As Americans use and acquire cryptocurrency more than ever before, Independence Day celebrations increasingly reflect this trend. There is a brand of fountain fireworks called “Crypto,” and many retailers catering to customers’ July 4 plans now take payment in cryptocurrency.
And it is a topic of conversation at July 4 gatherings, as many reflect on the liberties fought for by the Founding Fathers. As the Benzinga Crypto news site notes, “While the day holds immense significance for all Americans, the cryptocurrency community takes special satisfaction in linking the day to the origins of Bitcoin, … rooted in financial independence from state-controlled enterprises.”
These Americans who make crypto a part of their July 4 holiday are actually – if unknowingly – paying tribute to the innovative spirit of the Founding Fathers, George Washington in particular. Both the characteristics of cryptocurrency and the events that have fueled its growth would not have been that foreign to the Declaration of Independence’s signers, who likely would understand cryptocurrency better than today’s chattering class blasting crypto as luring Americans into unnecessary risk or saying it has “no use case.”
As I write in my book George Washington, Entrepreneur: How Our Founding Father’s Private Business Pursuits Changed America and the World, our first president would have a particular understanding and likely a fondness for cryptocurrency. In the book I write that Washington, as “a fellow who kept detailed ledgers and used invisible ink,” would be “fascinated by the encrypted ledgers at the core of cryptocurrency and its associated blockchain technology, both of which promise new levels of privacy and efficiency in transactions.”
I show in my book that Washington, though lacking a college education, was a lifelong learner, an avid reader and knowledge seeker. He utilized this knowledge from reading and listening to build several innovative businesses from a whiskey distillery (rebuilt by the modern Mount Vernon in 2006) to the first mule breeding service in the U.S.
Washington was also a champion of early American inventors and the emerging technologies of his day, such as steam power and hot-air balloons. After hearing about the new balloons that could transport human beings through the air at limited distances, Washington made an amazing prediction. He wrote in a letter that “our friends at Paris, in a little time, will come flying thro’ the air, instead of ploughing the ocean to get to America.” That he could envision long distance air travel before the invention of railroads illustrates his foresight.
So, it’s not a stretch to suppose Washington would discern familiar properties in crypto and embrace the technology, or at least the freedom of Americans to use it. The three familiar properties he would likely recognize in cryptocurrency are encryption, ledgers, and privately-issued currency.
Encryption. The “crypt” in “cryptocurrency” refers to cryptography and encryption. Cryptography and encryption were around in Washington’s day, and he utilized them as general of the Continental Army.
As those who have read Brian Kilmeade’s and Don Yaeger’s pathbreaking book George Washington’s Secret Six or watched the AMC series Turn are aware, Washington and his Culper Ring spy network used invisible ink to correspond. Washington worked with physician James Jay (brother of future Supreme Court justice John Jay) to develop a state-of-the-art ink that could be made visible only with the use of another chemical. He would also use secret codes and ciphers—groups of numbers to represent certain words—to communicate secret information. The recipient of the message would then decode it with a “key” that matched these numbers to words, similar to the “private key” passwords held by cryptocurrency recipients.
Ledgers. In cryptocurrency, blockchain works as a distributed ledger, in which multiple users keep encrypted records of a transaction. While Washington and his contemporaries had yet to come up with a distributed ledger and wouldn’t have the computing power to deploy it even it they had, Washington did keep sophisticated ledgers of his business transactions nearly all his life. As I note in my book: “Since the age of 14, Washington kept and preserved his … business ledgers.” Today, many of those ledgers are available on the Mount Vernon website and shed light on many of his innovative business operations, including the whiskey distillery.
Privately issued alternative money. As I note in the book, “currency was always short in the colonies as Britain didn’t have national banks or mints to directly issue its currency outside the mother country.” The colonists had a variety of methods of exchange from barter to foreign currency such as Spanish dollars. Tobacco warehouse receipts—privately issued promissory notes that were good at a number of tobacco warehouses throughout the colonies and later the original American states—soon began to be traded to purchase other items as well. They became a go-to currency of Washington’s day.
As I point out in a paper for the Competitive Enterprise Institute, cryptocurrency merely “adds an electronic dimension to the privately issued currency and tokens that have existed through much of world history, as various items took on the role of money without government playing much, if any, role.” So, Washington would recognize the use of and need for privately-issued currency and likely see cryptocurrency as an innovative and beneficial extension of the private money that circulated in his day.
Finally, Washington and other of the Founders would likely see the benefits of decentralized cryptocurrency as a mechanism to protect liberty, given the arbitrary actions of freezing bank accounts taken by our neighbors to the North. In his farewell address issued near the end of his presidency in 1796, Washington warned of “the spirit of encroachment” that “tends to consolidate the powers of all the departments in one and thus to create, whatever the form of government, a real despotism.”
Given the warning he issued, it’s not a stretch to conclude Washington would agree with this statement on cryptocurrency from P.J. O’Rourke, a national treasure who passed away much too soon in 2022. O’Rourke, who revered Washington and the other founders, said at a Cato Institute forum in 2018, “I am much more worried about government abusing its police powers than I am about individuals abusing their purchasing powers. So that’s the case in favor of cryptocurrency.”
John Berlau is Senior Fellow & Director of Finance Policy at the Competitive Enterprise Institute and author of the book George Washington, Entrepreneur: How Our Founding Father’s Private Business Pursuits Changed America and the World.
Harrison Cerone, research associate at the Competitive Enterprise Institute, contributed to this article.
