Over the last century, financial elites have held a tight grip on economic power. However, a new era of decentralised finance is emerging, challenging the status quo. Bitcoin, often touted as the digital era’s gold standard, is more than a bulwark against hyperinflation. As this cryptocurrency and underlying blockchain technology evolves, a future can be envisioned in which bitcoin facilitates humanitarian aid, acts as a hedge against government tyranny, supports the green transition, and contributes to global poverty reduction.
As the scales of power begin to tilt, the elites are no longer the sole arbiters of our economic destiny. Now, they must negotiate with us.
Political freedom: Canadian truckers
The Canadian truckers’ protest during the height of the COVID-19 pandemic serves as a stark reminder of how easily financial transactions can be controlled and frozen by authorities, even in liberal democratic societies. When Canadian truckers exercised their right to protest against vaccine mandates, their government responded by invoking the Emergencies Act and, ultimately, freezing their bank accounts. When fiat-based fundraisers were started for the protesting truckers, they were also shut down. This incident highlighted the potential of bitcoin as a sovereign financial system, as bitcoin-based platforms like Tallycoin enabled direct donations to the truckers’ bitcoin wallets. The success of the ‘HonkHonk Hodl’ campaign in surpassing its 5 BTC goal demonstrated bitcoin’s ability to circumvent the restrictions of traditional financial systems. Enhanced privacy features, such as unique address generation for each transaction, offered a layer of protection for donors and made it more difficult to associate these payments together.
However, this high-profile incident also exposed bitcoin’s limitations. Its pseudonymous nature and the permanent record of transactions on a distributed public ledger mean that funds remain subject to scrutiny and potential freezing by authorities. Nonetheless, the successful distribution of funds through HonkHonkWallets, despite government intervention, highlighted bitcoin’s effectiveness in bypassing centralised controls. While Canadian authorities managed to freeze some of the funds raised by the HonkHonk Hodl campaign, bitcoin still proved its worth as a hedge against censorship, surveillance, and political persecution. This case emphasises a crucial point: in a world where fiat currency use is increasingly subject to government oversight, bitcoin stands as a beacon of financial autonomy, albeit one that requires continued refinement and user vigilance.
Revolutionising humanitarian aid
One of the most pertinent challenges in helping civilians in conflict zones is ensuring that charitable donations are delivered to the desired recipients. Corrupt leaders and autocratic regimes have always posed significant obstacles, often misappropriating funds meant for those in need, as has been the case with the misuse of Gaza Strip aid by Hamas. For the first time in history, blockchain technology (on which bitcoin and other cryptocurrencies operate) allows for funds to be distributed directly to the civilians. The peer-to-peer nature of bitcoin’s blockchain eliminates the need for a middleman or centralised authority, enabling donors to send funds directly to the recipients’ bitcoin wallets, thereby maximising security and privacy.
Its effectiveness has been demonstrated by a UN pilot project which utilised blockchain technology to provide aid to Ukrainian families displaced or affected by the Russian invasion. The project implemented an innovative approach by distributing cash assistance using Circle Internet Financial’s USD Coin (USDC), a stablecoin pegged to the value of the U.S. Dollar. This digital currency was deposited directly into the recipients’ digital wallets, which they could access via their smartphones. The beneficiaries were allowed to convert their digital funds into cash, enabling withdrawals in dollars, euros, or local currency at any MoneyGram location worldwide. Additionally, they had the option to transfer the aid directly to their personal bank accounts, providing a versatile and practical financial lifeline during a time of crisis.
Bitcoin use is particularly strong in countries plagued by war: in Ukraine, approximately 12.7% of the population (about 5.5 million people) hold bitcoin, and this cryptocurrency has passed the test in facilitating many aid efforts.
Bitcoin is a green technology
A common misconception about bitcoin is that it is environmentally unsustainable because of the vast amount of energy that is increasingly required for bitcoin mining. However, bitcoin is now predominantly mined using renewable energy sources: over 50% is from solar power, hydroelectricity, or windmills. This represents a sharp increase from 39% in 2018. The shift towards greener energy accelerated after China’s ban on bitcoin mining. The United States, which leads the world in sustainable bitcoin mining, absorbed a large number of Chinese mining rigs, significantly boosting the share of renewables in bitcoin’s energy mix.
In El Salvador, the first country to recognise bitcoin as legal tender, geothermal energy from the country’s volcanoes is utilised to power bitcoin farms. As of 2024, 474 bitcoins have been mined using energy from the Tecapa volcano, valued at about 29 million USD. Geothermal energy is abundant in El Salvador where there are around 20 volcanoes. Most importantly, it is clean energy which produces very little carbon dioxide, emitting 95% less carbon dioxide than regular thermal power plants. With new and innovative ways of decreasing bitcoin’s carbon footprint, this fits in perfectly with the ‘net zero’ goals that elites in Brussels and beyond endorse.
Bitcoin farms can be located anywhere in the world, incentivising miners to find the cheapest energy sources and to use excess energy which otherwise would be wasted. Since bitcoin and other crypto markets operate around the clock, seven days a week (unlike traditional stock markets), they are perfectly suited to making use of all the waste energy that is available from renewable sources. Some miners are even repurposing the excess heat generated from mining operations for agricultural use, or returning it to the power grid, transforming what was once an energy-intensive process into a potential revenue stream.
These innovations suggest that bitcoin mining, if guided by sustainable practices, can not only coexist with but also actively aid the global shift toward greener energy solutions.
Poverty alleviation
Bitcoin presents new opportunities for those in emerging economies, providing the freedom to transact without any gatekeepers. Through bitcoin, anyone can now enter the wider global economy and marketplace, and have the chance to be lifted out of poverty. 51% of adults in Sub-Saharan Africa still remain unbanked and this distribution is uneven across countries, with only 6% of adults in South Sudan having a bank account. Although many are unbanked, most have access to smartphones, which is all that is required to invest in bitcoin. One example is Nigeria, which ranked as the second largest bitcoin market in 2021 (following the U.S.), and which has led the way in peer-to-peer trading. Bitcoin attracted Nigerians as a direct result of the devaluation of the naira, hyperinflation, and restrictive banking laws imposed by the Central Bank of Nigeria (CBN), particularly in relation to international transactions. Many Nigerian banks enforced spending caps of as little as 20 USD per month on international payments, charged extortionate fees on foreign transactions, prohibited payment services like PayPal, and even restricted ATM cash withdrawals abroad. This meant that Nigerians were unable to access higher wages by working for foreign companies or by sending money back home from overseas work, and even basic conveniences like subscribing to foreign services such as Netflix were restricted. Bitcoin provided an alternative pathway, allowing Nigerians to participate in the global economy without the constraints of the traditional financial system, and enabling them not only to earn and transfer money freely but also to build wealth and financial freedom, notwithstanding Nigeria’s challenging economic conditions.
Despite the CBN’s crackdowns on the use of cryptocurrencies, bitcoin has continued to flourish, which is a testament to its effectiveness against centralised control and its ability to provide financial freedom and opportunities in an environment where traditional banking systems are limited or heavily regulated.
Bitcoin realism
While bitcoin presents numerous opportunities, its relatively novel status means it still faces significant challenges, particularly in terms of scalability. As adoption grows, the demand for quick and efficient transaction processing will increase, necessitating advancements in blockchain technology. Overcoming these limitations is essential to fully realising the potential of cryptocurrencies as viable alternatives to fiat currencies, not as mere investment vehicles or stores of value. The future of bitcoin will depend on addressing these issues with innovative solutions, such as layer 2 networks, paving the way for a truly democratised and decentralised financial system.
