just two people were responsible for a huge share of the overall trading volume. All these reservations notwithstanding, Augur proved its capacity to successfully handle trading volumes comparable to those of its centralized counterparts, while the overall number of bets showed increasing usage of the platform.