The Humanitarian Side of Bitcoin
As many have rightly pointed out, Bitcoin and cryptocurrencies more generally represent a shift in how society and individuals view and value currency and the philosophy behind transactions, whilst the Blockchain technology that supports them has the potential to revolutionize trade and create a truly mutual marketplace through the removal of the need for a ‘middle man’ in the form of a bank. Indeed, on social media you will find many who are hailing the rise of Blockchain and the various cryptocurrencies that litter the corners of the internet as something that could radically decentralise banking and eliminate the need for banking institutions altogether.
There’s one thing people tend to forget. Bitcoin’s decentralised nature lends itself to agorism through its ability to undermine the oppressive and bureaucratic state apparatus, freeing people to pursue enterprise in the face of mounting red-tape, or help their families survive in the face of violent statist incursions. Venezuela, a country that seems like it has been in perpetual crisis mode since 2013, serves as the perfect example of this. The country has seen inflation skyrocket to around 18,000% with basic foodstuffs like bread and oil, as well as sanitary products and medical supplies all dwindling to the point that people can queue for hours on end and yet receive nothing but empty platitudes from state officials who promise the ‘revolution’ will continue under the guise of Chavez’s anointed successor, Nicolas Maduro.
Despite Maduro and his statist colleagues blaming the US and vaguely-defined ‘imperialism’ for the socioeconomic crisis that Venezuela finds itself in, the real cause for the country’s turmoil is its lack of some form of an open, free-market economy. The state controls nearly all enterprises in Venezuela, and sees things like private control of business as antithetical to the ‘revolution’ and signs of capitalist imperialism. Don’t get me wrong, I’m as opposed to imperialism and pointless US forays into foreign lands, but Venezuela’s economic collapse is arguably one of the few instances in which the US has played little part in the collapse of a foreign social or economic order.
Where does Bitcoin fit into this mess? It manifests itself in the form of undermining the country’s currency controls and in what has to be noted as an inspired example of agorism. Some Venezuelans have taken to the Internet and began to mine Bitcoin in order to pay for goods imported from abroad. The state’s currency controls prevent individuals from doing this through state-sanctioned, so-called ‘official’ measures, but Bitcoin and its decentralised nature allow individuals to actively bypass such controls and import much-needed foodstuffs and other basic goods freely by trading the cryptocurrency for real-world Bolivars, with much of the goods coming largely from American port cities in Florida like Miami.
This hasn’t stopped the state from doing what it does best: intervening and oppressing. Maduro and the state police have cracked down on Bitcoin mining since the end of last year, arresting miners on trumped-up false charges such as trafficking contraband and undermining the so-called ‘revolution.’ In spite of these incursions however, cryptocurrency mining and the real-world humanitarian benefits it brings to those who can grapple with (the largely state-enforced) power outages continue, allowing them not only to be free from pointless currency controls but also free from an oppressive state that has since around 2012 sought to violate their civil and economic liberties.
Brazil is another example that often gets overlooked by both Bitcoin fanboys and detractors alike. The country has one of the most corrupt, overbearing and economically controlling governments in not only Latin America but it is ranked 153rd in the world for economic freedom in the latest study by the free-market Heritage Foundation and both its former and current presidents are facing charges of economic corruption and mismanagement. That may surprise you, given that in your school days, Brazil had often been touted by economists and development scholars as an ‘economy on the rise’ and part of the ‘BRICS’ group of countries that were going to economically explode over the next ten or so years! What you may find even more surprising is that according to the same Heritage study, countries like Ukraine (currently in the midst of a civil conflict), Belarus (noted for being Europe’s last dictatorship) and Haiti (you know, the country that was rocked by a devastating earthquake and corruption), are all economically freer than Brazil.
It seems then that the free-flowing nature of Brazilian soccer or salsa dancing hasn’t translated into economic policy. Import tariffs can be abnormally high, upwards of 60% depending on the product, thus harming both businesses and consumers who wish to trade and buy from abroad, whilst in comparison to most other developed countries, setting up a business and obtaining the right permits can take upwards of 83 days (in the US for example, Reason notes it can take only up to eight days).
Where cryptocurrencies and Blockchain come into this is rather interesting. The decentralised nature of cryptocurrencies like Bitcoin undermines the centralised, overbearing banking system currently present in Brazil. Instead of having to go through the time consuming process of having to provide birth certificates, titles and contracts to be verified, a company called OriginalMy allows traders, consumers and business owners to upload encrypted copies of important documents, secure in the Blockchain architecture , that are easily retrievable and allow for the authenticity of a document to be verified by comparing it to the copy of the original which is stored online.
In spite of these ingenious examples above, where there is enterprise and freedom there will inevitably be an encroaching state looking to regulate it. Don’t get me wrong, regulation is a necessary evil and if enforced properly can both protect consumers and enhance market freedom. The problem is, in places like Brazil and Venezuela, the state isn’t simply looking to regulate, it is looking to shut down cryptocurrency markets altogether. However, as has been pointed out both in this piece and elsewhere, how successful the state will be at ‘banning Bitcoin’ and cryptocurrencies more generally is another thing entirely; as Rodrigo Souza, the founder of SurBitcoin, a Venezuelan cryptocurrency trading platform, stated when Maduro’s regime began to crack down on Bitcoin miners, “people haven’t stopped mining, they’ve just gone deeper underground.”
Bitcoin, Blockchain and the whole host of other cryptocurrencies and related media have a real shot at not simply being the ‘next big thing’ as their acolytes incessantly seem to preach. They actually can help change lives for the better through circumventing oppressive state bureaucracies and structures in inspired acts of cryptocurrency-based agorism.