Amazing is the fact that bitcoin and other cryptocurrencies, being progressive inventions, are more in demand in the world’s underdeveloped countries. They compensate for the lack of a free market and developed banking industry.
The citizens of Venezuela have been in the permanent financial crisis because of the authoritarianism of their president, Nicolas Maduro. People lack even the basic products like bread and gasoline. And there are so few medicines that people spend hours in the queues to get it. No wonder that from time to time terrifying news appears in social networks. For example, recently everyone was shocked by the video, which showed how the angry protesters broke into the zoo to eat a horse. Or another thing is a report on how activists of the country make Molotov cocktails from human feces, because there is no gasoline for this purpose.
How does bitcoin fit into this social chaos? It undermines the currency control of the country, although it is difficult to talk about such a thing with regard to Venezuela. After all, there the level of annual inflation can reach 18000%. And yet some of the inhabitants of the country found inspiration in going online, getting some bitcoins, and then paying them for imported goods. State currency control does not allow you to do this directly. But bitcoin and its decentralized nature make it possible to bend these rules. Entrepreneurs import food and essential goods from American ports, such as Miami in Florida.
But even here the state decided to interfere and screw everything. Maduro and the country’s police “solved the problem” with bitcoin miners at the end of last year. The cops arrested the virtual coin’s miners on false charges, among which the following were most often mentioned:
- undermining the foundations of state authority;
- сall for revolution.
Against this background, the issue of the local official cryptocurrency petro was perceived as an act of incredible hypocrisy. Allegedly now with the help of petro the country will be able to circumvent the sanctions imposed on it by other countries.
In fact, petro became not a symbol of freedom and progress, but a sign of repression and oppression. The Venezuelan government decided to arrange total control even in a decentralized environment, which includes cryptocurrencies. Independent miners and traders were outlawed. So the authorities of the country are trying to strengthen the control over people.
However, the measures were not very effective. Mining cryptocurrency in Venezuela has not died, it still exists. Those entrepreneurs, who have learned to bypass prohibitions and to deal with forced power cuts, remain free from senseless currency controls, from a repressive state that since 2012 has violated all possible civil and economic rights.
Brazil is another example that both bitcoin’s fans and their opponents ignore. This country has one of the most corrupt, authoritarian governments in the world. Economy is under total control and it is the 153rd country in the world by index of economic freedom, according to the research of the analytical center of the Heritage Foundation.
Both former and current presidents and rulers regularly have been accused of taking bribes and mismanagement. This surprises many people who once read about the rise of the Brazilian economy in school textbooks. Ukraine, shaken by internal conflicts, Belarus, living under a dictatorship, Haiti, suffering from the devastating earthquake effects and growing corruption, is freer than Brazil economically.
Taxes for the import of goods in the country are extremely high. They can reach over 60% of the product price. This harms both business and consumers who wish to trade with foreign countries and order goods from there. The decentralized nature of the blockchain and cryptocurrency undermines this system. After all, businessmen can bypass banking diktat by paying bitcoins for supply. In addition, the country has bureaucratized the document verification system for international trade. Entrepreneurs are forced to pay a lot to notarize new certificates and for verifying contracts. But some of them already do this via OriginalMy, where you can store copies of important documents encrypted in the blockchain.
Wherever there is business and a free market, inevitable state institutions appear that impinge on them and strive to regulate everything by their own. This is not an unavoidable harm: if the measures are implemented correctly, freedom of action in the market can be increased and consumers can be protected from scammers. The problems of Venezuela and
Brazil are not that. There, officials are unstoppable, they want to not just settle, but in general close the cryptocurrency markets.
The ban of bitcoin and its analogues does not make sense, as demonstrated by China, which took these measures last year. In Venezuela, too, after the mining was banned, almost no one stopped doing it. Everyone just went underground.
Bitcoin and other virtual currencies, as well as its basis – blockchain, have chances to become a major event in people’s lives. Step by step they are conquering this world, but now they are able to serve the highest humanitarian purposes. Digital money, indeed, helps people change their lives for the better. Cryptocurrencies allow citizens of autocratic and bureaucratic countries to improve their business. After that, even the most skeptical people will see real examples of how cryptocurrencies contribute to social progress. They will accept bitcoin and other virtual coins, when they realize that is it the tool of economic and social changes. Now this is not just a toy in the technical students’ and geeks’ hands. This is a future type of money and payment systems, which will change the political and economic climate for the better.