On Dec. 6, the price of bitcoin surpassed $13,000, gaining more than $1,000 in value from a record high only the previous day. In April 2013, back when the price of bitcoin fluctuated between $76 and $266, Slate writer Eric Posner called the digital currency “a libertarian fantasy.” The Libertarian Party was already accepting bitcoin contributions then — the first political party to do so — through a system that immediately converted them to dollars, as required by policy. The LP welcomes bitcoin donations to this day.
“Individuals engaged in voluntary exchange should be free to use as money any mutually agreeable commodity or item,” said Libertarian National Committee Executive Director Wes Benedict. “We don’t favor one currency or form of payment over another. Many constituents asked us to offer the bitcoin option, so we made it available. We don’t give investment advice, don’t predict future valuations of currencies, and don’t advocate for or against a particular currency, such as bitcoin. We favor a free market in currencies.”
In May 2014, five years after the inception of bitcoin, the Federal Election Commission finally got around to passing its first tentative bitcoin political contributions. The FEC unanimously ruled that bitcoin contributions up to the cash contribution limit of $100 were acceptable, but left unanswered the question of whether larger contributions were allowed.
Although the Libertarian Party’s bitcoin donations must be attached to an identifiable person, one of bitcoin’s attractive features for many people is anonymity.
“Bitcoin seems to allow people to hide transactions from government, not only from the U.S. government but from foreign governments as well,” Benedict said. “If that’s so and if it’s legal, that’s great. If it’s illegal, I have no comment.”
Since first integrating bitcoin donations into LP.org in April 2013, the Libertarian Party has accepted Bitcoin contributions as in-kind donations up to the legal limits for donations to the party, which currently stand at $10,000 per day and $33,900 per year.
“Aristotle said that a currency needs four attributes, durability, portability, divisibility and intrinsic value,” Benedict said. “Gold has all those attributes. Fiat currencies such as the dollar, the euro, and the yen do not. They lack intrinsic value because central banks can increase their supply (while decreasing their value) at will. The supply of bitcoin expands at a predictable and decreasing rate, and will ultimately be capped, so the market is giving it a value higher than the dollar.”
The value of bitcoin in relation to the dollar has increased by a factor of more than 104 since the day of Posner’s “libertarian fantasy” dismissal. It has increased by a factor of more than 29 since the day FEC decided bitcoin was allowed for political contributions.
“Maybe we’re seeing Posner’s libertarian fantasy come true,” Benedict said. “We welcome bitcoin contributions (and dollars, too) to continue to turn those fantasies into realities by fielding more than 2,000 common-sense candidates in 2018 to win elections against increasingly partisan Republicans and Democrats.”
