The need to protect Individual Freedom
Societies that have neglected the importance of the individual have failed. The Soviet Union, the largest communistic empire the world has seen, collapsed in 1991 (Plokhy, 2014). A political system of forced intellectual equality and state-controlled economy failed, leaving behind countries in economic distress and citizens without prospects.
Ludwig von Mises, an Austrian economist, philosopher and classical libertarian, argued that a person who is unfit to serve his fellow citizens wants to rule those citizens (Mises, 1944). He believed that society must be carried on everyone’s shoulders through shared responsibilities. People don’t need to be told what to do, they need to be raised to be independent, educated individuals who make conscious choices for themselves. Tight state control and radically enforced community awareness are doomed to fail. Therefore, everyone must engage oneself intellectually. No one can refrain from doing so, as the interest of everyone depends on the result. Whether we like to or not, we all are part of the great historical struggle to create a society worth living in (Hülsmann, 2007).
A failure to exploit our individual freedom leads to heteronomy and thus to the loss of economic and political sovereignty. Freedom is impartible. A citizen who has no choice in consumption or means of trade is deprived of self-determination. He is no longer a human; he becomes a puppet in the hands of the supposed supreme social engineer (Hülsmann, 2007).
There is a need to provide a platform for new kinds of trade and fair access to wealth. Until 1979, UK government regulations required citizens to obtain a permit to take more than £25 abroad. China, the world’s second largest economy, bans its citizens from withdrawing more than $50,000 a year from the country. Economic or political crises often lead to capital controls (Frisby, 2014). During the European debt crisis of 2011, Greece introduced transaction monitoring as a result of the state bankruptcy. In 2013, Cyprus experienced a banking crisis that led to the imposition of capital controls. Cash withdrawals were capped at €300 per day, large cash withdrawals had to be verified and check cashing was banned. Accounts over €100,000 were confiscated (Frisby, 2014). In the past, governments have failed to put in place effective financial control mechanisms, and then called for citizens to pay for the profligacies of banks and government institutions. There is a need to establish a separation of two of society’s most powerful sectors – the state and money.
Globalization promised prosperity and has led to an inevitable intertwining of international interactions and financial transactions, but the existing financial system favours an unfair distribution of wealth. It is inaccessible to most (Frisby, 2014). Citizens from underdeveloped countries seek job opportunities in developed countries to support their families at home. However, sending or receiving money is expensive and inefficient; the global average of monetary losses in the opaque sphere of financial bureaucracy is 8.3% (Antonopoulos, 2015). There is a need for a monetary alternative that can serve as a counterbalance to the obscure and incompetent financial system in place today.
For these reasons, Bitcoin came into existence. Unlike traditional monetary systems, Bitcoin gives control to the individual and is independent of any central authority. Bitcoin decentralizes power and bypasses unfair government regulations. This has been evident recently in areas affected by war and insecurity. After the Russian invasion of Ukraine on February 24, 20202, many Ukrainians turned to Bitcoin to protect their wealth, bring their money with them, accept transfers and donations, and conduct daily necessities. Almost a quarter of Ukraine’s population (Filippo Grandi, UN High Commissioner for Refugees;2022) was displaced from their homes in the first four weeks after the invasion, and the war has strained the country’s financial system. As the invasion progressed, ATMs across the country ran out of cash, and some people queued for hours only to be faced with a $33 withdrawal limit. The most important properties of Bitcoin: It is decentralized, does not require a bank and is bound to its owner by a password, have created a perfect use case (MacKenzie Sigalos;CNBC, 2022). Bitcoin adoption in Afghanistan has surged since the Taliban “takeover” in 2021 as it allows individuals affected by capital controls and persecution to conduct business and secure wealth. Blockchain surveillance firm Chainalysis ranks Afghanistan 20th out of the 154 countries in its 2021 Global Crypto Adoption Index, which is ranked in terms of overall cryptocurrency adoption. However, if you isolate Afghanistan for its Person-2-Person exchange trade volume, Afghanistan jumps up to seventh place. In 2020, Afghanistan was not even listed.
Bitcoin, which is limited in supply, is experiencing increased demand as market participants look for a good store of value to protect their money against inflation and government confiscation. This was illustrated by the surge in Ruble/Bitcoin trading volume as the Russians attempted to circumvent sanctions imposed by the international community over Russia’s invasion of Ukraine.
The historical problem that the existing monetary system was subject to the shortage of commodities and the domination of central banks and state institutions persists to this day. Excessive money printing, quantitative easing (QE) and central bank so-called “stimulus” during the coronavirus “pandemic” have pushed inflation higher. Bitcoin changes this with its fixed supply and its decentralized functional model, creating the basis for a fair distribution of wealth and a free society that respects individual freedom.
In 2021, seven years after I set out my vision of how Bitcoin could bring billions of people locked out of the existing financial system into an open currency network, the first nation-state, El Salvador, made bitcoin legal tender. Does Bitcoin need government approval? No. Rather, it undermines its unstoppable trajectory. Bitcoin offers individuals in states with little or no access to traditional banking systems, such as Afghanistan, the opportunity to store wealth and participate in the economy.
Over the past century, humanity has seen technological, social, and economic advances, but money hasn’t changed much. Why? We are rightly beginning to question the broken foundations of our financial system. Globalization has led to an inevitable interlocking of trade, politics and financial transactions. About 5.5 billion of the world’s 7.9 billion people have access to the World Wide Web, but only 2 billion people have access to the existing financial system.
Bitcoin came about for a specific reason: to break the chains of a broken financial system that has excluded the many and favored the few. Cryptography, game theory, and digital scarcity have enabled the foundation for a new decentralized system, the Bitcoin network.
Continue reading: Cypherpunks and the origin of Bitcoin