August 13, 2022

Dictators Who Laud Bitcoin Deserve Your Scorn, Not Your Praise

Bitcoin was created as part of the grand dream of sound money and individual liberty, not as a tool to empower tyrants.

On June 19, Colombians elected the former socialist guerrilla, Gustavo Petro, as president of the nation. The Marxist, a deep believer in state intervention in the economy and redistribution of wealth, in 2017 tweeted, “Bitcoin takes issuing power away from states and currency seigniorage away from banks. It is a community currency that relies on the trust of those who transact with it, as it is based on the blockchain, trust is measured and grows, hence it derives its strength.”

This was enough for the prestigious cryptocurrency publication Bitcoin Magazine to publish a post announcing that the newly elected president of Colombia supported bitcoin.

Vladimir Putin’s dictatorship, which has one of the most regulated economies, has also made inroads in its attempts to adopt bitcoin in its monetary system. However, it has done so to try to evade Western sanctions for Putin’s invasion of Ukraine, and to have reserves of an immeasurable asset that allow them to continue financing their oppressive regime. The move has been indirectly celebrated with enthusiasm by the bitcoin community, since Russian legislation allows for its adoption by a greater number of people, regardless of the causes.

Venezuela’s dictator Nicolás Maduro has also tried to use cryptocurrencies to finance his plans. Nevertheless, he attempted uselessly to create a cryptocurrency called “Petro,” which would be controlled by the Venezuelan regime itself and would be anchored to the price of oil.

In El Salvador, President Nayib Bukele made bitcoin a legal tender. This step, in my opinion, is important and necessary. However, the legislation overreached by forcing citizens to accept the cryptocurrency as a form of payment, and the state created a digital wallet that has received more criticism than praise from users.

Precisely, the idea of bitcoin is to constitute a currency that can be freely exchanged by the parties, without any type of coercion by the government; the fact that the State legislates the obligatory nature of its use breaks with the ideological and operational principles of the digital currency itself.

Applauding Dictators for Bitcoin Praise Is Wrong

The cryptocurrency industry is a growing world: it started from the dream of Satoshi Nakamoto. However, it has branched out into countless cryptoasset projects, with different aims, purposes, and of course, legitimacy.

While it is extremely difficult to determine which crypto projects are a scam and which are not, there is one that is definitely not a scam: it’s called bitcoin.

Bitcoin was created from the dream of a freedom lover who realized that currencies —the economy— in the hands of the State, were greatly harming societies, generating poverty, corruption, and illicit enrichment by elites who abused their power to manipulate the economy. This is why bitcoin is so important: because it can’t be manipulated at the convenience of a central agency. Its value grows or decreases according to market fluctuations, and it isn’t subject to censorship; no government can close your digital wallet or expropriate your bitcoins (if they are properly stored).

However, some Latin American and Eastern world dictators —enemies of open economies and individual freedoms— have found in the cryptocurrency an ally to circumvent international sanctions and finance their crimes. Yet, this is not something that should be celebrated by the bitcoin community.

If we have learned anything from history, it is that money—of any kind—will be used for both the most beneficial and the most terrifying causes. Money, like weapons, medicines, or any other element, is just a tool, which can be used by the human species for better or for worse.

The bitcoin dream is still young and is in a maturation phase. In the next few years, most likely the market will work its magic, and fraudulent alternative projects will disappear gradually. Bitcoin will outlive them, and those others with robust fundamentals that really provide humanity with a series of uses and benefits are also likely to flourish.

The cryptocurrency support community must continue to grow, even in these times of bear markets, for it is in these times that the useless projects disappear and the ones that provide the most value survive.

Bitcoin will surely make it through this liquidity crisis once again, as it has done so many times in the past. Nonetheless, the bitcoin community should stop idolizing dictators and enemies of the free market, just because they dedicate a couple of nice words to the project.

Praising the enemy won’t do bitcoin any favors; on the contrary, it will alienate more and more people who will think that the cryptocurrency is only used for illegitimate causes.

This article, Dictators Who Laud Bitcoin Deserve Your Scorn, Not Your Praise, was originally published by the Foundation for Economic Education and appears here with permission.  Please support their mission.