DENISA KELE // Does bitcoin “free” us from totalitarian regimes?
Bitcoin is promoted as a force for individual freedom, bitcoin usage in emerging markets is increasing rapidly, albeit from a small base. And while it’s true that Bitcoin can be a better alternative for unbanked peoples who don’t have the means, access, or even the basic proof of identity to open a bank account, it turns out its biggest benefit today for many people is that Bitcoin is censorship-resistant. In other words, government cannot throttle, control or monitor your behavior as they can in the legacy financial world. It’s the first time that humans have ever had the ability to send money around the world globally without anyone being able to stop it. You can argue that it’s the first time in our history that we have real censorship resistance.”
In 2020, protests against the government erupted in Lagos and across Nigeria because of the brutal and illegal actions of a unit in the police force called the Special Anti-Robbery Squad (SARS). Within days, groups supporting the protesters had their bank accounts frozen. With no other option, they turned to Bitcoin, raising funds that sustained the movement.
At the most fundamental level, the mere existence of cryptocurrencies creates opportunities for people to make choices that were unheard of just over a decade ago. But more specifically, cryptocurrencies offer the potential for choices to be made in a realm long dominated by government monopolies––the realm of money.
It’s not unusual for people to seek alternative currencies in times of hyperinflation or unstable regimes. In fact, the U.S. dollar is a popular choice in desperate times, but getting the physical dollars to other countries can have its challenges. Normally the U.S. government is happy to ship those dollars across land or sea, but that service can stop at a moment’s notice when global politics get in the way.
Where cryptocurrencies have the potential to become a widely accepted money, they also have the potential to provide a choice that is free from both poorly managed governments and global politics. That alone is a major step forward for liberty across the world.
Cryptocurrencies offer more than just an alternative to escape national currencies, poorly managed or otherwise. They can also offer a layer of protection for one’s financial privacy that is missing from most national currencies.
For some people, cryptocurrencies may be exactly what is needed to better protect their privacy. Despite the fact that cryptocurrencies are not completely anonymous, users are still offered a heightened level of financial privacy because decentralized cryptocurrencies (e.g., Bitcoin) remove the banks from the equation. Therefore, there is no third party to pressure for information if the bitcoins in question are held in a self‐hosted wallet.
If a government wishes to access the information in such a wallet, it must go through the traditional legal system to secure a warrant.
The lack of any one controlling party is a key component of the system’s ability to resist censorship. If the government stopped a miner from updating the ledger, there are countless other miners across the world that would continue to ensure the ledger is kept up to date.
Cryptocurrencies offer a new range of choices and opportunities that never before existed. They offer protections for financial privacy that should be already offered by the Fourth Amendment. They offer censorship resistance that protects individuals from authoritarian and overbearing governments, alike. They enhance the ability of individuals to enter reliable contracts. They improve the movement of wealth across the world. And overall, cryptocurrencies offer the opportunity for individuals to gain financial independence from the government.
No two cryptocurrencies are created equal. However, in principle, cryptocurrencies offer the potential to enhance liberty across the world. And for that, they are something worth fighting for.