Bitcoin Reigns Supreme With Capital Control – Bitcoin Magazine
This is an opinion edit by Craig Deutsch is the organizer of the Asheville Bitcoiners, designer of The Bitcoin Game, and junior editor of Bitcoin Magazine.
You may have seen or heard Lebanese people robbing banks for their own money. They’re not Butch Cassidy, but they’re just trying to get their money out of the bank.
Lebanon is facing an economic crisis and banks have responded by locking depositors out of their accounts. As a result, multiple banks are stranded by customers who only want to withdraw their money.
In late June 2022, the G7 countries famously froze about $300 billion of Russian Central Bank funds, including $30 billion of Russian oligarch assets. Ethiopia’s central bank has banned the use of foreign currency in domestic commercial transactions and has lowered the threshold for how long returning residents can hold foreign currency. Taiwan faces significant capital outflows, raising the idea of foreign exchange controls if trends continue to worsen. A local bank in Mongolia limits the amount of dollars customers can buy from him per day to $300 as his foreign exchange reserves have fallen by 40%. Russian citizens are flocking to banks to withdraw funds, and the waiting time for him is 2-3 days.
Likewise, financial surveillance and censorship continues to advance. Sending money within the United States also carries risks. PayPal has expanded its “acceptable use policy” to threaten users with $2,500 fines for each violation. The company is well aware of freezing client funds. In January 2022, three users filed a federal lawsuit for locking out their accounts without reason. Most recently, the payment company closed the accounts of the UK-based Free Speech Coalition. (Author’s note PayPal will soon reverse course when it became apparent that many users were closing their accounts in response to this new policy).
I think you can see the trend.
Capital Controls and Capital Flight
People always find ways to protect their wealth.
When it comes to banking, it’s common knowledge that certain countries have more favorable privacy and tax practices. The release of the Panama Papers and Pandora Papers exposed the finances of current and past world leaders and over 100 of his other politicians, revealing how wealthy elites keep their money in offshore accounts and paper companies. Proved to have. Everyday people are locked out of their bank accounts.
As global tensions rise, the realities of capital controls are becoming increasingly apparent. When Russia first invaded Ukraine, there were stories that the wife of a wealthy politician was caught fleeing the country with a suitcase full of dollars and euros. I have already given many examples of countries tightening financial bonds for their citizens. It’s only a matter of time before people realize Bitcoin is the solution to currency restrictions and total control.
Bitcoin has no borders
According to Western Union, international transfers can take anywhere from 24 hours to 5 days. From the SWIFT website:
“There are several reasons why cross-border payments may be delayed or withheld. First, not all account balances can be updated outside of local payment system business hours. Delays may occur when payments pass through different countries or jurisdictions.”
Let’s expand on SWIFT’s statement and compare it to Bitcoin.
“First, not all account balances can be updated outside of local payment system business hours.” Bitcoin operates 24/7, 365 days a year. It has been running almost non-stop for over 5,000 days. Users often send money outside of normal business hours, such as weekends and holidays. Bitcoin settles transactions with finality in blocks approximately every 10 minutes.
“Delays can occur when compliance checks need to be performed, especially if payments pass through different countries or jurisdictions.” Bitcoin does not require compliance checks. A node verifies whether a transaction follows Bitcoin’s rules by ensuring that the Bitcoin is from a valid, unused transaction output and is not double-spent. There are no governments, authorities, gunmen, banks, or central third parties required to complete payments. Only miners are rewarded with bitcoins for expending energy and including valid transactions in blocks.
Nothing prevents you from sending bitcoins to other people around the world, regardless of your country, nationality, race, religion, age, or being on a sanctions list. I don’t know, I don’t know national borders.
Bitcoin is everywhere and nowhere. A ledger of all transactions is stored decentrally on computers called nodes running the Bitcoin software. If someone is trying to escape capital controls or any kind of oppression, even if they leave the country with their clothes on, by remembering their seed phrases and retrieving their funds when they get to a safe place, every bit You can access your coins.
Leaving a country due to capital controls, repression, or war is an extreme example, a drastic use case but very useful, but even the ability to travel with large sums of money is an impressive use. Case in point. One anonymous Reddit user claims to have left the country with $1 million in bitcoin by carrying a seed phrase with him on the flight.
Without going further into what it means to be able to flee the country with all your net worth in your pocket (or mind), here are the other major problems Bitcoin has solved. world.
It is still impossible to fully understand the implications of Bitcoin settling cross-border payments.
You can buy saffron from Afghanistan with a weeklong wire transfer or order it from a merchant and pay directly in Bitcoin.
Need to do some design work for your business? You can hire graphic designers from all over the world and they can get paid for their work in about 10 minutes.
I was able to send small amounts of bitcoin to strangers in Africa and they put the money in their wallets almost instantly.
These types of peer-to-peer transactions are exactly what Bitcon was designed to facilitate. The fact that we can choose to do business directly with anyone, anywhere in the world, is a major breakthrough with implications far beyond our comprehension. As Lyn Alden said in her “A Look At The Lightning Network”:
“When the iPhone came out in 2007, few people thought, 10 years from now, the taxi industry might really be in chaos.”
Bitcoin’s ability for users to easily, quickly, and trustlessly transmit value while retaining property rights in the face of tyranny has implications few people can comprehend.
People always find ways to protect their wealth. It is inevitable that people will come to the conclusion that Bitcoin is the best option for that.
This is a guest post by Craig Deutsch.Any opinions expressed are entirely their own and may not necessarily be those of BTC Inc. or Bitcoin magazine.
Bitcoin Reigns Supreme With Capital Control – Bitcoin Magazine
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