How Bitcoin Is Freeing People in China, Venezuela, Iran, and…America

Cryptocurrency is a human rights issue, explains Alex Gladstein of the Human Rights Foundation.

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How Bitcoin Is Freeing People in China, Venezuela, Iran, and…America

Since launching a decade ago, the decentralized, peer-to-peer cryptocurrency bitcoin has been lauded (and denounced) for its potential to route around traditional state-based monetary systems and allow individuals to trade directly with one another.

Much of the discussion has understandably focused on how it is transforming economic exchange. But Alex Gladstein, the chief strategy officer of the Human Rights Foundation, a nonprofit that promotes and protects civil liberties in closed societies, is interested in how it empowers people in autocratic countries to escape government control. Only about 8 percent of global transactions use cash and the switch to digital payments means that authorities can track what individuals are up to with greater ease than they used to. 

Bitcoin, its underlying blockchain technology, and the emerging Lightning payment network are allowing people to escape surveillance, says Gladstein, who has co-authored a brand new book on the subject, The Little Bitcoin Book: Why Bitcoin Matters for Your Freedom, Finances, and Future.

In today's Reason Podcast, he tells Nick Gillespie how bitcoin is changing the way people live and transact in places such as China, India, Iran, and Venezuela. He also explains how in an increasingly cashless America, cryptocurrency is helping us to escape what's been called "surveillance capitalism," why Human Rights Foundation's annual Oslo Freedom Forum is more important than the World Economic Forum in Davos, and how bitcoin and associated technologies will "really bankrupt the ability of authoritarian regimes to do what they do and basically force their hand to reform."

Audio production by Ian Keyser.

Comments

[Chipper Morning Wood]

Bitcoin is not anonymous.

[Metazoan]

No, it's not. It's pseudonymous. But there are anonymous cryptocurrencies, too.

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[Diane Reynolds (Paul.)]

It can be made to be, and I say that as a harsher Bitcoin critic. But I agree, it's important to point out that a Bitcoin transaction CAN be traced to a specific person, forever and ever, amen.

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[JFree]

Bitcoin - now consuming as much electricity overall as Austria - and as much as 20 days worth of an American households electricity consumption (or alternatively the same as 725,000 Visa transactions or 48,000 hours watching YouTube) for every single transaction.

No overhead there.

[Metazoan]

or alternatively the same as 725,000 Visa transactions or 48,000 hours watching YouTube

I don't think this is accurate. You have to consider the fixed electricity usage of all of Visa's infrastructure, including their office buildings (not just the datacenter), as well as the usage of employees that Bitcoin doesn't need. It's not fair to compare nearly _all_ of what Bitcoin uses to a fraction of what other solutions use.

[Diane Reynolds (Paul.)]

I don't know what the numbers show, but there's evidence that a single bitcoin transaction uses far more electricity than a single Visa transaction due to the distributed nature of its validation. I think this is probably an imminently solvable problem, but may not be for Bitcoin specifically- but possibly another competing crypto-currency.

Obligatory: If competing cryptocurrencies emerge- and they can-- infinitely, what value is bitcoin?

[Metazoan]

I don’t know what the numbers show, but there’s evidence that a single bitcoin transaction uses far more electricity than a single Visa transaction

Right, but my point is that the counting isn't fair. If the cost of a "single Visa transaction" is just datacenter usage, then yes, BTC is far more energy-intensive. But it's not--what about the loads of people working in compliance, or just maintaining day-to-day operations with banks? These roles are not necessary in Bitcoin, but they certainly use a lot of energy. It would only be fair to count them, too.

I think this is probably an imminently solvable problem, but may not be for Bitcoin specifically- but possibly another competing crypto-currency.

Yeah, there are consensus mechanisms in other cryptocurrencies that use far less electricity, so it is a promising direction.

Obligatory: If competing cryptocurrencies emerge- and they can– infinitely, what value is bitcoin?

The same as any other object--it's valuable because people want it (i.e., are willing to give up something in exchange for it). In an answer that is a bit less of a cop-out, I would say it gets its value the same way private currencies did during free banking. There were tons of private currencies in the mid-19th century in the US, but I don't think that particularly harmed the others. Indeed, there are already over 2000 (last I checked) cryptocurrencies--and you can start your own today, if you want. But that doesn't seem to be particularly harming Bitcoin.

I say this as a general friend to cryptocurrencies, and someone who likes Bitcoin but doesn't think it's a god. I just like competition in money, like all else.

[Minadin]

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[John A]

Is it worth to take a bet in bitcoin? Could it be seen as a safe haven investment if it becomes turmoil in the stockmarket? Bitcoin could be a good investment in the long run.

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[0f2b3c8]

Ugh! The the purpose of the title of this podcast (vis a vis freeing people), the distributed nature of leager is THE MOST INTERESTING feature of Bitcoin. The others features are technically important and necessary, but not more interesting than the "anti-conterfiet" features of the 100 USD.

For example, if Bitcoin were to be everything EXCEPT controlled by Visa or MC, it would be no better than fiat currency.