Why Bitcoin Can Protect Your Trading and Finances
We’ve talked about how using Bitcoin for cross-border transactions at the individual level is a powerful tool. It is faster, easier and removes the need of a trusted third party. Keeping these concepts in mind, in this post we discuss the benefits of using Bitcoin in environments where governments impose their power and influence on weaker countries or their own citizens.
Bitcoin Makes International Trading Fairer
Often times, powerful nations impose economic sanctions on countries in order to exert their influence and get the weaker nations to succumb to their demands. For example, the US currently has some form of sanction or embargo on 29 different countries. The majority of the time, these are well intentioned and lead to net a positive outcome. Sometimes though, they are unfair due to the massive power imbalances and the people that suffer the most are the citizens of these smaller nations. These developing nations are heavily dependent on exporting their goods to the developed nations of the west in order to survive and eventually prosper. If that lifeline is cut off, it can be catastrophic for the citizens of these countries. Bitcoin can be a powerful tool in these circumstances. Merchants, traders, and exporters can all shift their commerce activities onto bitcoin if they are cutoff from the legacy financial systems. They can continue to access the lucrative markets that demand their goods even when the politicians are fighting endlessly about one issue or another. In theory, they can ask to receive payment in bitcoin and, in turn, ask to pay their suppliers and expenses in bitcoin, keeping the extra bitcoin as profit. When the alternative for all parties is the supply chain shutting down completely, they will all switch to Bitcoin to keep things going. As more entities and individuals transition to bitcoin, more infrastructure and services will be built to support this new way of doing business. The bitcoin ecosystem will grow, the price will steadily increase and, most importantly, these unfair government sanctions will start to lose their effectiveness.
Bitcoin Protects Your Funds Against Government Corruption
Sometimes, governments impose authoritarian rules against their own citizens. Examples include restricting access to bank accounts, restricting capital outflow, and downright confiscation of property. In each of the examples above, bitcoin is a perfect tool for law-abiding citizens to sidestep these criminal acts. If the majority of people’s funds are held in Bitcoin, instead of bank accounts, they would be able to avoid the ‘run on banks’ that tends to occur during economic uncertainty. If governments are restricting capital outflows via wire transfers or other traditional methods, we’ve already discussed in great detail how easy it is to send funds across borders using bitcoin. Lastly, if citizens of authoritarian regimes see that their country is headed towards an economic downturn they have the ability to liquidate their assets and buy bitcoin in order to avoid the possibility of confiscation.
The Future of Bitcoin Could Be Bright
In lots of parts of the world, the trend seems to be headed towards less individual rights and more authoritarian governments. In such a world, bitcoin will try us from the shackles of these powerful entities, allow us to trade freely with anyone in the world, and continue to prosper!