Antonopoulos About the Value of Censorship-Resistant Cryptocurrencies Like Bitcoin
March 2022 — Censorship-resistance is considered to be one of the main value propositions of Bitcoin, meaning that no nation-state, corporation, or third party has the power to control who can transact or store their wealth on the network. Recent events regarding the war in Ukraine and the associated financial sanctions on Russia imposed by the West, have triggered a discussion about whether censorship-resistant, permissionless money is a good or a bad thing. A few days ago, Andreas M. Antonopoulos took a personal stand on this topic in a video livestream, describing why censorship-resistant money can positively influence the distribution of power in the world and thus lead to more freedom for all people in the future.
One of the most famous Bitcoin evangelists in the crypto space is Andreas M. Antonopoulos, a British-Greek tech entrepreneur and author of numerous books on Bitcoin and open blockchain technology. In livestreams on YouTube, Andreas regularly answers questions about Bitcoin & Co. posed to him by his subscribers. One of the many questions that reached Andreas in late February 2022 concerned his assessment of Bitcoin’s property of being censorship-resistant, which has the potential to render financial sanctions imposed against a country like Russia ineffective. The exact wording of this question was as follows:
„Sanctions are a tool against dictators and war criminals (Russia). Bitcoin obviates financial sanctions. Many people will say, that this is bad. Is there a better alternative to pressure dictators than financial repercussions?”
Andreas’ personal response to this was, in my view, so impressively farsighted and well to the point that I will quote below. Please note that the punctuation is based on my own interpretation and I have omitted filler words. The original video excerpt of Andreas’ speech can be found on YouTube (46:35–53:43, duration ~7 minutes).
Answer and quote from Andreas M. Antonopoulos
“I disagree 100% with the idea that it is bad that you cannot impose financial sanctions on flows of money with Bitcoin and the reason for that has to do with the fundamental asymmetry of power. The thing is, financial sanctions are a tool that is applied by the few, often supposedly on the few, but very often has unintended consequences and impact far beyond the intended targets.
When you put sanctions on a country, the people of that country (innocent people who have nothing to do with these decisions, who don’t have the ability to influence these decisions at all) are affected. The broader the sanctions, the more generic the sanctions, the less targeted the sanctions, the more people are affected. But even with highly targeted sanctions — again — more people are affected than the intended targets of this.
There is a better alternative to pressure dictators than financial repercussions and that is to give the people in the country the tools to fight the dictator. Because if you think about it from this perspective… the West has been incredibly shy about imposing sanctions on Putin. It took an actual rolling of tanks into a democratic country (pretty much in the heart of Europe) to get for the first time a mention of sanctioning Putin himself and some of his inner circle and to start talking about cutting Russia off the SWIFT system, which — again — would hurt a lot more Russians.
The problem here is, that the people who have the choice to do these sanctions, hesitate. The reason they hesitate is because they understand that is has unintended consequences on their own populations as well! 30% to 40% of Europe’s energy needs are paid in US dollars to Gazprom for Russian gas, oil and coal. Therefore, if you cut Russia off SWIFT, energy prices in Europe triple over night (at a time when we already have a lot of inflation). So, who does that hurt? I tell you who it hurts: It hurts the poorest people in Europe! The irony of this is, that some of the poorest people who will not have enough money for gas and heating will be Ukrainian refugees in Europe. Because those are the kinds of people who don’t have power, and certainly not financial power. They’re dispossessed, they’re disadvantaged. You have to really consider that from a broader perspective.
Now, let’s look at it from a different perspective: This is about imposing controls on Russian banks. Who has done more to impose controls on Russian banks? Putin! Putin has used Russian banks to completely cripple any possibility of political opposition within the country. Putin has used the tools of financial sanctions, controls, currency controls, confiscations, expropriations, privatizations, nationalizations, etc. to punish his political opponents. He did it very famously to one of the biggest oligarchs, stripping all of his companies, ceasing all of his assets in the Russian banks and throwing them in jail, which sent a very clear message to all of the other rich people. That message wasn’t “Don’t be rich” (of course not), it was “Don’t fund the opposition”.
Putin has actually benefitted more from the tools of financial control than he has suffered from the tools of financial control. Giving uncensorable money to the Russian people would do more damage to Putin by removing his ability to control the finances of the many rather than trying to create a world where all finance can be controlled by the few, which would give the power supposedly to Europeans, Americans and other nations that control the SWIFT system. But ultimately that power comes with massive unintended consequences…
If you want to prevent the dictator from using cryptocurrency to their advantage, you give the opponents of the dictator cryptocurrency.
If you want to prevent the criminals, the narco-trafficker from using cryptocurrency to their advantage, you make sure that the populations that they hold under their thumbs have cryptocurrency to fight back.
The answer to limitations of freedom is more freedom for the opposition. It is not less freedom for everybody, because of power asymmetry.
There are more people who are opposed to what is happening right now, than there are people who benefit from it. Because the power is concentrated in the hands of those who benefit from it, these decisions happen. If the power was not concentrated, but was in the hands of those who oppose war and invasion and enriching the defense industry, then Putin wouldn’t be able to make this decision and we wouldn’t have this problem in the first place.
We don’t fix the concentration of power by concentrating power.
We don’t fix the control over finances that has resulted in a dictatorship effectively in Russia (in all but name) by creating financial controls that can spread the joy of dictatorship everywhere else in the world.
If you have any questions or comments related to Andreas’ words or this article, let’s discuss in the comments or on LinkedIn. I am happy to connect!