{"id":184,"date":"2014-07-10T02:43:00","date_gmt":"2014-07-10T02:43:00","guid":{"rendered":"http:\/\/blog.holytransaction.com\/cryptocoins-for-good\/"},"modified":"2023-01-10T01:25:44","modified_gmt":"2023-01-09T23:25:44","slug":"cryptocoins-for-good","status":"publish","type":"post","link":"https:\/\/holytransaction.com\/blog\/2014\/07\/cryptocoins-for-good.html","title":{"rendered":"Cryptocoins for good: Cryptocurrencies Empowering Citizens Against Oppressive Governments"},"content":{"rendered":"

How cryptocurrencies can change the balance of power between dictators and citizens<\/i><\/h2>\n
For many years currency exchange control has been a distinctive feature of dictatorships, from
\nthe \u201ccontrol by the ruble\u201d of the Soviet Gosbank, to the dual currency
\nsystem in Cuba, China\u2019s overvaluation of the Yuan, or the exchange
\ncontrols in countries like Venezuela and Iran, regimes of all types have
\nrelied on these kind of controls to rein, or at least try to rein,
\ncapital flights, inevitable when -sooner or later- markets try to
\ncorrect the excesses committed by money-hungry \u201crevolutions\u201d.<\/div>\n
\n\n\n\n\n
<\/td>\n<\/tr>\n
The Gosbank controlled the currency markets using what it came to be known as the \u201ccontrol by the ruble\u201d<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n
Sadly,
\ncitizens are usually the most affected by such currency controls: as a
\npseudo-monopoly is established, a black-market is instantly created and
\nexchange rates climb inexorably, specially in left-leaning regimes where
\nthe government aims for greater control of all aspects of the economy,
\naffecting the efficiency of the production system and pushing the
\ntrade-balance the wrong way, increasing in consequence the amount of
\nforeign currency required to cover internal demand. In short, more
\nexpensive currency is required to buy each time more stuff, the result?
\nRampant inflation and even more poverty.<\/div>\n
<\/div>\n
Basic
\nMarxist theory says that the structure of society must be based in
\nkeeping people in poverty, ruled by an upper class with certain rules,
\nnorms and such in order so they can keep people like that. This
\nold-proven-wrong-policy is still used by many governments today, in
\nFebruary 2014, for example, some education minister of a Latin American
\ncountry said that the government \u201cwasn\u2019t going to take people out of
\npoverty so they can become political opponents\u201d. This proves that
\ncurrency controls are not a consequence of failed economic policies, but
\ntools for the governments to exert repressing power over its citizens.<\/div>\n
<\/div>\n
Now,
\nwhat would happen to oppressive regimes if they were to lose control of
\nthe currency exchange, so the people is free to manage their wealth
\nbeyond the power of government currency controls? Currency
\ndecentralization is not new, 20th century economist and Nobel Prize
\nWinner, Friedrich August Von Hayek (F.A. Hayek), theorized extensively
\non this subject, and though polemic, his writings provided an important
\npart of the theoretical framework for modern economics, specially in
\nareas such as theory of money and economic fluctuations.In his book Theory of Liberty<\/i> he wrote:<\/div>\n
\n
\n

“The
\nexperience of the last fifty years has taught most people the
\nimportance of a stable monetary system. Compared with the preceding
\ncentury, this period has been one of great monetary disturbances.
\nGovernments have assumed a much more active part in controlling money,
\nand this has been as much a cause as a consequence of instability. It is
\nonly natural, therefore, that some people should feel it would be
\nbetter if governments were deprived of their control over monetary
\npolicy. Why, it is sometimes asked, should we not rely on the
\nspontaneous forces of the market to supply whatever is needed for a
\nsatisfactory medium of exchange as we do in most other respects?<\/p><\/blockquote>\n

It
\nis important to be clear at the outset that this is not only
\npolitically impracticable today but would probably be undesirable if it
\nwere possible. Perhaps, if governments had never interfered, a kind of
\nmonetary arrangement might have evolved which would not have required
\ndeliberate control; in particular, if men had not come extensively to
\nuse credit instruments as money or close substitutes for money, we might
\nhave been able to rely on a self-regulating mechanism. This choice,
\nhowever, is now closed to us. We know of no substantially different
\nalternatives to the credit institutions on which the organization of
\nmodern business has come largely to rely; and historical developments
\nhave created conditions in which the existence of these institutions
\nmakes necessary some degree of deliberate control of the interacting
\nmoney and credit systems (my emphasis). Moreover, other circumstances
\nwhich we certainly could not hope to change by merely altering our
\nmonetary arrangements make it, for the time being, inevitable that this
\ncontrol should be largely exercised by governments”<\/p><\/blockquote>\n<\/blockquote>\n\n\n\n\n
<\/td>\n<\/tr>\n
Governments
\nhave assumed a much more active part in controlling money, and this has
\nbeen as much a cause as a consequence of instability
\nF.A. Hayek<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
<\/div>\n<\/div>\n
But,
\nwhat if it was no longer inevitable? During the 20th century creating
\nand managing currencies was only possible for governments, so it was in
\nessence exclusively a political matter, but technology is changing that,
\nmoney issuing is not only government turf anymore, they now must
\ncompete with cryptocurrencies. In governments with an effective rule of
\nlaw, this can be fair competition, for example, currencies can be
\nsomehow regulated -as the IRS recently did in the US- and a legal
\nframework can be established so everyone can play by the rules. But,
\nthere are many countries where the line between state and nation is
\nblurred, these countries may also take two additional paths, they can
\nprevent financial institutions or businesses from transact with
\ncryptocurrencies (e.g. Colombia and China) or they can declare an
\noutright ban (as it is rumored about China every single day). In both
\nscenarios cryptocoins could have a very important role, in the former
\n-while remaining legal- they can create a new channel for the flow of
\nforeign currencies, in the latter they can work as a relief valve, as an
\nalternative for the black market. In any case, by increasing the supply
\nof foreign currency, these coins can effectively push prices down, with
\nall the benefits that comes with it.<\/div>\n
<\/div>\n
For
\nonce, the development model that could arise from an efficient
\ncryptocoins market presents a development plan that is not based on
\nplain charity, in giving away something with the hope that the recipient
\nwill make a good use of it and luckily return it back in future
\nproductivity. People cannot only mine their own coins but they can rest
\nassure that the value of such money will be subject to fair rules of
\nsupply and demand, not to devaluation-based political planning; and most
\nimportant, they may not be held hostage in poverty by exchange
\ncontrols, giving back to them a little of that sovereignty that
\ndictators keep claiming or themselves.<\/div>\n

Open your free digital wallet here<\/a> to store your cryptocurrencies in a safe place.<\/p>\n","protected":false},"excerpt":{"rendered":"

How cryptocurrencies can change the balance of power between dictators and citizens For many years currency exchange control has been a distinctive feature of dictatorships, from the \u201ccontrol by the ruble\u201d of the Soviet Gosbank, to the dual currency system in Cuba, China\u2019s overvaluation of the Yuan, or the exchange controls in countries like Venezuela […]<\/p>\n","protected":false},"author":1,"featured_media":697,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,37,191,679],"tags":[704,871,1332],"yoast_head":"\nCryptocoins for good: Cryptocurrencies Empowering Citizens Against Oppressive Governments -<\/title>\n<meta name=\"description\" content=\"Discover how cryptocurrencies can change the power balance between dictators and citizens.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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