Ville

In Bitcoin as a Nonviolent Tool Against State Financial Censorship, I wrote that Bitcoin “serves as a form of resistance against financial censorship by enabling borderless, censorship-resistant, and permissionless transactions”. Later Louisa Alexa, the author of The Rage, wrote a piece of that in Forbes and I was ecstatic. However, I noticed she didn’t read into the limitations of my study and mention them in the Forbes piece at all. And those limitations were quite important if one is to understand how Bitcoin could work against financial censorship. Even my case studies highlighted that. I think she exaggerated things.

In the early days, Bitcoin was said to be private, anonymous, and untraceable. Thus users in the infamous Silk Road darknet marketplace used bitcoin quite extensively for their narcotics purchases being blindly confident in its anonymity. Today many everyday Bitcoin users think the system is fully traceable, but that too is not true.

Another story we believe is that bitcoin is safe for human rights activists, or as Alex Gladstein likes to put it: freedom tech; freedom from censorship and freedom to transact. Indeed it is. But it is not without its caveats and the small, grey footnotes.

But this is like believing that bitcoin is private without really understanding how to make it private. So the same, it is like believing bitcoin is freedom tech without understanding how to make it so. Certainly the design affordances of Bitcoin to make it so is much easier to be such, than say, with traditional banking or cash. Unfortunately people take this story blindly without understanding the practical obstacles properly.

Moreover, Alex Gladstein tells the story of how Bitcoin is a trojan horse, which authoritarian regimes take inside their walls. He claims that Bitcoin is “freedom go up, price go up”, “freedom technology”. (I guess it would not be a great slogan if we said really fast the fine print afterwards.)

Certainly all nation-states benefit from bitcoin in various ways, such as sanction evasion or propagating digital mercantilism by creating bitcoin reserves. It is purely game-theoretic. However, such state adoption does not automatically or typically translate into individual freedom and empowerment.

Mainly, Bitcoin increases the freedom potential of individuals in authoritarian societies, but only when they can safely use self-custodial, non-KYC/private, censorship-resistant pathways. I don’t see how this potential expands when the authoritarian state adopts Bitcoin for its own purposes. The authoritarian leader and orange-pilled bitcoin advocate of El Salvador tried that and more, and bitcoin adoption was negligent.

Gladstein implicitly assumes that wealth means empowerment, means political leverage, means freedom. However, this argument ignores a host of things, such as structural inequality, surveillance mechanisms, political repression, capital controls, state violence, and the simple fact that wealth doesn’t necessarily equal to rights. Not even rich individuals are safe from authoritarian states. See for example China, Saudi Arabia, and the people falling from windows in Russia. Economic capital does not necessarily equal to political agency in coercive regimes.

So it is true in the narrow sense that bitcoin is freedom tech. As the narrative goes, Bitcoin does support censorship-resistant payments, non-custodial money, borderless transactions, pseudonymous economic activity, and resistance to asset seizure (to a point). Such donations are very helpful from broader movements to singular human rights activists. As technology, Bitcoin has strong freedom-enabling properties by design. This is what we have been given to understand.

But the story is false in the broad, practical sense. Bitcoin is not inherently liberating when it is used through custodial chokepoints, monitored through surveillance, regulated through mandatory KYC, imposed on citizens rather than chosen by them, and bad privacy practises.

We generally mix up what Bitcoin the technology can afford for individuals with what it de facto does under messy, real life situations. We treat Bitcoin’s technical features as if they automatically lead to whatever, political or economic, freedom. But this only works if people understand and can safely use those features, which is often not the case.

So while bitcoin provides control over money, it does not necessarily ensure power. Power depends on the intention to use the money, and the ability to do so. Having all the money and control does not guarantee success for activists. This was exemplified by Freedom Convoy that accumulated CA$ 1 million worth of bitcoin but could only utilise a fraction of it due to their failure to exchange bitcoin to fiat.

Therefore, Bitcoin’s freedom-enabling qualities require the following: peer-to-peer marketplaces, self-custody, open internet, safe devices, knowledge, and great operational security (OPSEC) practises.

In short, if you are an activist, you must first begin to understand what you are hiding from, what is your threat model and who is your adversary. Then you must understand how to use p2p marketplaces, how to use wallets and private keys, and understand OPSEC.

For example, one must understand good privacy hygiene when it comes to bitcoin, such as not to reuse addresses, using wallets that have built-in Tor and Lightning Network, to name a few. And if digital forensics is a concern, use a laptop with Tails OS or Qubes OS, or Graphene OS in smartphone. There is a whole site dedicated for more about this.

All of this is to say, that Bitcoin alone may not be enough to enable an individual to benefit this freedom technology as intended. There is a lot more that goes into it, especially depending on one’s OPSEC needs and practises.