One of the features of cryptocurrency that fanatics advocate is freedom from all government. I don’t think this is realistic. But certainly in extreme cases you can see where cryptocurrency can fill a need when government totally breaks down-or is authoritarian.
Venezuela has a self imposed crisis right now. It’s a textbook case in how socialism doesn’t work. There are no projected economic statistics, or facts on the ground that would say this form of government is good for people. Black markets are rampant. The “public” markets are out of everything. The government is cracking down on all kinds of people, violently. Socialism and communism only work at the tip of a spear. People have turned to Bitcoin as a way to survive.
Ironically, the subsidies that Venezuela uses to make electricity “free” has given some Venezuelans a way to generate an income by mining Bitcoin. Of course, the price of electricity in Venezuela is artificial. Electricity isn’t free.
People are using free electricity to generate Bitcoin and buy food from merchants (and get it delivered!) that don’t accept Bitcoin in America. It’s a marvelous illustration on what people how far survive. Mind blowing.
Markets and economics are ingrained in human DNA. Over and over throughout the course of human history, we have seen humans turn to and develop markets as a means to survive. One of the best cases you can read to learn about this is the Economics of a POW Camp. It’s a case study on the market economy that arose in German POW Camp Stalag Luft One during WW2. I have met POWs from this camp and they have confirmed it.
The interesting thing about the POW camp is that the market economy worked without any centralized currency. Prices fluctuated with supply and demand. As soon as a centralized authority imputed what prices should be, the market collapsed.
It’s a very hard lesson to learn. It’s painful to watch countries like Venezuela melt down, especially when you know the situation was caused by a group of people that wanted to grab power to enrich themselves.
One thing that has been very interesting to me about the rise of Bitcoin in America is who is using it. It’s not the wealthy or the middle class, but the people that are unbanked.
This discussion shows how people are fighting for their survival by using Bitcoin. They have found ways to use Bitcoin, even though merchants aren’t taking it. The Internet Army is strong.