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---
title: Bitcoin as an Anti-Authoritarian Force
date: 2022-05-02
created: 2022-05-02
description: "Evaluating the thesis that Bitcoin (and crypto more generally) is an anti-authoritarian force and can help undermine tyranny by providing a state-resistant payment rail."
image: /img/anti-auth-thumbnail.png
title: Crypto can provide a transnational state-resistant payment system for dissidents
description: The claim being made here is that a. a transnational state-resitant payment system is desirable, b. crypto can provide this, and c. the benefits of this would outweigh any negative externalities. We find this claim to fail on points a. and c. and to therefore be false.
youtube: https://youtu.be/U_-Bdx1mqS8
podcast: https://anchor.fm/life-itself/episodes/Bitcoin-as-an-Anti-Authoritarian-Force-e1i25vg/a-a7gpq18
featured: true
aliases: notes/bitcoin-as-anti-authoritarian.md
category:
- claim: y
- featured: y
- interview: y
- deepdive: y
claim:
- evaluation: NN
- confidence: HH
---
***
# Summary
## Claim Steel-Manned
Bitcoin provides a privacy-friendly way to store or transfer funds in situations where the state is an adversary – for example, when opposing a repressive regime.
### Subclaim 1: Crypto can provide a state-resistant transnational payment rail
A blockchain-based global supranational payment system which is censorship resistant against nation state actors would effectively allow parties from any jurisdiction to move value anonymously and with no controls.
There are examples of crypto being used as a form of, or to facilitate, disobedience: Edward Snowden and Sci-Hub.
* Snowden speaks on the infosec conference circuit and likely receives all his speaker fees via bitcoin which he converts into Russian rubles.
* Sci-Hub pirates every scientific paper from Elvesier, Wiley, and other academic publishers and hosts a PirateBay style mirror site in which researchers can bypass paywalls and download paper. The server is run by one woman in Russia,Alexandra Elbakyan, who takes crypto donations. She is seen as a folk hero giving knowledge to the world and advancing science.
* Sci-Hub pirates every scientific paper from Elvesier, Wiley, and other academic publishers and hosts a PirateBay style mirror site in which researchers can bypass paywalls and download paper. The server is run by one woman in Russia, Alexandra Elbakyan, who takes crypto donations. She is seen as a folk hero giving knowledge to the world and advancing science.
### Subclaim 2: An unregulated transnational payment rail is desirable
Not everyone lives in a stable liberal democracy. Sometimes it’s necessary to circumvent the state, when laws are unjust or regimes are corrupt.
Crypto can provide a privacy-friendly way to store or transfer funds in situations where the state is an adversary – for example, when opposing a repressive regime.
## Evidence of claim being made
Lyudmyla Kozlovska quoted in [financialinclusion.tech. ‘21 Human Rights Advocates Write to Congress about Bitcoin’s Humanitarian Benefits’. Accessed 13 September 2022:](https://www.financialinclusion.tech/)
Lyn Alden [@LynAldenContact] (2022) _Twitter_. Available at: [https://twitter.com/LynAldenContact/status/1529084598268968962](https://twitter.com/LynAldenContact/status/1529084598268968962) (Accessed: 14 September 2022).
> People from Nigeria, Ethiopia, Senegal, Togo, Venezuela, and Afghanistan keep telling me here in person how they use bitcoin to deal with authoritarian bank control or persistent inflation that continually wrecks their savings. While westerners on Twitter say it’s useless.
Lyudmyla Kozlovska quoted in Aderinokun, Ire. _et al_. ‘21 Human Rights Advocates Write to Congress about Bitcoin’s Humanitarian Benefits’, 21 June 2022. [https://www.financialinclusion.tech/](https://www.financialinclusion.tech/)
> For me, Bitcoin is not just technology. It has literally saved the lives of my friends and many Ukrainians. Without it, we would not have been able to raise money so quickly to pay for protective equipment for soldiers in the early days of the Russian invasion
## Evaluation: False
## Evaluation
**Crypto assets are not a shield against government tyranny.** In his whitepaper *Bitcoin, Currencies, and Fragility*, Nassim Taleb writes of the "safe haven from tyranny" thesis:
### Subclaim 1: Crypto can provide a state-resistant transnational payment rail
Crypto assets are not a safe haven for one’s investments or a shield against government tyranny. In his whitepaper _Bitcoin, Currencies, and Fragility_, Nassim Taleb rebukes the "safe haven from tyranny" thesis:
> By its very nature, bitcoin is open for all to see. The belief in one’s ability to hide one’s assets from the government with a public blockchain easily triangularizable at endpoints, and not just read by the FBI but also by people in their living rooms, requires a certain lack of financial seasoning and statistical understanding — perhaps even a lack of minimal common sense. For instance a Wolfram Research specialist was able to statistically detect and triangularize "anonymous" ransom payments made by Colonial Pipeline on May 8 in 2021 — and it did not take long for the FBI to restore the funds. We can safely assume that government structures and computational power will remain stronger than those of distributed operators who, while distrusting one another, can fall prey to simple hoaxes
>
@ -42,6 +56,21 @@ This is best evidenced by the Canadian convoys in 2022 which attempted to take i
The complete ban of [crypto assets](../concepts/cryptoasset.md) by the People's Republic of China also does not lend credibility to the thesis that [crypto assets](../concepts/cryptoasset.md) are outside the remit of authoritarian controls and their restriction on capital movement and controls over domestic [money services business](../concepts/money-services-business.md).
### Subclaim 2: An unregulated transnational payment rail is desirable
From the perspective of civil society a global supranational payment system which is [censorship resistant](../concepts/censorship-resistence.md) against nation state actors **is not desirable**. The world already struggles with an excess of offshore tax evasion and dark money flows, as evidenced by the recent Panama Paper leaks.
#### Crypto facilitates tax evasion
Today there already exists an enormous [shadow banking](../concepts/shadow-bank.md) space which facilitates the creation of credit and movement of money through jurisdictions with questionable money controls and loose enforcement of policy. Many wealthy individuals avail themselves of this transnational network of trusts and shell companies to avoid paying taxes in their country of residence, opting to instead hide their money abroad in opaque financial structures set up in island nations like the Bahamas or Cayman Islands.
The incorporation of crypto into the shadow banking system, which is already happening, is providing even easier access for disreputable individuals to avoid taxes and to expand their holdings abroad. Instead of offshore shell companies, these individuals will use [stablecoins](../concepts/stablecoin.md) and [cryptoassets](../concepts/cryptoasset.md) to hide their money from tax authorities.
From the public interest perspective none of this setup is desirable, since it allows the already wealthy to avoid paying taxes and supporting [public goods](../concepts/public-goods-problem.md) and the welfare state which supports people with less resources than wealthy individuals. Crypto thus exasperates wealth inequality and allows individuals to circumvent the rule of law and undermine the entire social contract of democracy.
#### Crypto facilitates dark money flows
For every one Alexandra Elbakyan or Edward Snowden there are a thousand arms dealers, cartels, human traffickers, money launderers, and warlords who would also use crypto for far less benign purposes.
# Full Analysis
@ -126,32 +155,70 @@ The complete ban of [crypto assets](../concepts/cryptoasset.md) by the People's
## References
1. Allen, Hilary J. 2022. ‘DeFi: Shadow Banking 2.0?’ SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4038788.
2. Alvarez, Fernando, David Argente, and Diana Van Patten. 2022. ‘Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador’.
3. Analytica, Oxford. 2021. ‘El Salvador Bitcoin Experiment Comes with Risks’. Expert Briefings.
4. Binder, Carola. 2021. ‘Technopopulism and Central Banks’. SSRN Electronic Journal. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3823456.
5. Bogost, Ian. 2017. ‘Cryptocurrency Might Be a Path to Authoritarianism’. The Atlantic 30.
6. Braun, Benjamin, and Daniela Gabor. 2019. ‘Central Banking, Shadow Banking, and Infrastructural Power’. https://doi.org/10.31235/osf.io/nf9ms.
7. Buttigieg, Christopher P., Christos Efthymiopoulos, Abigail Attard, and Samantha Cuyle. 2019. ‘Anti-Money Laundering Regulation of Crypto Assets in Europe’s Smallest Member State’. Law and Financial Markets Review 13 (4): 211–27. https://doi.org/10.1080/17521440.2019.1663996.
8. Crandall, Jillian. 2019. ‘Cryptoeconomic Geographies and Contestation in Puerto Rico’. Thesis. PhD Thesis. http://jilliancrandall.net/cryptoeconomic-geographies-and-contestation-in-pr/.
9. Doody, Sean. 2020. ‘Reactionary Technopolitics: A Critical Sociohistorical Review’. Fast Capitalism 17 (1): 143–64. https://doi.org/10.32855/fcapital.202001.009.
10. Ferreira, Agata. 2021. ‘The Curious Case of Stablecoins—Balancing Risks and Rewards?’ Journal of International Economic Law 24 (4): 755–78. https://doi.org/10.1093/jiel/jgab036.
11. Fletcher, Emily, Charles Larkin, and Shaen Corbet. 2021. ‘Countering Money Laundering and Terrorist Financing: A Case for Bitcoin Regulation’. Research in International Business and Finance 56 (January): 101387. https://doi.org/10.1016/j.ribaf.2021.101387.
12. Greenberg, Andy. 2012. This Machine Kills Secrets: Julian Assange, the Cypherpunks, and Their Fight to Empower Whistleblowers. Penguin Randon House. https://www.penguinrandomhouse.com/books/309904/this-machine-kills-secrets-by-andy-greenberg/.
13. Gürses, Seda, Arun Kundnani, and Joris Van Hoboken. 2016. ‘Crypto and Empire: The Contradictions of Counter-Surveillance Advocacy’. Media, Culture and Society 38 (4): 576–90. https://doi.org/10.1177/0163443716643006.
14. Hanke, Steve, Nicholas Hanlon, Mihir Chakravarthi, and others. 2021. ‘Bukele’s Bitcoin Blunder’. The Johns Hopkins Institute for Applied Economics, Global Health, and the ….
15. Howson, Peter. 2020. ‘Climate Crises and Crypto-Colonialism: Conjuring Value on the Blockchain Frontiers of the Global South’. Frontiers in Blockchain 3 (May). https://doi.org/10.3389/fbloc.2020.00022.
16. Howson, Peter, and Alex de Vries. 2022. ‘Preying on the Poor? Opportunities and Challenges for Tackling the Social and Environmental Threats of Cryptocurrencies for Vulnerable and Low-Income Communities’. Energy Research and Social Science 84 (xxxx): 102394. https://doi.org/10.1016/j.erss.2021.102394.
17. Jutel, Olivier. 2022. ‘Blockchain Humanitarianism and Crypto-Colonialism’. Cell Press Open Access, Patterns, 3 (1): 8. https://doi.org/10.1016/j.patter.2021.100422.
18. Krugman, Paul. 2022. ‘The Strange Alliance of Crypto and MAGA Believers’. The New York Times, 11 January 2022, sec. Opinion. https://www.nytimes.com/2022/01/10/opinion/crypto-cryptocurrency-money-conspiracy.html.
19. Murray, Christine. n.d. ‘IMF Urges El Salvador to Ditch Bitcoin as Legal Tender | Financial Times’. Accessed 3 March 2022. https://www.ft.com/content/fbf9aef0-453f-4e61-bd83-ff2b2bc92221.
20. Orcutt, Mike. 2020. ‘This Is How North Korea Uses Cutting-Edge Crypto Money Laundering to Steal Millions’. MIT Technology Review. MIT Technology Review. http://www.technologyreview.com/2020/03/05/916688/north-korean-hackers-cryptocurrency-money-laundering/.
21. Ottenhof, Luke. 2021. ‘Crypto-Colonialists Use the Most Vulnerable People in the World as Guinea Pigs’. VICE Media.
22. Pilkington, Marc. 2017. ‘Can Global Elites Pave the Way for a New Transnational Unit of Account? A Reflection on the Numerical Nature of Money’. World Review of Political Economy 8 (4). https://doi.org/10.2139/ssrn.2339678.
23. Popper, Nathaniel. 2019. ‘Terrorists Turn to Bitcoin for Funding, and They’re Learning Fast’. The New York Times, 92–94.
24. Renieris, Elizabeth M. n.d. ‘Why a Little-Known Blockchain-Based Identity Project in Ethiopia Should Concern Us All’. Centre for International Governance Innovation. Accessed 22 February 2022. https://www.cigionline.org/articles/why-a-little-known-blockchain-based-identity-project-in-ethiopia-should-concern-us-all/.
25. Steele, Graham. 2021. ‘The Miner of Last Resort: Digital Currency, Shadow Money and the Role of the Central Bank’. Technology and Government, Emerald Studies in Media and Communications, Forthcoming.
26. Taleb, Nassim Nicholas. 2021. ‘Bitcoin, Currencies, and Fragility’. ArXiv:2106.14204 [Physics, q-Fin], July. http://arxiv.org/abs/2106.14204.
27. Wang, Gangjin, Yanping Tang, Chi Xie, and Shou Chen. 2019. ‘Is Bitcoin a Safe Haven or a Hedging Asset? Evidence from China’. Journal of Management Science and Engineering 4 (3): 173–88. https://doi.org/10.1016/j.jmse.2019.09.001.
28. White, Molly. 2022. ‘Cryptocurrency Off-Ramps, and the Shift towards Centralization’. Molly White. 12 February 2022. https://blog.mollywhite.net/off-ramps/.
29. Xie, Rain. 2019. ‘Why China Had to Ban Cryptocurrency but the U.S. Did Not: A Comparative Analysis of Regulations on Crypto-Markets between the U.S. and China’. Wash. U. Global Stud. L. Rev. 18 (2): 457–89. https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=1684&context=law_globalstudies.
Allen, H.J. (2022) ‘DeFi: Shadow Banking 2.0?’, _SSRN Electronic Journal_ [Preprint]. Available at: [https://doi.org/10.2139/ssrn.4038788](https://doi.org/10.2139/ssrn.4038788).
Alvarez, F., Argente, D. and Van Patten, D. (2022) ‘Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador’.
Analytica, O. (2021) ‘El Salvador bitcoin experiment comes with risks’, _Expert Briefings_ [Preprint].
Binder, C. (2021) ‘Technopopulism and Central Banks’, _SSRN Electronic Journal_ [Preprint]. Available at: [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3823456](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3823456).
Bogost, I. (2017) ‘Cryptocurrency might be a path to authoritarianism’, _The Atlantic_, 30.
Braun, B. and Gabor, D. (2019) ‘Central banking, shadow banking, and infrastructural power’. Available at: [https://doi.org/10.31235/osf.io/nf9ms](https://doi.org/10.31235/osf.io/nf9ms).
Buttigieg, C.P. _et al._ (2019) ‘Anti-money laundering regulation of crypto assets in Europe’s smallest member state’, _Law and Financial Markets Review_, 13(4), pp. 211–227. Available at: [https://doi.org/10.1080/17521440.2019.1663996](https://doi.org/10.1080/17521440.2019.1663996).
Crandall, J. (2019) _Cryptoeconomic Geographies and Contestation in Puerto Rico_, _Thesis_. PhD Thesis. Available at: [http://jilliancrandall.net/cryptoeconomic-geographies-and-contestation-in-pr/](http://jilliancrandall.net/cryptoeconomic-geographies-and-contestation-in-pr/).
Doody, S. (2020) ‘Reactionary Technopolitics: A Critical Sociohistorical Review’, _Fast Capitalism_, 17(1), pp. 143–164. Available at: [https://doi.org/10.32855/fcapital.202001.009](https://doi.org/10.32855/fcapital.202001.009).
Fanusie, Y. and Robinson, T. (2018) ‘Bitcoin laundering: an analysis of illicit flows into digital currency services’, _Center on Sanctions and Illicit Finance memorandum, January_ [Preprint].
Ferreira, A. (2021) ‘The Curious Case of Stablecoins—Balancing Risks and Rewards?’, _Journal of International Economic Law_, 24(4), pp. 755–778. Available at: [https://doi.org/10.1093/jiel/jgab036](https://doi.org/10.1093/jiel/jgab036).
Fletcher, E., Larkin, C. and Corbet, S. (2021) ‘Countering money laundering and terrorist financing: A case for bitcoin regulation’, _Research in International Business and Finance_, 56(January), p. 101387. Available at: [https://doi.org/10.1016/j.ribaf.2021.101387](https://doi.org/10.1016/j.ribaf.2021.101387).
Gorton, G.B. and Zhang, J. (2021) ‘Taming Wildcat Stablecoins’, _SSRN Electronic Journal_ [Preprint]. Available at: [https://doi.org/10.2139/ssrn.3888752](https://doi.org/10.2139/ssrn.3888752).
Greenberg, A. (2012) _This Machine Kills Secrets: Julian Assange, the Cypherpunks, and Their Fight to Empower Whistleblowers_. Penguin Randon House. Available at: [https://www.penguinrandomhouse.com/books/309904/this-machine-kills-secrets-by-andy-greenberg/](https://www.penguinrandomhouse.com/books/309904/this-machine-kills-secrets-by-andy-greenberg/).
Gürses, S., Kundnani, A. and Van Hoboken, J. (2016) ‘Crypto and empire: the contradictions of counter-surveillance advocacy’, _Media, Culture and Society_, 38(4), pp. 576–590. Available at: [https://doi.org/10.1177/0163443716643006](https://doi.org/10.1177/0163443716643006).
Hanke, S. _et al._ (2021) _Bukele’s Bitcoin Blunder_. The Johns Hopkins Institute for Applied Economics, Global Health, and the ….
Howson, P. (2020) ‘Climate Crises and Crypto-Colonialism: Conjuring Value on the Blockchain Frontiers of the Global South’, _Frontiers in Blockchain_, 3(May). Available at: [https://doi.org/10.3389/fbloc.2020.00022](https://doi.org/10.3389/fbloc.2020.00022).
Howson, P. and de Vries, A. (2022) ‘Preying on the poor? Opportunities and challenges for tackling the social and environmental threats of cryptocurrencies for vulnerable and low-income communities’, _Energy Research and Social Science_, 84(xxxx), p. 102394. Available at: [https://doi.org/10.1016/j.erss.2021.102394](https://doi.org/10.1016/j.erss.2021.102394).
Jutel, O. (2022) ‘Blockchain humanitarianism and crypto-colonialism’, _Cell Press Open Access_, 3(1), p. 8. Available at: [https://doi.org/10.1016/j.patter.2021.100422](https://doi.org/10.1016/j.patter.2021.100422).
Krugman, P. (2022) ‘The Strange Alliance of Crypto and MAGA Believers’, _The New York Times_, 11 January. Available at: [https://www.nytimes.com/2022/01/10/opinion/crypto-cryptocurrency-money-conspiracy.html](https://www.nytimes.com/2022/01/10/opinion/crypto-cryptocurrency-money-conspiracy.html) (Accessed: 3 March 2022).
Malloy, M. and Lowe, D. (2021) ‘Global Stablecoins: Monetary Policy Implementation Considerations from the U.S. Perspective’, _Finance and Economics Discussion Series_, 2021(020), pp. 1–14. Available at: [https://doi.org/10.17016/feds.2021.020](https://doi.org/10.17016/feds.2021.020).
Murray, C. (no date) _IMF urges El Salvador to ditch bitcoin as legal tender | Financial Times_. Available at: [https://www.ft.com/content/fbf9aef0-453f-4e61-bd83-ff2b2bc92221](https://www.ft.com/content/fbf9aef0-453f-4e61-bd83-ff2b2bc92221) (Accessed: 3 March 2022).
Orcutt, M. (2020) ‘This is how North Korea uses cutting-edge crypto money laundering to steal millions’, _MIT Technology Review_. MIT Technology Review. Available at: [http://www.technologyreview.com/2020/03/05/916688/north-korean-hackers-cryptocurrency-money-laundering/](http://www.technologyreview.com/2020/03/05/916688/north-korean-hackers-cryptocurrency-money-laundering/).
Ottenhof, L. (2021) ‘Crypto-colonialists use the most vulnerable people in the world as guinea pigs’, _VICE Media_ [Preprint].
Pilkington, M. (2017) ‘Can Global Elites Pave the Way for a New Transnational Unit of Account? A Reflection on the Numerical Nature of Money’, _World Review of Political Economy_, 8(4). Available at: [https://doi.org/10.2139/ssrn.2339678](https://doi.org/10.2139/ssrn.2339678).
Popper, N. (2019) ‘Terrorists Turn to Bitcoin for Funding, and They’re Learning Fast’, _The New York Times_, pp. 92–4.
Pupolizio, I. (2021) ‘From Libra to Diem. The Pursuit of a Global Private Currency’, _Global Jurist_ [Preprint]. Available at: [https://doi.org/10.1515/gj-2021-0055](https://doi.org/10.1515/gj-2021-0055).
Renieris, E.M. (no date) _Why a Little-Known Blockchain-Based Identity Project in Ethiopia Should Concern Us All_, _Centre for International Governance Innovation_. Available at: [https://www.cigionline.org/articles/why-a-little-known-blockchain-based-identity-project-in-ethiopia-should-concern-us-all/](https://www.cigionline.org/articles/why-a-little-known-blockchain-based-identity-project-in-ethiopia-should-concern-us-all/) (Accessed: 22 February 2022).
Steele, G. (2021) ‘The Miner of Last Resort: Digital Currency, Shadow Money and the Role of the Central Bank’, _Technology and Government, Emerald Studies in Media and Communications, Forthcoming_ [Preprint].
Taleb, N.N. (2021) ‘Bitcoin, Currencies, and Fragility’, _arXiv:2106.14204 [physics, q-fin]_ [Preprint]. Available at: [http://arxiv.org/abs/2106.14204](http://arxiv.org/abs/2106.14204) (Accessed: 25 February 2022).
Thier, H. (2022) _Bitcoin Cannot Free Palestine_, _MERIP_. Available at: [https://merip.org/2022/07/bitcoin-cannot-free-palestine/](https://merip.org/2022/07/bitcoin-cannot-free-palestine/).
Wang, G. _et al._ (2019) ‘Is bitcoin a safe haven or a hedging asset? Evidence from China’, _Journal of Management Science and Engineering_, 4(3), pp. 173–188. Available at: [https://doi.org/10.1016/j.jmse.2019.09.001](https://doi.org/10.1016/j.jmse.2019.09.001).
White, M. (2022) _Cryptocurrency off-ramps, and the shift towards centralization_, _Molly White_. Available at: [https://blog.mollywhite.net/off-ramps/](https://blog.mollywhite.net/off-ramps/) (Accessed: 25 February 2022).
Xie, R. (2019) ‘Why China Had to Ban Cryptocurrency but the U.S. Did Not: A Comparative Analysis of Regulations on Crypto-Markets between the U.S. and China’, _Wash. U. Global Stud. L. Rev._, 18(2), pp. 457–489. Available at: [https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=1684&context=law_globalstudies](https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=1684&context=law_globalstudies).