The Libertarian Case for Bitcoin

From the outside looking in, Bitcoin seems to have a cult-like following of technologists who believe the cryptocurrency is going to displace many of the old world companies currently in place. However, as you get to understand crypto a little better, it becomes clear that there are many different factions all acting under the same umbrella.

There are the technologists who think technology is king, there contrarians who believe that the US dollar and all fiat currencies are overvalued, and then there are the libertarians who want to have as much freedom from the government as possible.

What is Libertarianism

At its core, libertarianism is a political philosophy that gives individuals rights to acquire, keep, and exchange their holdings. It is a very “American” point-of-view, and has gained a lot of support in recent times, due to the rising fiscal deficit, among other things.

It is important that we separate libertarianism from anarchism, which is more much along the lines of an armed revolution or something of the sort. To libertarians, the ideal is to have minimum intervention from the state.

This also involves locking middlemen and intermediaries out of the equation. Oligopolies such as the one the big banks currently hold end up giving them a “government-level” of control over the funds of customers. Bitcoin disintermediates these banks and creates a natural market for all who wish to do commerce online.

An auxiliary point would be the somewhat excessive intervention in the money markets by the Fed. Denationalization of currency is a position most libertarians take as another way of protecting their money from purposeful inflation.

Bitcoin Is the Natural Fit

What is especially beautiful about Bitcoin is the fact that it is censorship resistant. Not only is there economic freedom, but also the ability to fund whatever you would like, but without worrying about being stopped. This is true “freedom of expression” (another libertarian ideal). Obviously there are cases where this goes too far (e.g. terrorism) and this is where the debate about Bitcoin’s place in society heats up.

Bitcoin also goes in direct conflict with the government’s desire to track the flow of money for taxation and regulatory purposes. It is very difficult for governments to track the flow of Bitcoin funds, and even though it’s possible to match up public addresses, anonymity is generally ensured. And for those looking for a more robust solution, other privacy coins like zCash and Monero have popped up.

Aside from Bitcoin, you have numerous new “markets” popping up where there used to be inefficient markets with minimal innovation. Utility coins are putting a value on what used to be deadweight loss in the markets. This connects to Bitcoin with the idea of “economic liberty”, where they have property rights and fully privatized free markets.

The Big Picture

Whether you are for the libertarian ideal or not, the important part is to realize that all these different factions have played a strong part in the development of Bitcoin. Without zealous followers, the coin would have disappeared into the ether a long time ago. It takes a strong community to set an innovation apart (such as Apple, Tesla, etc.) and these diehard fans have helped foment a large change in the markets.

Featured image courtesy of Shutterstock.

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