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To investors,

People around the world are watching in awe as the world’s richest man, Elon Musk, engages in a hostile takeover attempt of Twitter. While the mainstream media is distracted by the business details and day-to-day drama, there is something much bigger, and much more important, playing out in the shadows.

We are watching the 21st century war over free speech.

Historically the battle for free speech has boiled down to individuals vs the government. We saw John Peter Zenger tried in court for criticizing the Royal Governor of New York in 1735. Then we had The Federalist Papers where Alexander Hamilton argued “the liberty of the press shall be inviolably preserved.” This was followed up with the Sedition Act of 1918, which forbid any individual or organization from criticizing the US government. Finally, we got the Scopes Monkey Trial in 1925 where Tennessee school teacher John Thomas Scopes was “found guilty of violating a Tennessee law which prohibits teaching the theory of evolution in public schools.”

In each of these instances, the US government was trying to stifle the free speech of their citizens. A key long-term trend in American society was the constant self-correction to preserve the citizens’ right to free speech, regardless of how many short-term missteps the country took along the way.

But each of these important milestones had the same structure — US citizen vs US government. The nuances were different, including debates around evolution, religion, war, and much more, but the battle had always been between state and citizen.

Publisher vs Platform

The dynamics of the free speech debate changed in the 21st century. The first evolution was related to the difference between a platform and a publisher. It used to be clear that a media company was a publisher, which had to adhere to certain rules, and the phone company was a platform that facilitated communication, which ensured they adhered to a different set of rules.

No one expected The New York Times to allow everyone and anyone to publish within their widely distributed newspaper, but the default expectation was that the phone company would allow anyone and everyone to make a phone call, regardless of the quality or accuracy of ideas and conversation. This distinct line between publisher and platform allowed for clear rules, but the lines got blurred with the advent of social media firms.

Is Twitter a publisher or a platform? Well, the answer is “both.” Regardless of how you believe they should fit into the current discourse, Twitter has been providing a platform for user-generated content with an overlay of publisher-like decisions around content moderation and amplification.

For example, what is the difference between The New York Times selecting what to put on the front page of the newspaper and Twitter deciding what gets put at the top of your newsfeed? The answers aren’t as cut and dry as they used to be.

Platform vs User

This leads us to the second evolution of the free speech debate. Not only is the line between publisher and platform blurred, but the battle is no longer between US government and US citizen. The modern battle is between social media platform and social media user. The social platforms have replaced the US government as the most powerful force in the free speech arena.

Don’t believe me?

If social media platforms can deplatform the sitting President of the United States, who has the ultimate power?

Naval @naval

If you can silence a king, you are the king.

Twitter Safety @TwitterSafety

After close review of recent Tweets from the @realDonaldTrump account and the context around them we have permanently suspended the account due to the risk of further incitement of violence. https://t.co/CBpE1I6j8Y

January 9th 2021

4,716 Retweets25,822 Likes

If you can silence a king, you are the king.

Once the platforms realized they had the power to censor alternative viewpoints, while simultaneously hiding behind the fact that they are a private business and reserve the right to make their own rules, it became apparent that the frequency of these decisions was only going to accelerate.

The problem with this situation is that there is no clear response from users to push back. When the government was the censoring organization, citizens could take the fight to a court of law. When social networks dominate the censorship game, users are left powerless and voiceless. There is no day in court. There is no need for the platforms to prove their case. Censorship as a means of stifling dissent is now merely based on the whims of people we don’t know, based on standards we don’t understand, conducted with a lack of transparency only rivaled by authoritarian dictators across the world.

Centralization vs Decentralization

This brings us to our third transition in the free speech debate. The elites historically aspired to own the publications, but now it is clear that owning the platforms will be the superior position in the 21st century. Every existing platform at scale has been controlled and operated by the founders, which is a key reason why we haven’t dealt with transition periods before.

Elon Musk is the world’s richest man and he is taking a run at controlling the world’s most powerful media entity. Think that sounds like hyperbole? More than 75% of people on Twitter that follow me (sample bias issue!) believe that Twitter is more powerful than The New York Times.

The problem is that Musk is using 20th century tools, such as money and popularity, in his attempt to gain control. These tools will ultimately be insufficient in the 21st century because those in positions of power and influence are well versed in how to negate them. You see this with the overwhelming character assassination of Musk in the media and the invoking of the “poison pill” by the Twitter board of directors.

If the elites can employ sophisticated capital market tools, along with chisel away at Elon Musk’s reputation, they believe they will be successful in thwarting his attempt to enter the free speech war. Unfortunately, they are probably right.

But just because that is what the elites aspire to accomplish, it doesn’t mean that we can’t think through what Elon Musk should ultimately do — he should leverage the 21st century tools to ensure that free speech is forever preserved.

We know that Musk has publicly stated that the acquisition of Twitter is not driven by a desire for economic gain. So it would be a legendary move to take Twitter private, fire majority of the team, open-source the technology, and use the remaining revenue to fund open-source development of a free speech platform with hundreds of millions of users.

You can think of Satoshi Nakamoto, the creator of bitcoin, as the initial 21st century technologist that understood how to employ 21st century tools to solve 21st century problems. We also know that Jack Dorsey, a co-founder and former CEO of Twitter, had a similar idea when he helped launch Blue Sky, an exploratory project on decentralized social media protocols. The idea of open-sourcing, and simultaneously decentralizing Twitter, is not new, but Elon Musk is the first person to have an actual shot at doing it.

Yes, he has to successfully acquire the company. Yes, the deck of cards is stacked against him. Yes, the elites are doing whatever they can to stop him. Yes, Elon has a million other things going on. Yes, Elon would essentially be flushing $43 billion down the toilet. Yes, this sounds insane. Yes, it sounds nearly impossible.

But Elon also created reusable rockets that land themselves on drone ships in the ocean. Literally anything is possible when Elon is involved.

As the lines between platforms and publishers is blurred, and platforms continue to wage war against their users without accountability, there will be a big opportunity for someone to create the first open-source, decentralized social media platform. I don’t believe it will come with native tokens and crypto-specific bells and whistles. The fastest, most efficient path is to get one of the existing systems to change ownership and then pull the trigger on the transition. Twitter is ripe for this to happen because of the current focus on free speech or the lack thereof on the platform.

Elon Musk is just crazy and wealthy enough to pull it off. We should all be cheering for him because the fate of free speech, and the sanity of our society, is potentially hanging in the balance.

Hope you all have a great day. Talk tomorrow.

-Pomp

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THE RUNDOWN:

Biden Nominates Former Ripple Adviser Barr as Top US Fed Regulator: President Joe Biden named former crypto industry adviser Michael Barr as his latest pick for a Federal Reserve post that's arguably the most powerful financial regulator job in the U.S. Michael Barr, who is now the public policy school dean at the University of Michigan Law School, was a senior official in former President Barack Obama's Treasury and occupied a key role in the government's rescue of the financial system from the ruins of the 2008 financial crisis. But the most important aspect of his background for the digital-assets industry could potentially be his tenure on the board of advisers at Ripple, giving him an insider's knowledge of crypto. Read more.

Twitter Closes Down on Session as Musk Calls for Shareholder Vote: Twitter lost ground today, closing at $45.08 versus Elon Musk's cash offer of $54.20, as speculation grew about whether the board would approve of a sale to the Tesla CEO. Saudi Arabian Prince and major Twitter shareholder Alwaheed bin Talad voiced his opposition to Musk’s offer in a tweet, to which Musk responded in-kind by asking exactly how much Twitter the Saudis own and questioning the Kingdom's views on freedom of speech. Read more.

Central Bank of Portugal Grants Country’s First Crypto License to a Bank: Bison Bank, a Portugal-based financial institution, has received a license from the Portuguese central bank (Banco de Portugal) to operate as a virtual asset service provider (VASP), Banco de Portugal announced Thursday. Bison Bank will create a special business division, Bison Digital Assets, to operate as a virtual asset exchange, according to Portuguese media outlet Sapo. Read more.

Owner of Brazil’s Largest Crypto Exchange Plans to Launch Quantitative Trading Service: 2TM, the holding company for Mercado Bitcoin, Brazil's largest crypto exchange by market valuation, plans to launch a crypto asset manager focused on quantitative trading, the company confirmed to Brazilian financial media outlet InfoMoney on Thursday. Read more.

Alexander Leishman is the Co-Founder & CEO of River, a Bitcoin-only company that allows you to buy Bitcoin as well as mine Bitcoin

In this conversation, we discuss building a Bitcoin-first company, updates on the regulatory space, Bitcoin maximalism, and why this is the year that Bitcoin is establishing itself as a major pillar in our political system.

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