Bitcoin as a Solution to the Debanking Crisis
By Carus Eoghan
Did you know that Bitcoin hit its all-time high of $40,000 this year? Did you know that if you had exchanged that $1,200 stimulus check (aka Trump Bucks) into Bitcoin, it would currently be worth around $6,000? Did you also know that JP Morgan’s price prediction for Bitcoin is $164,000, and that “orange coin good” and “number go up?” If you’ve been anywhere near a television playing CNBC lately, you probably know all of these things. If you don’t, pull your head out of the sand and join the rest of us, please.
For the last six months or so, I’ve been contacted by numerous friends and family members asking me, “is now the time to buy Bitcoin?” Honestly, I should be charging for my financial services at this point. In fact, every time there is a price dip in Bitcoin, my father texts me and jokingly asks to speak with “his financial advisor.” By now, everyone either thinks they’ve missed the boat or that the ship is just about to leave port. This isn’t an article about how much money you could make on Bitcoin if you bought some today, so go ahead and let that go.
Bitcoin’s price isn’t what really matters, contrary to the opinion of every “crypto” talking head on television and the internet. Bitcoin’s most important function is that it can be a financial life raft for you if polite society deems you an enemy of the status quo. Unfortunately, this rather important detail is being eclipsed by a bunch of price charlatans drawing triangles on graphs.
The Debanking Crisis
The day after President Biden’s inauguration, a Florida bank announced that it had closed down Donald Trump’s bank account, thus making it one of several companies that are now refusing to do business with the former president. This isn’t the first time dissident voices have had their bank accounts closed by the Cathedral. Last year, Chase Bank shut down the bank accounts of Martina Markota, Enrique Tarrio, and Joe Biggs. Right-wing personality Gavin McInnes is also a well-known victim of the ongoing debanking crisis, having been denied access to his PayPal account in 2018. Now with Nancy Pelosi and Hillary Clinton calling for a “9/11 style commission” into the storming of Capitol Hill and right-wing extremism, it would be naive to assume that the debanking will end here.
Perhaps the most notable instance of debanking, however, occurred in 2010 when “an extra-legal banking blockade” by multiple US financial services including PayPal, Visa, Mastercard, Bank of America, and Western Union took collective action against WikiLeaks’ founder, Julian Assange. And what saved Assange and Wikileaks, you might ask? You guessed it; Bitcoin saved Wikileaks. Not only did Bitcoin allow Wikileaks to remain operational, but by 2017 Assange claimed to have made a 50,000% return on his received donations.
The Role of the Banks
Unfortunately, today’s average consumer doesn’t think about the process it takes to swipe their Visa card and receive goods and services. The amount of time I’ve had to explain credit card transaction fees to customers is in the thousands. Put bluntly, every time you swipe that piece of plastic in your wallet to buy groceries, you’re asking a third party (aka a bank) to verify the transaction between you and another person. The banks’ job to ensure that there are no instances of double-spending and that everyone has the correct amount of money in their accounts.
By entrusting the banks with this information and giving them the power of the final arbiter of monetary transactions, we relinquish our financial sovereignty. If the bank decides that we aren’t allowed to transact, then that is that. You experience this hard fact every time you’ve gone to the store, swiped your card, and read “payment declined” on the machine reader, despite knowing very well that you have the adequate amount of funds to make your purchase. Now imagine seeing “payment declined” at the repair shop because the bank found out that you were at a Trump rally last weekend. It might sound crazy to some of you, but it is gradually becoming a stark reality.
The Bitcoin Solution
If you don’t know much about Bitcoin, you’re probably wondering how this “magical internet money” could possibly save you and your family from financial ruin. To fully comprehend Bitcoin, you need to understand that it is more than just money; it is an open-source, peer-to-peer network explicitly designed to free people from the grips of the modern banking industry. Instead of trusting the banking cartel to keep an accurate record of your capital and all of the transactions you make on a daily basis, you can maintain your wealth on the decentralized ledger known as “the blockchain.”
With Bitcoin, you are no longer required to ask your bank for permission to engage in commerce with the rest of the world. The issue of double-spending is mitigated by the network of “miners,” who are rewarded Bitcoin to maintain the ledger and ensuring, thus allowing the rest of us to enjoy financial liberty. Not only can you engage in commerce freely, but you send wealth (denominated in Bitcoin) anywhere on the globe at any time, and it can’t be confiscated (unless the government gets ahold of your private keys). Not only does Bitcoin eliminate our dependence on centralized banking, but it also offers us the ability to avoid the federal confiscation of gold.
Whether or not you are skeptical about Bitcoin being sound money, it should be regarded as an essential alternative in the face of debanking. Bitcoin’s price value increasing is just an added perk.
(For the pro-Bitcoin Austrian Economic perspective, please see Saifedean Ammous’ The Bitcoin Standard)