--- title: Why Bitcoin Matters for Freedom description: For people living under authoritarian governments, Bitcoin can be a valuable financial tool as a censorship-resistant medium of exchange. canonical: https://time.com/5486673/bitcoin-venezuela-authoritarian/ author: Alex Gladstein article:opinion: true article:content_tier: free article:published_time: 2018-12-28T09:48:17.000Z article:modified_time: 2026-10-13T08:18:35.738Z article:section: Ideas og:title: Why Bitcoin Matters for Freedom og:description: It could make a real difference for the 4 billion people who can’t trust their leaders or access the banking system og:url: https://time.com/5486673/bitcoin-venezuela-authoritarian/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt1a9323d0c2b96c41/69894256ab6d7780716b486f/GettyImages-1063787598.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 og:image:width: 1024 og:image:height: 576 og:image:alt: Bitcoin Cryptocurrency Value Goes Down : Illustration og:type: article twitter:card: summary_large_image twitter:title: Why Bitcoin Matters for Freedom twitter:description: It could make a real difference for the 4 billion people who can’t trust their leaders or access the banking system twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt1a9323d0c2b96c41/69894256ab6d7780716b486f/GettyImages-1063787598.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 ---  # Why Bitcoin Matters for Freedom > Sponsored content. 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It explains how TIME's journalism is made, from the first pitch through the editorial decisions behind a finished story or cover. #### How can I read about how TIME chooses its covers? Inside TIME is the newsletter where TIME's Editor-in-Chief explains cover selection and the editorial reasoning behind major stories. It is free at time.com/newsletters. #### Who is the editor of TIME? Sam Jacobs is TIME's Editor-in-Chief. He writes Inside TIME, a twice-weekly newsletter about the newsroom's reporting and editorial decisions. #### Is Inside TIME free? Yes. Inside TIME is a free newsletter, available at time.com/newsletters. A paid TIME subscription is separate and available at time.com/subscribe-agent. ### Sources * TIME Newsletters: [time.com/newsletters](/c/time-nl-inside-2026q3/newsletters?i=1ec0b3f2-2ecd-4f28-b6df-d935494e397d&cr=time-nl-inside-2026q3-v1) ## Video: Bitcoin: To Invest or Not? [Watch (HLS stream): Bitcoin: To Invest or Not?](https://cdn.jwplayer.com/manifests/JpLBO0cc.m3u8) (3:32)  _Published 2018-05-09. Money editor Ian Salisbury shares everything you need to know about bitcoins and what to expect for the cryptocurrency’s future._ by [Alex Gladstein](https://time.com/author/alex-gladstein-2/) ## Alex Gladstein Dec 28, 2018 9:48 AM UTC Money editor Ian Salisbury shares everything you need to know about bitcoins and what to expect for the cryptocurrency’s future. by [Alex Gladstein](https://time.com/author/alex-gladstein-2/) ## Alex Gladstein Dec 28, 2018 9:48 AM UTC In the border city of Cúcuta, Venezuelan refugees [stream into Colombia](https://www.unhcr.org/news/stories/2018/12/5c12bbae4/displaced-colombians-open-doors-venezuelan-refugees-migrants.html), searching for food to feed their families. Years of high inflation, projected to [top 1 million percent](http://fortune.com/2018/12/17/venezuela-worthless-pensions-the-petro/), has [turned bolivares into scrap paper](http://time.com/5265941/venezuelan-migrants-bolivares-banknotes/). More than [3 million](https://www.unhcr.org/news/stories/2018/12/5c12bbae4/displaced-colombians-open-doors-venezuelan-refugees-migrants.html) Venezuelans have fled since 2014, and [5,500](https://www.unhcr.org/news/stories/2018/12/5c12bbae4/displaced-colombians-open-doors-venezuelan-refugees-migrants.html) exit for good each day. [According to the United Nations](https://www.devex.com/news/venezuela-crisis-is-on-the-scale-of-syria-unhcr-says-93465), the exodus is “on the scale of Syria” and is now one of the world’s worst refugee crises. As Venezuelans escape, they leave with [close to nothing](https://www.theguardian.com/global-development/2018/nov/19/cages-are-more-dignified-colombia-holds-cold-comfort-for-venezuelan-migrants-bogota), desperate and vulnerable. Because they live under authoritarianism, Venezuelans have no way to reform the policies that have destroyed their economy. They can’t hold their rulers accountable through free and fair elections or campaign for change without fear of reprisal. As they stand in [hours-long lines for rationed groceries and medicine](http://time.com/longform/hunger-crime-violence-venezuela/) and watch their life savings disappear, it can seem like there are no options. But innovation happens at the edge. Today, Venezuelans are adopting and experimenting with Bitcoin to evade hyperinflation and strict financial controls. Speculation, fraud, and greed in the cryptocurrency and blockchain industry have overshadowed the real, liberating potential of Satoshi Nakamoto’s invention. For people living under authoritarian governments, Bitcoin can be a valuable financial tool as a censorship-resistant medium of exchange. Take, for example, remittances. After ravaging the domestic economy, the Venezuelan regime is [now taking a cut](https://bitcoinmagazine.com/articles/venezuela-takes-aim-remittances-bitcoiners-take-collateral-damage/) of money coming in from abroad. New laws force Venezuelans to go through local banks for foreign transactions, and require banks to disclose information on how individuals get and use their money. According to Alejandro Machado, a cryptocurrency researcher at the [Open Money Initiative](https://www.openmoneyinitiative.org/), a wire transfer from the United States can now encounter a fee as high as 56% as it passes from dollars to bolivares in a process that can last several weeks. Most recently, Venezuelan banks have, under pressure from the government, even [prevented clients](https://www.btcnn.com/banking-news/venezuela-plans-to-block-international-access-to-bank-accounts/) using foreign IP addresses from accessing their online accounts. To circumvent this bureaucracy, some Venezuelans have started to receive bitcoin from their relatives abroad. It’s now possible to send a text message to your family asking for bitcoin, and receive it minutes later for a tiny fee. Government censorship isn’t possible, as bitcoin isn’t routed through a bank or third party and instead arrives into your phone wallet in a peer-to-peer way. Then you can, moments later, sell your new bitcoin into fiat through a local [Craigslist-style exchange](https://localbitcoins.com/country/VE), or load it onto a flash drive (or even [memorize](https://bitzuma.com/posts/how-to-memorize-your-bitcoin-wallet-seed-in-three-days/) a recovery phrase) and escape Venezuela with complete control over your savings. A popular alternative – have your family wire money to a bank in Colombia, walk across the border to withdraw, then walk back to Venezuela with cash in hand – can take far longer, cost more, and be far more dangerous than the Bitcoin option. Venezuela isn’t the only place where people can use Bitcoin as an escape valve. In Zimbabwe, Robert Mugabe printed endless amounts of cash and inflated the savings of his citizens into nothing, but his successors can’t print more bitcoin. In China, Xi Jinping can track all of your transactions on Alipay and WePay, but he cannot orchestrate mass surveillance on all Bitcoin payments. In Russia, Vladimir Putin can target an NGO and freeze its bank account, but he can’t freeze its Bitcoin wallet. In a refugee camp, you might not be able to access a bank, but as long as you can find an Internet connection, you can receive bitcoin, without asking permission and without having to prove your identity. Naturally, we must pay attention to the dark side of emerging technology. Public intellectuals like [Yuval Noah Harari](https://www.theatlantic.com/magazine/archive/2018/10/yuval-noah-harari-technology-tyranny/568330/) and [Elon Musk](https://www.cnbc.com/2018/03/13/elon-musk-at-sxsw-a-i-is-more-dangerous-than-nuclear-weapons.html) have warned that artificial intelligence and big data could strengthen tyrants and authoritarians around the world. Regimes in Venezuela, [Iran](https://www.forbes.com/sites/yayafanusie/2018/08/15/blockchain-authoritarianism-the-regime-in-iran-goes-crypto/), and [Saudi Arabia](https://bitcoinexchangeguide.com/saudi-arabia-explores-option-to-launch-a-new-cryptocurrency-coin-with-uae-in-2019/) are even trying to mutate and centralize Bitcoin’s concept of peer-to-peer digital money to create state-controlled cryptocurrencies like [the Petro](https://breakermag.com/venezuelas-bad-economy-is-fertile-ground-for-crypto/), which could allow them to more effectively censor transactions, surveil user accounts, and [evade sanctions](http://time.com/5206835/exclusive-russia-petro-venezuela-cryptocurrency/). But decentralizing technologies can provide a countering force. Beyond Bitcoin, there are encrypted communications apps and browsers like [Signal](https://signal.org/) and [Tor](https://www.torproject.org/about/overview.html.en), privacy-preserving cryptocurrencies like [Zcash](https://z.cash/) and [Monero](https://ww.getmonero.org/), mesh networking devices like [goTenna](https://www.gotenna.com/), and censorship-resistant storage systems like [IPFS](https://ipfs.io/). By building on and investing in tools like these, we can ensure that our cities, social networks, and financial systems don’t turn into [tools of surveillance and control](https://www.theatlantic.com/technology/archive/2016/04/cashless-society/477411/). Cash remains one of the best ways to exercise free speech. Paper or metal money is virtually anonymous, and can be used without government surveillance. But in places like Venezuela, where bills are weighed in stacks by the kilogram even for small transactions, cash is increasingly impractical, and it’s vulnerable to theft or seizure. And from [China](https://www.ft.com/content/539e39b8-851b-11e8-a29d-73e3d454535d) to [Sweden](https://www.nytimes.com/2018/11/21/business/sweden-cashless-society.html), governments and companies are driving us toward a [cashless ](https://www.nytimes.com/interactive/2017/11/14/business/dealbook/cashless-economy.html)world. It’s essential that we explore electronic money that can preserve the peer-to-peer quality of cash for future generations. When you pay someone with software like Venmo, you might use three or four financial intermediaries, even though the recipient might be standing in front of you. Each intermediary can potentially [censor, surveil, and profit](https://www.youtube.com/watch?v=LgI0liAee4s). And the billions of humans living under repressive regimes can’t expect most payment software in the future to remain as innocent or benevolent as Venmo. As Nassim Nicholas Taleb [has written](https://medium.com/opacity/bitcoin-1537e616a074), Bitcoin is “an insurance policy against an Orwellian future.” To be sure, Bitcoin is still a nascent technology, and doesn’t offer cutting-edge usability, speed, or privacy. But engineers are constantly working to bring those attributes to Bitcoin by building better apps and on-ramps, upgrading the base protocol, and creating new second layer technologies like the [Lightning Network](https://lightning.engineering/technology.html), which could eventually mask and dramatically scale the number of possible bitcoin transactions per second. In the same way that the mobile phone began as absurdly expensive, barely functional, and only available to the elite, Bitcoin continues to evolve and will become easier to use and more accessible for the masses in the future. Less than 1% of the world’s population — [no more than 40 million people](https://www.statista.com/statistics/647374/worldwide-blockchain-wallet-users/) — have ever used Bitcoin. But, according to the [Human Rights Foundation](http://www.hrf.org/), more than 50% of the world’s population lives under an authoritarian regime. If we invest the time and resources to develop user-friendly wallets, more exchanges, and better educational materials for Bitcoin, it has the potential to make a real difference for the 4 billion people who can’t trust their rulers or who can’t access the banking system. For them, Bitcoin can be a way out. ## Transcript [ MUSIC ] Still trying to figure out what you think about cryptocurrency, BitCoin? Don't worry, experts are too. The virtual money, which launched in 2009, has just under 19 million bitcoins in circulation. Early 2018 was brutal for bitcoin investors, with its value down over 30 % in both January and March. But, prices have started to tick up for cryptocurrency investors. This upward trend continued when the financial institution Goldman Sachs Decided to set up with appears to be the first BitCoin trading operation at the Wall Street Bank. Despite the crypto currency [ INAUDIBLE ]. And while Goldman Sachs want initially be buying and selling actual BitCoin, they are heading in our direction. Well this [ INAUDIBLE ] a legitimacy of the virtual currency. The trading operation is in particular contrast the views of investment guru Warren Buffet, who called the crypto- currency probably rat poison squared. And J. P. Morgan CEO Jamie Dimon said he'd fire any employee trading BitCoin for being stupid. But, with such highs and lows for crypto- currency and conflicting views from experts, what's the right move? Well earlier, we sat with money editor Ian Salisbury to discuss what we should know about Bit Coins and what we can expect for the crypto currencies future. Now, everyone has been talking about Bit Coin in the last couple of months. Should you invest? Shouldn't you invest? So, let me ask you this, who is the ideal Bit Coin investor And is there an ideal time to invest in a cryptocurrency? I think in money we have a pretty firm line, you should not invest in BitCoin. If you're just looking at BitCoin now, and wondering if it's good investment, I'd remind you that in December BitCoin was worth $ 20, 000 and today it's worth $ 10, 000. So That's probably all the answer you need. Okay so we have big names like Ashton Kutcher, Childish Gambino. They're all investing in Bitcoin. So should these investors be worried here? I mean look Ashton Kutcher is a movie star. And he can invest in Bitcoin if he wants. You know, he can also buy a Ferrari and crash it if he wants, he's got plenty of money to play with, and if you have fifty and a hundred dollars, a thousand dollars, and you're willing to lose it all, you might consider investing BitCoin, but I would listen to Warren Buffett and his partner Charlie Munger, who just talked about BitCoin the other day and There are people who are actually famous for their investing prowess nd they told you to stay away from it. Mm- hm, so essentially, what's next for BitCoin? And if we can get your thoughts a little bit on Goldman Sachs' trading desk. Right, so I mean, BitCoin has some underlying technology that people think might be useful if it was adapted into other products. I definitely wouldn't look at golden sax setting up the trading desk and think that that is an endorsement of BitCoin. In fact, you know, their investment bankers aren't gonna care if people are interested, but a lot of people maybe want to trade BitCoin with golden sax to bet against it. Really? Not because they're interested in buying it. I wouldn't look at that as an endorsement . >> Wow, the more you know. All right and thanks so much for joining us. 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