My Journey to Bitcoin
Bitcoin can mean different things to different people. To me, it represents a personal fight for freedom.
Bitcoin can mean different things to different people. To me, it represents a personal fight for freedom. Having lived in a country where basic freedoms were suppressed, Bitcoin holds a special significance for me.
My family left Ukraine, which was then a part of the Soviet Union, in 1989. Under the Soviet socialist regime, prices were fixed, capital was controlled, information was censored, people were routinely and arbitrarily jailed, and the government set exchange rates that were vastly divorced from the real-world value of the ever-devaluing ruble. The economy was failing to supply basic goods, with the government unable to allocate resources effectively without real price signals.
It was possible to obtain a free apartment, but only if you were lucky enough, and waited for twenty years. Many people continued to live in tiny apartments with three generations of family members. A pair of jeans could cost you a month’s salary. If you ever saw a line forming at a store, you would stand in it regardless of what was being offered that day, because you would purchase anything you could and exchange it on the black market for what you needed. Although owning foreign currency was illegal, people with connections always found a way to obtain it.
Although I was lucky to receive a high quality high school and university education after immigrating to the United States, I was unaware of the role of monetary policy in shaping Soviet society until I started learning about Bitcoin at the age of 35. After learning about ongoing currency crises and capital controls throughout the world, I asked my parents about what happened to our money when we left the Soviet Union. What I learned shocked me.
When my family left the Soviet Union, the government only allowed us to exchange $100 per person at their fixed ruble exchange rate. The street value of these rubles was almost nothing, so we took what little we could, along with suitcases of trinkets to sell on our way to America.
This was an example of the ugly face of capital controls: we could leave the country, but we had to start over wherever we went. Our money wasn’t really ours. As I learned more, I found out that this wasn’t just a unique problem isolated to the Soviet Union. It is something that continues to happen all over the world today. By controlling the flows of capital, governments can effectively control their population, preventing the free movement of people to better jurisdictions, and censoring people by cutting off their ties with financial services.
Bitcoin fixes this. It fixes all of it. It makes money truly portable and difficult to censor, giving people a real bargaining chip against their leaders for the first time in history. After all, real wealth is created by human labor and ingenuity. If people now have a choice of jurisdiction, then wealth will accumulate in jurisdictions that allow people to flourish.
Bitcoin is now providing real opportunities for people living under oppressive regimes. In Nigeria and Belarus, protesters have used it to raise funds when the government was restricted their access to financial services. In Afghanistan, young women are earning their own money by learning to code and using Bitcoin. Immigrants are using it to send money home without incurring exorbitant fees.
Relief aid has been sent to war-torn countries like Ukraine and Russia on nights and weekends, when traditional banks are closed, or when the US shut down Russia’s access to the banking system. Bitcoin has become a savings vehicle in Turkey, Nigeria, Argentina, Venezuela, Lebanon, and other nations experiencing currency devaluation. Bitcoin mining has even provided electricity to villages in Africa for the first time, raising their standard of living.
While many native-born Americans may find it difficult to imagine, immigrants are all too familiar with the problems of autocratic government. Unlike the United States, most countries do not have the privilege of a reserve currency that is widely in demand, and governments often abuse the monetary printing press, leading to massive currency devaluation. As such societies run into problems, governments tighten controls on money and information in a desperate attempt to hold their population hostage, with predictably disastrous results.
We cannot take our privileges for granted. If we do not fight to maintain them, we will lose our freedoms. Politicians have recently championed ideas like price controls on gas and eggs, trying to blame rising prices caused by their fiscal policy on “greedy” corporations. These dangerous ideas will distort markets and lead to shortages of basic goods. They have lied to our faces about the inflation we all experience daily, combining it into a single irrelevant number and manipulating the components that go into the calculation. We have seen the utter incompetence of our central bank in creating meme stock bubbles with zero interest rate policy, followed by blowing up banks when they raise rates.
The United States abuses our dollar reserve currency privilege to print ever more growing piles of currency to finance perpetual war, while causing the rest of the world to suffer by exporting our inflation. And now we are seeing this behavior start to turn on us with several countries starting to look for alternatives to US hegemony.
There is a way to opt-out. Like the printing press or the Internet, Bitcoin is a tool of empowerment for any who embraces it. Bitcoin multiplies the Internet’s democratizing effect on information by bringing control of money back to the people and creates permanent, non-government incentives to develop energy infrastructure critical to human flourishing.
What happens in a world where you can access the internet on a tiny device in your pocket? What if you could accumulate a form of money that cannot be seized by your government by performing tasks over the internet and getting paid instantly? What if the government could only pay its military and bureaucrats in a devalued currency that no one else wants? What if people created circular economies based on hard money and built real wealth for themselves, like local businesses and schools?
Bitcoin will take us to a bright orange future, where humanity can coordinate on top of the best monetary network ever created to create lasting wealth together. We will find ways out of broken regimes and into ones that focus on freedom. Will a passphrase stored in our heads provide a way out? I’m optimistic.
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Yan Pritzker is the co-founder and CTO of Swan Bitcoin, the best place to buy Bitcoin with easy recurring purchases straight from your bank account. Yan is also the author of Inventing Bitcoin, a quick guide to why Bitcoin was invented and how it works.
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