Every time a government attempts to control their population, it showcases the unique value of Bitcoin. Bitcoin makes storing your wealth, without a third party (such as a bank), easier and more secure than ever before in human history. One only needs to look at pop culture to see how revolutionary this development is. In the Sopranos, the main character stores thousands of dollars of cash, in bags inside of his walls, because he feared that the government would seize his money. Bitcoin makes the “cash in bag” method seem incredibly antiquated, but besides Bitcoin, the method is really the only alternative to the financial systems which are completely controlled by world governments. Criminals see the immediate value of an unseizable financial instrument, because they are more likely to face government action, but everyday, governments worldwide seize wealth. It’s not always because the holder is a criminal.
Activists and everyday people throughout the world face government sanctions, asset forfeitures, and jail time merely for fighting oppressive governments. These people are not necessarily criminals just because their government branded them as such, and Bitcoin is a key tool in their operations, allowing them to move money and securely store their wealth without government interference. When a government fails to serve its people, and citizens can no longer rely on positive change to occur from within their government, an outside solution becomes the only real possibility for change. Bitcoin is a tech based solution to this civil liberties issue.
We will go through the three main financial techniques governments worldwide use:
1) Sanctions/Political Pressure
2) Civil Asset Forfeiture
Governments use their political influence and relationships with private companies to block access to the world financial system for a specific country or company. A perfect example of this was when WikiLeaks was cut off from the world financial system due to the US government disapproving of the documents they released. After pressure from the US, Paypal, Visa, and Mastercard moved to block WikiLeaks, preventing them from collecting donations from their supporters worldwide. Wikileaks then moved to accept donations using Bitcoin, which the US government still hasn’t been able to block to this day. WikiLeaks is an example that evokes strong emotions, particularly because US media was able to convince the public that WikiLeaks was a “terrorist” organization rather than a press outlet seeking transparency. Just going to the WikiLeaks site can get you flagged by US cyber spying operations (one of the reasons none of the links on this page direct to WikiLeaks), and I am most likely being flagged for writing about them here.
Civil Asset Forfeiture is a system in the United States that allows police departments to seize property if it is deemed to be connected to a crime. In April of last year, Iowa state troopers used a false claim to pull over two poker players driving through their state. The trooper said he pulled them over because they failed to use their turn signal when passing another vehicle, but his dashcam footage clearly shows that they did signal. They proceeded to search their car and find $100k worth of cash that the pair had won in a poker tournament in a neighboring state. They also found trace elements of marijuana in the trunk. The police confiscated the cash, saying carrying such large amounts of it was proof of criminal activity. The core of the problem: Police departments receive 100% of cash obtained through civil forfeitures, so they are incentivized to “steal” as much as possible. A common tactic for the Iowa State Troopers is to pull over individuals with out of state plates. Individuals from other states are more likely to be carrying cash and are less likely to fight the case, because it would be inconvenient to travel back to Iowa to fight it in court. They are the perfect targets for what basically amounts to government sanctioned highway robbery.
Between 2011 and 2013, the Iowa State Troopers alone have seized about $7 million in cash from motorists. When governments show that they are willing to break/bend the law to steal money from its citizens, having a method to store one’s wealth in a secure fashion becomes that much more essential. If the pair had stored their winnings with Bitcoin, not only would the cops not have found any physical cash when searching the car, if they had found their encrypted Bitcoin wallet, they wouldn’t have been able to seize their Bitcoin without the correct password.
iframe width=560 height=315 src=//www.youtube.com/embed/3kEpZWGgJks frameborder=0 allowfullscreen/iframe
A “bail-in” is a technique pioneered last year in Cyprus, and refers to the confiscation of depositor funds in a troubled bank, in order to use those funds to save the bank from collapse.
“The terms of European creditors for its bail-out included not just the usual demands for austerity and reforms but an unfamiliar demand for a banking “bail-in”—getting debt holders and uninsured depositors to absorb bank losses and to stump up new capital. The experience of this small island has big implications; bailing-in creditors will be how future banking crises are tackled in Europe.” The Economist
Put simply, the key difference between a bailout and a “bail-in” is that the former uses taxpayer funds to rescue a bank while the latter uses funds stored with the bank by depositors. While the use of both are controversial, “bail-ins,” in particular, set a dangerous precedent. The possibility of a “bail-in” taking place in the future reduces confidence in all deposits stored with banks. The people who had been saving their wealth and working hard to earn it didn’t cause the banks’ collapse, but their savings were taken to pay for its rehabilitation.
People desire a secure way to store their wealth; Bitcoin enables that and more. It provides the capability of transferring your wealth anywhere in the world instantly using a decentralized network. For the first time in human history, you can store your money by merely memorizing a passphrase, with nobody other than yourself able to access it, or even know it exists. Bitcoin provides financial freedom, in a way that has never been possible before. The disruption potential is enormous; financial systems will be changed forever. No more sanctions. No more civil asset forfeiture. No more “bail-ins.” Bitcoin is a tech based solution that makes these financial concepts obsolete.
We do not serve ads. Tips are always appreciated: 18wJZi9JLA5xBB6xe93PKtexzZjmZc6wb6
Disclaimer: This post is intended solely to provide information. As I have no knowledge of individual circumstances and technical level, readers are expected to complete their own due diligence before proceeding with anything mentioned in this article. The topics discussed in this post are advanced and readers proceed at their own risk. Readers are expected to complete their own due diligence before purchasing or selling anything mentioned or recommended.