When Bitcoin is mentioned in the headlines of news outlets or in community forums, most of these discussions are centered around the cryptocurrency’s price.
And this shouldn’t come as a surprise. BTC has great growth potential compared to general market assets like bonds, stocks, or even commodities like gold. At the same time, it features excellent store of value qualities due to its scarcity and deflationary halving mechanism.
For these reasons, many individuals, businesses, pension funds, family offices, and institutional investors are increasingly turning to Bitcoin to grow their wealth, hedge against general market risks, and retain their purchasing power while avoiding the inflationary nature of fiat currencies.
However, Bitcoin offers an even greater benefit to society that is easy to forget while continuously looking at the price charts.
Unlike the traditional financial system, Bitcoin’s decentralized blockchain network completely lacks intermediaries, governmental oversight, censorship, and centralized authorities. Instead, its ecosystem is maintained by its users, offering the ability for anyone with a working internet connection to hold digital assets with real ownership over the funds as well as send and receive peer-to-peer (P2P) cryptocurrency transfers.
These features allow Bitcoin to offer financial sovereignty for individuals, which society can leverage to enhance human rights.
And, in this article, we will discuss why BTC is a powerful tool to reclaim freedom as well as how the cryptocurrency can be utilized to protect human rights and improve the life quality of the world’s population.
Resisting Oppression With Bitcoin
According to the Human Rights Foundation, 54% of the world’s population lives under authoritarianism and the reign of non-democratic regimes, which the non-profit organization describes as one of the most pressing global challenges right now.
In these nations, governments often use the existing financial system to monitor their citizens in an attempt to control how they live their lives. They achieve this by forcing banks, payment services, and money transfer solutions to report on their customers’ activities.
They leverage this totalitarian state control to punish those who resist or share different views. Some of these authoritarian actions are done in an “elegant” way.
For example, suppose an entrepreneur criticizes a government or openly supports the opposition party. In that case, the regime silently instructs tax authorities to investigate his business to uncover an offence, crime, misdeed, or simply an excuse that could justify the decision to close or take over the company.
In other cases, typing one wrong word on social media can be enough for the government to revoke a citizen’s access to all financial services. Furthermore, human rights activists, protesters, and opposition party politicians often face bank account closures, making it nearly impossible to raise funds or accept donations for their campaigns and causes via the traditional financial system.
And, for these nations’ citizens, it is expected to get more difficult to reclaim their financial freedoms through traditional services as governments all over the world are racing to launch their central bank digital currencies (CBDCs).
While CBDCs feature all the efficiency-related benefits of cryptocurrencies – such as the lack of intermediaries as well as fast and cheap global transfers through continuously operating payment networks –, many of these solutions utilize a highly centralized architecture.
For that reason, authoritarian regimes can take advantage of central bank-issued digital assets to achieve even greater control over the personal finances of their citizens.
Alternatively, those who don’t have access to traditional financial services could use cash to settle their everyday payments. However, due to the rise of digital technology, cash usage has declined globally, which was further accelerated by the pandemic.
And this is where Bitcoin comes into the picture. The BTC network is operated by tens of thousands of miners and full nodes instead of a central server and features one of the most resilient and secure computer systems in the world with a nearly 99.99% uptime. For these reasons, it’s nearly impossible for governments (or attackers) to take it over or shut it down.
As you can see, Bitcoin is the perfect tool for the oppressed to circumvent authoritarian governments’ control over the traditional financial system.
This way, human rights activists, opposition parties, and protesters can offer a way for their donors to contribute to their cause without asking for permission from the government or fearing that the regime will freeze their bank accounts.
In fact, some jurisdictions attempted to ban Bitcoin outright, but they couldn’t succeed. In such a case, while many centralized and regulated trading platforms had to halt their services, citizens turned to peer-to-peer marketplaces like Localbitcoins, OTC desks, and decentralized exchanges to convert fiat to cryptocurrency (and vice versa).
That said, it’s important to note that BTC transfers are neither private nor fully anonymous. Since native Bitcoin transactions are recorded on the blockchain, they can be tracked and traced back to their owners via sophisticated data analytics solutions. However, there are services like coin mixers that can be utilized to mask BTC transfers.
Furthermore, the Lightning Network, a layer-two scalability solution on top of the Bitcoin blockchain, offers increased privacy for users along with fast, cheap, and efficient micropayments. As the Lightning Network is still under development, it is expected to feature an even higher level of anonymity for users in the future, which can come in handy to limit governmental oversight.
On top of this, privacy-focused coins like Monero (XMR), Zcash (ZEC), and Dash (DASH), and encrypted protocols like Tor can be great alternatives for citizens. At the same time, businesses can store their solutions’ data with IPFS to resist censorship.
Bitcoin’s Potential to Save Money and Combat Inflation
You don’t necessarily have to do something “wrong” for an authoritarian government to limit your rights to save, spend, receive, and send money.
In Venezuela, citizens have been struggling with the massive hyperinflation of the bolívar, which was subject to an inflation rate of nearly 54 million percent between 2016 and 2019.
To cope with this hyperinflation and avoid losing almost all their purchasing power, Venezuelans have started converting their bolívars to major fiat currencies like the USD but had to face strict government restrictions concerning foreign exchange until May 2019.
However, the government has been continuously undermining citizens’ efforts to save money by enacting various rules to, for example, take an approximately 56% cut from remittances and cross-border transfers while forcing banks to disclose information about such activities of their customers.
And Venezuela is not the only example. There were multiple similar cases elsewhere, such as in Myanmar, where the military junta’s coup led to the collapse of the nation’s banking system – today, we see similar dynamics in Afghanistan.
In other nations (especially those sanctioned by large economies like the US and the EU), citizens have limited access to savings products, stock trading apps, foreign currencies, or even the private ownership of gold bars.
Fortunately, cryptocurrencies and blockchain technology offer viable alternatives in these areas as well.
As mentioned earlier, P2P marketplaces offer easy access to Bitcoin even when digital asset trading is banned in a jurisdiction. And, during its little more than 12 years of history, BTC has proved itself an excellent store of value and attractive investment with high growth potential.
After 2018’s bear market, Bitcoin returned as the best-performing asset of 2019 and continued to generate great gains for investors in 2020 and 2021 as well.
For comparison, while the S&P 500, NASDAQ 100, and SPDR gold shares (GLD) recorded 40%, 78%, and 16% gains, respectively, between January 1, 2020 and September 1, 2021, BTC achieved a 580% ROI throughout the same period.
Based on the law of supply and demand, if the demand for an asset stays the same or increases in the long run while the rate at which new supply is created decreases, it will benefit from a long-term price appreciation.
And this is exactly the case with Bitcoin.
While BTC has a limited supply of 21 million coins – which is hardcoded at the protocol level and can’t be modified by even Satoshi Nakamoto himself –, its halving mechanism that occurs roughly every four years reduces Bitcoin’s inflation rate by 50% by cutting the new coins that can be mined with each new block in half.
As a result, the flow of new Bitcoin supply compared to the existing stock of coins – which the widely popular stock-to-flow model measures – gradually decreases until the cryptocurrency reaches its maximum supply (in the year 2140).
For these reasons, Bitcoin gives exposure to an excellent alternative investment for those who have limited access to general market assets to save money. At the same time, since it’s a deflationary currency, it can combat inflation in nations where the national currencies lose a significant portion of their purchasing power over time.
And, apart from holding BTC, the crypto market offers a wide range of alternative revenue sources for individuals – from altcoin investments, staking, and mining to lending and yield farming via decentralized finance (DeFi) protocols.
Bitcoin: the Human Rights Tool We Have Been Long Searching for
Bitcoin offers citizens “a get out of the jail free card.” With BTC, individuals can reclaim their freedom and enhance their quality of life by leveraging the cryptocurrency’s decentralized, resilient, and permissionless blockchain network to bypass centralized control.
Furthermore, they can utilize crypto to save money as well as protect their wealth from the national currency’s hyperinflation and other negative consequences of a failing economy.
For these reasons, Bitcoin is the human rights tool we have been long searching for. And people everywhere are just realizing how to leverage its power.