# Vitalik on risks of political coins

Source: https://xcancel.com/VitalikButerin/status/1882527216782774511
Kiwi News: https://news.kiwistand.com/stories/Vitalik-on-risks-of-political-coins?index=0x679363804266123f2a7de1f819cdace671ab884ccb30e241d817b752054c6e64879e3c8a
Submitted by macbudkowski.eth on 2025-01-24 UTC, 3 upvotes, 0 comments

## Summary

Vitalik Buterin argues that politician-issued coins are a risky vehicle for bribery and threaten democracy. Buyers can increase a politician's holdings simply by buying and holding the coin, without sending the politician any money directly. Holding a coin also gives deniability, since its financial effect mixes donating to the issuer with gambling, so a buyer can claim the speculative motive. Buterin says the economic case for markets in ordinary goods does not extend to markets for political influence, and he recommends that politicians not pursue this path.

## Article

The risk of politician coins comes from the fact that they are such a perfect bribery vehicle. If a politician issues a coin, you do not even need to send *them* any coins to give them money. Instead, you just buy and hold the coin, and this increases the value of their holdings passively.

Furthermore, there is deniability: holding the coin is, in terms of financial effect, a linear combination of donating to the issuer and gambling. Hence you can have the intention of doing the former but when challenged claim that you are doing the latter.

You can even hold the coin privately, and show that you are holding it to whoever you need to show; you do not need any zero knowledge proofs, you just send a test transaction.

This is all risky to democracy, for reasons very similar to what I wrote in https://vitalik.eth.limo/general/2021/08/16/voting3.html , https://vitalik.eth.limo/general/2020/09/11/coordination.html and elsewhere. TLDR: the economic arguments for why markets are so great for "regular" goods and services do not extend to "markets for political influence".

I recommend politicians do not go down this path.