A Balanced Case for Bitcoin’s Role Amid Financial Censorship and Economic Injustice
In a world rife with passionate debate over Bitcoin, “Resistance Money: A Philosophical Case for Bitcoin” takes a refreshingly balanced stance, examining both the risks and potential of the digital currency. In their thought-provoking work, authors Andrew M. Bailey, Bradley Rettler, and Craig Warmke make the case that, despite Bitcoin’s drawbacks, society may ultimately be better off with Bitcoin than without it.
The book opens with common criticisms: “Bitcoin is for criminals. It’s a tool for terrorists, drug dealers, and hackers, and a plaything for degenerate speculators.” The authors don’t hold back from addressing these sentiments. “Compared to physical cash, Bitcoin enables some wrongdoing more easily over longer distances,” they concede. However, they argue that Bitcoin’s flaws do not outweigh its contributions.
Bailey, an associate professor at Yale-NUS College, along with Rettler from the University of Wyoming and Warmke from Northern Illinois University, take issue with the notion that Bitcoin’s association with crime discredits it as a currency. Rather than dismissing Bitcoin entirely, they highlight the role it can play in resisting financial censorship. They point out that financial exclusion isn’t limited to authoritarian regimes. “Operation Checkpoint,” a 2013 initiative led by the U.S. Department of Justice, saw banks pressured into deplatforming businesses like pawnshops and payday lenders, despite their activities being fully legal.
In 2022, U.S. civil rights groups including the American Civil Liberties Union and the Freedom of the Press Foundation called on PayPal to revise a policy allowing the company to seize up to $2,500 from users for alleged misinformation. The authors contend that Bitcoin, while not censorship-proof, offers a level of censorship resistance that can provide security to people otherwise at risk of financial suppression.
Beyond issues of censorship, Bailey, Rettler, and Warmke address Bitcoin’s potential to aid the billions of unbanked individuals globally. Unlike traditional financial institutions, Bitcoin imposes no minimum balance requirements, no fees for opening an account, and no credit checks. The only tools needed are a smartphone or computer. “Eighty-five per cent of Americans currently own smartphones,” the authors note, up from 39 percent a decade ago.
The authors tackle Bitcoin’s volatility, energy consumption, and criticisms of its divisibility, noting the 100-million-satoshi structure that allows even those with minimal funds to participate. Bitcoin skeptics have long highlighted these as inherent flaws, with some fearing an “energy apocalypse” due to its mining needs. Yet, Bailey, Rettler, and Warmke dispel such fears, arguing that while Bitcoin mining is energy-intensive, it is far from consuming “all of the world’s energy” as once predicted.
Additionally, the authors address concerns that Bitcoin is disproportionately owned, with about 7.9 billion people worldwide holding none. Critics argue this centralization contradicts Bitcoin’s aim of decentralization. Yet, the authors see Bitcoin miners, who process transactions, as necessary mediators rather than gatekeepers.
While “Resistance Money” delves deeply into Bitcoin’s technicalities, potentially overwhelming readers unversed in the cryptocurrency’s finer details, the authors’ insights are enlightening. Those unfamiliar with the mechanics behind Bitcoin may find discussions on topics like failed predecessors of Bitcoin less engaging, but the authors argue these provide context to Bitcoin’s evolution and function.
Errors in the text, such as referring to the “Great Recession of 2007-2009” when official records place its start in 2008, are minor distractions. Ultimately, “Resistance Money” provides a comprehensive, balanced, and thoughtful discourse on Bitcoin that stands out amid the often one-sided debate surrounding cryptocurrency. As Bitcoin remains an option that investment advisers must consider for clients, the authors’ well-reasoned perspective provides invaluable insight.
