In a bid to circumvent fiat currency, political oppression and even a “scam” cryptocurrency launched by the government, an increasing number of Venezuelans under an authoritarian regime have turned to Bitcoin as it promotes freedom around the world.
December 31, 2018 | AtoZ Markets - The Chief Strategy Officer at the Human Rights Foundation, Alex Gladstein has published one of the most interesting articles entitled ”Why Bitcoin Matters for Freedom” in Time Magazine.
In it, the author argues that Bitcoin could be a useful way of protecting the wealth of an estimated four billion people worldwide, from oppressive governments and hyperinflation.
“Speculation, fraud, and greed in the cryptocurrency and blockchain industry have overshadowed the real, liberating potential of Satoshi Nakamoto’s invention. For people living under authoritarian governments, Bitcoin,” the article says “can be a valuable financial tool as a censorship-resistant medium of exchange.”
Bitcoin in Authoritarian Countries
The article published on December 28, cites few countries like Venezuela, Russia, Zimbabwe and China and also explains how the flagship crptocurrency, Bitcoin, and other digital currencies have changed their economic landscapes. For Venezuelans, the article highlights the current situation that the citizens are currently living in their country.
Venezuela, whose collapsing economy is overseen by an increasingly authoritarian government, is experiencing high inflation rates and has been one of the countries with worst performing economies in the world for the past few years.
Individuals in this impoverished Latin American country are not able to live with a basic salary and they are also unable to transform the ongoing situation that they are experiencing. Furthermore, the authoritarian government controls the political landscape as it does not allow other parties to operate freely.
However, a look at the information from Localbitcoins reveals that citizens of Venezuela are extremely buying up Bitcoins. As the chart below shows, the number of purchases of BTC this week jumped by 11 percent to reach an all-time high of 1,974 BTC.
In a recent discussion with a Bitcoin economist, Martin Weyer, a Business Editor at The Spectator has been quoted as saying:
“Venezuelans love Bitcoin well, of course, they may do because it’s chaos in their country.”
Bitcoin Can Be a Way Out
Beyond these countries, the article explains how Bitcoin can also help citizens of Russia and China. The Russian government is making it difficult for people to remove their money from the country as the authoritarian regime is subject to international sanctions. But with Bitcoin, NGOs that have their bank accounts frozen in the country can still operate.
Cryptocurrency, as stated by the author, can also help those who want to avoid mass surveillance in China as well as refugees who are without access to basic banking services.
In addition, the article stated that while fiat currency is used without government permission, it can be rendered virtually useless by hyperinflation as many countries are moving to become cashless societies – hence strengthening the need for cryptocurrency.
While Bitcoin is known for its volatility, and not particularly user-friendly, however, with improved infrastructure, mobile wallets, improved exchanges, SMS payments, and sensitization, it can -- and already is -- making a huge impact on the lives of 4 billion people living in authoritarian countries. Gladstein concluded:
“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. If we invest the time and resources to develop user-friendly wallets, and better educational materials for Bitcoin, it has the potential to make a real difference for the 4 billion people who can’t trust their rulers or who can’t access the banking system. For them, Bitcoin can be a way out.”
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