Is Bitcoin A Boon Or A Bane For Totalitarian Regimes? – Tech Tribune France

North Korean leader Kim Jong Un. Photo: Athit Perawongmetha/Reuters

Bitcoin is promoted as a force for individual freedom, but the blockchain technology behind it could be perverted and used to enforce compliance by oppressive regimes.

The world’s preeminent cryptocurrency has been hailed as the antidote to monetary colonialism and the key to unlocking the shackles of poverty and corruption for millions of people suffering within the world’s worst totalitarian regimes.

Human Rights Foundation Director of Strategy Alex Gladstein moderated a panel at the Bitcoin 2022 conference in Miami with Palestinian democracy advocate Fadi Elsalameen, Togolese human rights activist Farida Nabourema and defector and North Korean activist Yeonmi Park.

The discussion focused on the ability of the world’s preeminent cryptocurrency to empower individuals around the world and provide a way to escape the legacy of monetary colonialism and the demonetization of currency by authoritarian powers. .

At the Bitcoin 2022 conference in Miami, North Korean defector Yeonmi Park spoke about the plight of women who escape Kim Jong Un’s regime and end up in China, where they risk being sold as sex slaves.

North Korean writer Yeonmi Park. Photo: Leonardo Cendamo/Getty Images

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Underground Christian church groups are using bitcoin (BTC-USD) to provide the financial aid needed to help these escapees.

Park said: “Most of the North Korean escapees end up in China and find it difficult to get help, so when North Korean girls arrive in China, many are sold as sex slaves.

“When these women have children with Chinese men, the children are unregistered and become stateless and there are up to 300,000 North Korean women in China and up to one million unregistered children.

“Religious groups use bitcoin to educate children and mothers and also to help them find a way out of China. So we can empower these children and women with bitcoin.”

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Park added that North Koreans could “create a different world with bitcoin because individuals would have the financial power in their own hands.”

She believes bitcoin could have saved North Koreans from the bitter consequences of currency devaluation and demonetization that led to extreme levels of poverty and starvation in the isolated regime in 2009.

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On November 30, 2009, Pyongyang ordered a sudden confiscatory currency reform that saw individual savings wiped out overnight.

The regime has set up a currency exchange designed to “make everyone equal”.

Citizens were told they had one week to convert a limited amount of their old currency into the new currency at a rate where one new North Korean won was worth 100 old North Korean won.

This new limit meant that most people’s savings were wiped out overnight, leaving most families able to afford only a few kilos of rice.

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It was a way for Pyongyang to regain economic control within the state from a black market economy that had grown since its inception as a survival mechanism during the extreme famines of the 1990s.

Bitcoin, by design, is a digital currency that governments cannot control, and its use in Ukraine amid the Russian invasion has shown that it can be a powerful tool for harnessing the collective power of individuals at worldwide.

The crypto donations that have flowed into Ukraine have proven to be faster and easier to manage than those using fiat currencies through official channels.

Deputy Minister of Digital Transformation in Ukraine, Alex Bornyakov, said on Twitter: “The Ministry of Digital Transformation has initiated the creation of the Crypto Fund of Ukraine and set up with a partnership with the Kyiv-based crypto exchange KUNA, which provides us with a technological infrastructure. . We were able to raise over $50m (£38.5m) in crypto-assets and move those funds into fiat currency.

The blockchain technology that powers bitcoin and other cryptocurrencies is a double-edged sword.

It could be exercised in the direction of greater individual freedom and a fairer means of exchange for society with a monetary system that cannot be degraded or manipulated by a centralized authority.

On the other hand, however, it could also be used by an oppressive regime to impose complete surveillance and control over its subjects.

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Instead of freeing the individual from the grip of centralized power, blockchain technology could be used to consolidate the control of authoritarian regimes and corporations.

An authoritarian regime that controls a “Big Brother” blockchain could monitor and instruct most areas of a citizen’s life.

Bitcoin’s distributed ledger, the public blockchain that reveals all transactions, could be controlled by a centralized authority if that authority is able to take control of mining operations on the network.

The protocol that guides how bitcoin works is designed so that the longest chain of blocks is the most valid, and forks of that chain that have fewer blocks are considered invalid.

The longest blockchain is achieved by having the highest hash rate, and the hash rate requires incredible amounts of computing power.

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If one entity, or a collaboration of actors, is able to control more than half of the world’s bitcoin mining operations, then it could manipulate the distributed ledger in a way that suits its purposes.

A centralized authority could control the lives of its citizens. If purchasing power is controlled by programmable money, that money could be limited, or turned off and on, to punish wrongdoers or reward loyal citizens.

One example that could be abused in this way is China’s nascent central bank digital currency.

If the digital yuan were tied to China’s social credit system, an individual’s ability to purchase goods and services could be restricted and their access to certain areas of the country controlled.

With the advent of Internet of Things technology, an interconnected blockchain that links digital currency to devices or locations in the physical world could see citizens locked into their own vehicles or apartments using smart contract technology.

When everything is automated and the world is controlled by algorithms, it is the power that can manipulate the blockchain that will wield the ultimate power.

In a decentralized system, the management of the blockchain is democratic, but if the centralization goes through a concentration of computing power, in the case of a ‘proof of work’ system, or through an accumulation of digital currency in a ‘proof of stake’, then a blockchain-based tyranny might be much harder to escape than a traditional tyranny.

In the future, it will not be those with the most weapons who will win, but those who control the blockchain.

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Is Bitcoin A Boon Or A Bane For Totalitarian Regimes? – Tech Tribune France

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