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Bitcoin Enforces Universal Human Rights - Bitcoin Magazine

​​This is an opinion editorial by Anita Posch, the founder of Bitcoin For Fairness who has traveled extensively around the world to learn how the globally unbanked can benefit from sovereign money.In 2022, European politicians formed an initiative with the goal of banning proof-of-work mining because of its high electricity consumption. The underlying goal is to blame Bitcoin for damaging the environment, when it’s — as they claim — just a tool for useless speculation.In 2021, the co-founder of Ripple, which advertises itself as having better qualities than bitcoin, donated $5 million to support Greenpeace USA with a campaign called “Clean Up the Code.” It attempts to lobby Bitcoin developers to change the mining mechanism from proof of work to proof of stake, which would supposedly reduce its power consumption by 99%. With Ethereum moving from proof of work to proof of stake recently, these actors feel they have seen their theory confirmed and are trying to lobby against Bitcoin even more.What they don’t mention is that the differences between proof of work to proof of stake are huge. These mechanisms have different goals and very different outcomes, which result in different properties of the cryptocurrencies they secure. In short: the immutability of proof of work is stronger than that of proof of stake. Proof of work is better at producing a robust, immutable blockchain that has a fair degree of decentralization and cannot be easily tampered with, even by very rich, very influential, very powerful organizations and entities. Proof of stake doesn’t have any of these goals. It has the goal of governance in an environmentally-friendly way that still maintains decentralization but allows some flexibility of a blockchain. In the short weeks after Ethereum’s switch, the overwhelming proportion of validators started to censor transactions following the U.S. Office of Foreign Asset Control (OFAC) sanctions list.Proof of work makes Bitcoin uncensorable, immutable and permissionless. These are the properties for resistance. It’s a tool for financial self defense and a Trojan horse for freedom. Bitcoin is a silent revolution. It empowers civil resistance. It’s our only shot at finding a better money that actively enforces human rights and supports activists in their resistance against dictators and authoritarians.In this article, I won’t discuss energy use, because as soon as you understand the importance of Bitcoin to make the world more fair, you’ll get that the amount of energy used is off topic. You’ll understand that even better when you understand that Bitcoin mining is securing the total value stored on the blockchain and renders it the most secure network that we know of. And, on top of that, Bitcoin mining is already one of the greenest industries globally.In the following, I lay out how Bitcoin enforces seven of the 30 articles mentioned in the Universal Declaration of Human Rights. It should become clear that Bitcoin is neither useless nor just a tool for speculation.

The Universal Declaration Of Human Rights

Let’s turn back time to December 1948. Three years after the end of World War II, the world was still in horror over what had happened since Germany attacked Poland in September 1939. It started a war that lasted six years, killed approximately 80 million people, including six million Jews and many other members of minorities like Roma, Sinti, Black Germans, the differently abled, socialists, communists and homosexuals.As a consequence, the United Nations was founded in 1945 by 51 countries committed to maintaining international peace and security, developing friendly relations among nations and promoting social progress, better living standards and human rights.One of the outcomes was the Universal Declaration of Human Rights which was proclaimed on December 10, 1948. In succeeding decades it has been integrated into many countries’ laws and can be seen as a common standard of achievements for all peoples and all nations. It sets out, for the first time in human history, fundamental human rights to be universally protected and it has been translated into over 500 languages.SourceAn UN committee chaired by Eleanor Roosevelt drafted 30 articles. Hansa Jivraj Mehta, an Indian educator, independence activist, feminist and writer, was responsible for changing the language of the Universal Declaration of Human Rights from “all men are born free and equal” to “all human beings are born free and equal,” highlighting the need for gender equality.SourceThe Universal Declaration of Human Rights served as a recommendation for a number of laws. Laws can be enforced or not. Laws in themselves are no guarantee that anyone is treated equally or is not being discriminated against or free from suffering under financial oppression. Contrary to human-enforced laws, a protocol that is enforced by mathematical rules built in consensus with all its users will always be non-discriminatory and provide an inclusive financial system. “Rules without rulers,” as Andreas M. Antonopoulos says.The questions remain: How much electricity is the life and freedom of billions of people worth? How do people in the developed North come to decide what a good use of energy is for the South? Beyond a tool for “speculation,” isn’t Bitcoin also a great tool for privacy and financial self-sovereignty globally?Let’s take a look at the state of the world today and how this global regulatory regime came into place that is defining who has possibilities and who hasn’t.

The State Of The World

The Unequal Distribution Of DemocracySourceFifty-four percent of the global population lives in authoritarian or hybrid regimes. They don’t enjoy the privilege of living in full democracies. Only 6.4% of all people live in countries of “full democracy” like Germany, France, Austria and so on, or in the U.S. All of the others around the world are living in either flawed democracies or they are in full dictatorships or authoritarian regimes. The place where you were born largely defines the chances you’ll have in life (exceptions are rare).SourceA look at the map of the democracy index shows a pattern to remember. The dark red areas are the countries where life is the worst, their peoples have the least freedom. The worst country per this metric is Afghanistan, followed by Myanmar, North Korea, the Democratic Republic of the Congo, Syria and the Central African Republic.The Centers Of CorruptionSourceA look on the map of political corruption shows a similar pattern. The dark red areas are stretched from the Northeast, starting in Russia and China, going over Africa and into South America. There seems to be some sort of correlation between corruption and failing democracies. That is corruption enables both human rights abuses and democratic decline. In turn, these factors lead to higher levels of corruption, setting off a vicious cycle.The Inequality Of WealthSourceFinally, let’s look at the world wealth map. The same pattern is visible. In countries with dictators and authoritarian leaders, people are on average poorer, with the poorest countries being in Africa and the Middle East.The average net worth across the entire world indicates the enormous disparity between the developed world and everyone else. At one extreme, there are countries with net worth (with “net worth” being measured as the market value of all assets minus any outstanding debts) numbers over $500,000, and at the other extreme, there are places where people have less than $500 to their names. There is a smattering of light orange countries in between, but the worldwide map demonstrates an astonishing level of inequality between the haves and the have nots.

A History Of Monetary Power

The British EmpireThe reasons for the huge inequality are manifold. Colonialism has definitely been one of them. This map below shows the British Empire in 1910. This political and economical control enabled the United Kingdom to become the first monetary hegemon (“hegemony” refers to a single state that has decisive influence over the functions of the international monetary system). In 1910, the British pound was still backed by gold (the gold standard meant that a portion of circulating money was backed by gold in the treasuries of banks) and everyone used it for trade.SourceThe United States Of PowerAfter the first world war, this British power faded. The second world war created a new hegemon. The U.S. had won the war, had the most powerful economy and controlled basically all of the world’s gold reserves. During the war, many European countries sent their gold reserves to the U.S. to protect them from being stolen by the Nazis.As financial analyst Lyn Alden describes:“With the Bretton Woods system and the following petrodollar system, the United States obtained a near-global lock on the international money system. Previous empire currencies never obtained that complete of a financial lock on the world, and thus were never true ‘global reserve’ currencies but instead were just ‘widely recognized and dominant’ currencies…“However, after only a decade, the Bretton Woods system began to fray. The United States began running large fiscal deficits and experiencing mildly rising inflation levels, first for the late 1960s domestic programs, and then for the Vietnam War. The United States began to see its gold reserves shrink, as other countries began to doubt the backing of the dollar and therefore redeemed dollars for gold instead of comfortably holding dollars…“The system had an underlying flaw that when left unaddressed brought the system down. It was never truly sustainable as designed. There was no way that the U.S. could maintain enough gold to back all of its currency for domestic use, and simultaneously back enough currency for expanding global use as well (which was the part that was redeemable).”

The Birth Of The Fiat System

As Alden continues: “Eventually in 1971, math came back with a vengeance on the Bretton Woods system, and Richard Nixon ended the convertibility of dollars to gold, and thus ended the Bretton Woods system. The closing of gold convertibility was proposed to be temporary at the time, but it ultimately became permanent. Rather than shifting to another country, though, the United States was able to re-order the global monetary system with itself still in the center, in the next system.” When Richard Nixon abolished the gold standard in 1971, he basically rendered all currencies in the world as fiat money. “Fiat” is a Latin word that means “let it be done.” Since 1971, our currencies aren’t backed by gold anymore and only have value because they are legal tender. The economical consequences have been immense.It was the first time in history that only fiat currencies existed. This can lead to serious problems, for instance when one tries to use printed paper in another country. Why should businesses and governments in other countries accept pieces of paper, which can be printed endlessly by a foreign government and have no firm backing, as a form of payment for their valuable goods and services? The fiat system had a problem.

The Petrodollar

In 1974, following a variety of geopolitical conflicts including, the Yom Kippur War and the OPEC oil embargo, the United States and Saudi Arabia reached an agreement to sell their oil exclusively in U.S. dollars in exchange for U.S. protection and cooperation. From there, the world was set on the petrodollar system; a clever way to make a global fiat currency system work decently enough.SourceThe Petrodollar Since 1974But the system is cracking here and there. In August 2017, for instance, Venezuela declared that it would cease pricing its oil in U.S. dollars and instead use euros, yuan and other currencies. In March 2022, media reports suggested that Saudi Arabia was considering pricing some of its oil sales to China in the Chinese yuan rather than the U.S. dollar. On March 23, 2022, Vladimir Putin announced an order forbidding “non-friendly” countries (including EU countries, the U.S. and Japan) from buying Russian gas in any other currency besides Russian ruble (although the Russian Finance Ministry reportedly said it would also accept gold or bitcoin).

A Decentralized Global Monetary System

Alden’s base case going forward is that:“...over the next several years, the global economy will, more likely than not, encounter a bear cycle of the current petrodollar system. If so, assets such as global equities, quality residential real estate, precious metals, industrial commodities, and alternatives such as Bitcoin, are likely to do well. From there, the global monetary system will gradually become more decentralized, in the sense that alternate payment systems and alternate currency settlements among trading partners are growing in use. This will indeed be a more structural shift towards a new system. It could happen slowly, as it already is, or it could accelerate if the US itself also shifts out of the fraying system.”

Consequences Of Monetary Hegemony

For at least the past 78 years, marked by the end of World War II, the global economy has more or less revolved around the U.S. dollar. The Bretton Woods system was also the start of global financial institutions like the International Monetary Fund (IMF) and the World Bank. Since then, a lot of additional organizations like the Bank For International Settlements (BIS), the Financial Action Task Force (FATF) and OFAC were launched. Unelected representatives are inventing rules to fight money laundering, tax evasion and, in recent decades, terrorism. I haven’t heard of any financial regulation that was voted on by the population. But every country in the world has to regulate its banks. In parts for good reason, but despite the overarching regulations, the world is still riddled with fraud, banking failures (and now, also cryptocurrency fraud in cases such as FTX, Luna, etc.) and money laundering. It’s just that the small fish get caught, while the big fish in most cases simply pay a fine which is less than their profits and move on.There is already enough regulation and laws around traditional finance and the cryptocurrency industry. The fall of FTX was caused by fraud, not because Bitcoin is a tool to rip off people. The opposite is true. Read the full article