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Canada Rings the Bell…

Dave Weisberger

December 09, 2022

an earlier op ed written for thedefiant.io

If you had Canada proving the need for a censorship-resistant, store-of-value on your 2022 bingo card, well, you are smarter than me, but, here we are…

to protest

For the truckers and their supporters, this was an act of civil disobedience. And yet Trudeau’s government froze demonstrators’ bank accounts and encouraged doxxing of contributors to their cause. 

Bitcoin has facilitated over $10 million in donations to the Ukrainian resistance

Now it’s time to take stock of what we learned from these recent examples. First off, Bitcoin is not a panacea. But it can (and does) bestow its holders with an invaluable monetary liberty. It is important, however, to clarify how Bitcoin can help, and to elucidate what it does not do.

Bitcoin is censorship-resistant, but not censorship-proof. Simply put, it’s pseudo-anonymous nature is most similar to cash that one uses in personal transactions.  Cash does have limitations, as large transactions are reportable and moving large amounts across international borders without declaration is a serious crime.  

Bitcoin is similar to cash in that regard, as large transactions with centralized exchanges are reportable and those exchanges are subject to regulatory oversight. Theoretically, the laws regarding physical movement across borders apply as well, but the ability for Bitcoin to be held in small hardware wallets makes those rules hard to enforce.

There are, however, three important ways Bitcoin differs from cash. First, it’s value is not directly linked to an infinitely printable fiat currency, but rather on how people value it as an asset with enforced scarcity. Much virtual ink has been devoted to that subject, as Bitcoin is already an alternative to rapidly depreciating currencies such as the Venezuelan bolivar and can grow into an alternative to more mature currencies.  

More importantly, Bitcoin transactions do not require physical proximity, making it ideal for the global, digital world. It would be difficult for an individual in the U.S. to support a peaceful protest north of the border using cash.  

Third, Bitcoin is far more portable, and, while transactions can be traced from one wallet address to another, it is relatively easy to hold large values of the commodity in those wallets, which themselves can be moved and hidden with relative ease.

with the officials sending respondedin a tweet

As amusing as it was to see Ottawa’s struggle to shut down Bitcoin, the government can block access to the banking system or force centralized exchanges to comply with their edicts. None other than Jesse Powell, the CEO of Kraken, pointed this out when he tweeted:  “Please do not fund causes directly from custodial wallets. I’m sure freeze orders are coming. Withdraw to non-custodial before sending.”  

That, however, does not mean Bitcoin has no value in these cases as has been suggested by many commentators.  While access to the banking system can indeed be blocked, Bitcoin is seen as a long term savings vehicle as well as an alternative to fiat.  

 life-saving medium of exchange

 So, what does this mean going forward?

observed on Twitter

I believe the lack of condemnation and exposure of raw state power will be a wake up call to major investors concerned about their own governments’ willingness to seize their assets. 

The idea that “it can’t happen here” is now a thing of the past. Bitcoin’s ability to hold wealth outside the financial system just became much more important for the observant global citizen. I suspect that this will prove to be a catalyst to a new group of wealthy converts as they digest the implications.

 If so, the need for censorship resistance will have a profound impact when the dust clears…