The lack of central authority in Bitcoin — and cryptocurrency in general — is the fundamental reason governments and institutions are afraid of it. As a payment network fueled by its users, Bitcoin is limited in nature, while fiat currencies are produced by the government periodically.
Leading political figures fear that Bitcoin might be employed to compromise capital controls, be misused for money laundering and pose a risk to people who don’t have sufficient financial education. Despite this skepticism, many individuals fervently advocate for Bitcoin, especially people of color, underrepresented minorities and unbanked communities in the United States, Africa and Latin America.
The harsh antagonism targeted at Bitcoin has led to the emergence of many atrocious figures in the political arena. For example, former Greek finance minister Yanis Varoufakis has posited that it would be “catastrophic” if Bitcoin took the place of fiat currencies. Furthermore, he attacked the democratic nature and essence of Bitcoin, saying in an interview last month that it “creates a kind of feudalism run by the early adopters of Bitcoin.”
Despite the rigid criticism regarding cryptocurrencies, Bitcoin has formed a sense of belonging and a tribe-like community since its inception in 2009. With the fanatical commitment of its followers and the existence of its mysterious creator, Bitcoin is akin to a religion. If Satoshi Nakamoto is perceived as a prophet, then the Bitcoin whitepaper is the sacred text, and the exponents worship the whole system. Many early adopters of Bitcoin were attached to it in order to protest what they regarded as the corruption of the government and the central banking system, as well as those entities’ sinister manipulation of currencies and the money supply.
But is Bitcoin really a utopic system belonging to fanaticism, or does it have real potential, especially when it comes to generating a new system of financial socialism, equality and revolution — unlike the current corrupted systems governed by central banks, oligarchs and governments?
During the COVID-19 pandemic, underrepresented minorities, especially the Black community in the United States, have realized the necessity of finding an alternative instead of entirely relying on a financial system that doesn’t promote equal interests and opportunities. While some trust the government to make better policies, high-profile Black individuals have promoted taking action; in the process, they took the future into their own hands. For example, Oscar-winning director Spike Lee referred to the cryptocurrency revolution as “the digital rebellion.”
But the United States still has a long way to go before it can truly call itself a place that fosters entrepreneurial spirit among all — not just those who already have sufficient financial means.
According to a Global Strategy Group survey conducted during the early months of the pandemic, just 12% of Black and Latinx business owners who submitted an application for financial aid from the Small Business Administration received what they had asked for. Moreover, 26% reported that they received only part of what they had requested, and almost half said they expected to be forced to close their business in the following six months. Furthermore, it is a well-known fact that the Paycheck Protection Program prioritized wealthier applicants at the expense of underrepresented business owners who didn’t have existing banking relationships. All of this highlights the historically racist attitudes that underrepresented business owners have suffered in the traditional financial system for centuries.
Systemic racism has contributed to the persistence of race-based gaps that crop up in various economic indicators. Racial disparities persist across wealth, health, education and beyond. As a trader and cryptocurrency expert, I believe developing nations can liberate themselves from American financial hegemony by making Bitcoin a legal tender, as El Salvador has recently done. Today, as the digital money ecosystem known as cryptocurrency has come into being, growing numbers of Black Americans are flocking to it in a bid to embrace financial equality.
According to Isaiah Jackson, author of the outstanding book “Bitcoin & Black America,” by perpetuating the use of banks to deposit money, Black people feed a system that doesn’t care about them. He claimed that “all those deposits would enrich banks which encouraged redlining, denied loans to qualified applicants, and even beyond race, bankrupt the entire financial system in 2008.”
In January, Jackson said Bitcoin is a key way to rectify economic injustice and urged Black investors to adopt the digital coin as a way of long-term saving. He emphasized that, for the first time in history, the Black community has an alternative to the current financial system, which has a history of racial discrimination and other heinous acts committed by retail banks. Now, those in the Black community — as well as those in other communities facing discrimination — have the opportunity to shift their entrepreneurial mindset and lay the foundation for a better future by allowing Bitcoin and cryptocurrency to act as a means of economic freedom.
Serkan Aydin is an independent journalist and a research assistant at the University of Leeds. Contact the opinion desk at [email protected] or follow us on Twitter @dailycalopinion.
