Bitcoin and dictatorship: the case for freedom

Amidst a renewed emergence of tyrants and authoritarian governments globally, backed by emerging new technology such as AI and data gathering systems that can strengthen centralized power, a decentralized check on that power can provide a life-saving outlet for citizens.

In TIME, Alex Gladstein explores authoritarian regimes like the one found in Venezuela. The country has a humanitarian crisis on its hands as more than 1 million citizens have fled the country since 2014 due to inflation set to top 1 million percent. The government has cut off most money from abroad and charges fees higher than 50% to convert what does arrive. The authoritarian government leaves no opportunity to change monetary or economic policy for those who remain. 

To survive in these conditions, some Venezuelans have turned to Bitcoin. They are able to text their family, friends or others requesting bitcoin and receive it for a small fee, near instantly. Then, using services such as LocalBitcoins to exchange the digital currency for local currency received on a digital wallet. According to Gladstein, "For people living under authoritarian governments, Bitcoin can be a valuable financial tool as a censorship-resistant medium of exchange."

THE SCOOP

Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

Gladstein acknowledges that "Bitcoin is still a nascent technology, and doesn’t offer cutting-edge usability, speed, or privacy." In response to these shortcomings, he highlights the Lightning Network and many engineers working to scale Bitcoin and other cryptocurrencies. In Gladstein's words, "In the same way that the mobile phone began as absurdly expensive, barely functional, and only available to the elite, Bitcoin continues to evolve and will become easier to use and more accessible for the masses in the future."

The most powerful takeaway is Gladstein's final one: "Less than 1% of the world’s population — no more than 40 million people — have ever used Bitcoin. But, according to the Human Rights Foundation, more than 50% of the world’s population lives under an authoritarian regime...For them, Bitcoin can be a way out."