“May we live in interesting times” – Anon.
Certain features of bitcoin lend themselves very well to the perpetual fight against censorship.
Some time ago, we had touched upon the wide-spread prevalence of Bitcoin as the de facto currency in Venezuela. In July this year, BTC was trading at a 600% premium in Zimbabwe.
The use of cryptocurrencies as a hedge against political and economic distress is picking up once again as the ongoing civil unrest in Hong Kong is leading to corporations accepting payments in cryptocurrencies. The protests are beginning to have an economic impact with thousands of protesters flocking to ATMs to withdraw HK dollars and converting them to USD. A leading department store announced on its Facebook page that it would start accepting payments in BTC, ETH and LTC across all its stores. The department store wants to leverage the lightning network to transact in BTC and convert them into fiat dollars in real time.
Enough has been said here and elsewhere about the role of cryptocurrencies, especially BTC, as a hedge against the risk of currency deflation and transaction censorship; what is not emphasized often enough is its feature as a hedge against bad governance and bad government. With China seemingly determined to have its way with Hong Kong, cryptocurrencies can be (and are being) used to support dissent. By enabling transactional pseudonymity/anonymity, cryptocurrencies allow individuals to make economic choices while deciding how to selectively reveal themselves to the world. Their global, distributed nature makes it extraordinarily hard for a nation-state to enforce norms or censor transactions, as we saw with Wikileaks.
In further evidence supporting the case for investing in cryptocurrencies, we urge all our readers to read this blog post; This one shines a harsh light on the various fault lines emerging in the current global economic landscape and explores how bitcoin is the perfect hedge against the impending economic cataclysm that has been brewing for a while.
Tomorrow, we will touch upon PBOC’s crypto (CBDC) play; been expecting this for a while, and it is finally here.