When Satoshi Nakamoto released the Bitcoin white paper on this day in 2008, they proposed a novel system for a global digital form of money. The leaderless, nonpartisan network of Bitcoin nodes now maintains a truly borderless and permissionless monetary system.
Since the very first Bitcoin block was created in the wake of the 2008 global financial crisis, the Bitcoin protocol has revolutionized the very concept of money. With Bitcoin, it isn’t up to a small cabal of politicians and bureaucrats to decide how much money circulates, or who gets access to the monetary system.
To understand the importance of the white paper, let’s explore some situations where decentralized currencies have proven their worth. Earlier this year at Bitcoin 2022, activist Yeonmi Park pulled up a satellite image of her home country, North Korea. The photo showed two swathes of light surrounding an island of darkness.
“You see that there’s a black hole between South Korea and China?” she said. “That’s where I was born; I was born in complete darkness.”
Yeonmi, a North Korean defector whose family fled to China in 2007, was part of a panel discussion moderated by Human Rights Foundation’s chief strategy officer Alex Gladstein. She shared the stage with other activists as they discussed Bitcoin’s ability to provide financial freedom to people living under authoritarian rule.
During the panel discussion, Yeonmi recounted a time when the bank restricted access to her bank account, locking away her family’s life savings in the process. Yoenmi and her family turned to hiding the little cash they had in their own home. She explained that her family’s savings weren’t safe even when the cash was kept hidden away in pots and under floorboards. They were, in fact, afraid to hold and save cash.
To Yeonmi and her family, fiat currency had always been a means for the North Korean government to exercise control over its people.
Could Bitcoin be the answer?
The oppression Yoenmi and her family faced in North Korea isn’t uncommon and the fight for the right to access financial services continues to be an uphill battle for many disenfranchised communities around the world.
In 2017, Economists Hanan Morsy and Hoda Youssef set out to investigate the inner workings of financial inclusion (and exclusion) vis-a-vis gender. Their seminal paper, Access to Finance – Mind the Gender Gap took a closer look at the underlying factors that disproportionately prevented women from accessing financial services and participating in financial markets.
Their findings suggested gender bias in financial services existed in 79% of the 141 countries studied. They went on to explain that women’s access to finance seemed to be directly correlated to the strength of the legal rights bestowed on them by their governments. Some countries still require women to obtain their spouse’s permission to open a bank account.
Bitcoin and other cryptocurrencies offer an alternative. The technology Satoshi created nearly a decade and a half ago has upended the status quo and given many of those who felt their lives were hopeless a new hope.
And it’s working.
The struggle continues
As the inability to participate in the monetary system continues to plague a large portion of the world today, Bitcoin is becoming an increasingly attractive option for those hoping to take back control of their wealth and free themselves from the existing financial system.
In June this year, The United Nations Conference on Trade and Development (UNCTAD) published Policy Brief No. 100 outlining their recommendations for cryptocurrency regulation. In the report titled, “All that glitters is not gold: The high cost of leaving cryptocurrencies unregulated,” the UNCTAD stated that developing countries made up 15 of the 20 economies with the highest share of the population that owns cryptocurrencies.
The UNCTAD, which was established by the United Nations General Assembly in 1964 to promote the interests of developing nations in world trade, explained why individuals from these countries found cryptocurrency so useful:
“First, the use of cryptocurrencies was an attractive channel, in terms of price and speed, through which to send remittances. During the pandemic, the already high costs of traditional remittance services rose even higher during lockdown periods due to related disruptions.
Second, cryptocurrencies, as part of financial investments and speculation, are mainly held by middle-income individuals in developing countries and, particularly in countries facing currency depreciation and rising inflation (triggered or accentuated by the COVID-19 crisis), cryptocurrencies have been perceived as a way to protect household savings.”
Despite acknowledging the ways Bitcoin and other cryptocurrencies were improving the lives of people in developing nations, the policy brief reported that they undermined capital controls. UNCTAD then recommended extreme measures that would ultimately deter individuals from using the tools that could improve their ability to trade internationally and protect themselves from currency depreciation. Their recommendations included banning crypto exchanges from advertising in public spaces and barring regulated financial institutions from offering crypto-related products to clients. Fortunately, crypto’s decentralized core helps it route around this damage if and when the need arises.
Spearheading global adoption
Since our inception, Kraken has remained committed to driving crypto adoption and empowering the individual. We believe that everyone should have the means to protect their money from government overreach and transact globally with ease. Bitcoin is already making it happen for millions around the world.
As we celebrate Bitcoin White Paper Day, we’re also acutely aware that billions of people continue to struggle to access financial services today. Never in history has a tool like Bitcoin been more vital.
These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell or hold any cryptoasset or to engage in any specific trading strategy. Some crypto products and markets are unregulated, and you may not be protected by government compensation and/or regulatory protection schemes. The unpredictable nature of the cryptoasset markets can lead to loss of funds. Tax may be payable on any return and/or on any increase in the value of your cryptoassets and you should seek independent advice on your taxation position.