Bitcoin and Authoritarian Governments

Bitcoin’s relationship with authoritarian governments is more complicated than the freedom narrative usually admits.

On one side: Bitcoin has helped dissidents, activists, journalists, and ordinary citizens move money beyond the reach of governments that would have stopped them. Belarus, Afghanistan, Iran — the stories from last week are real.

On the other side: authoritarian governments have also found ways to use Bitcoin.

Iran legalised Bitcoin mining specifically because it provides a way to earn internationally transferable value despite sanctions. The same property that makes Bitcoin useful for dissidents — it doesn’t care who holds it — makes it useful for governments evading international financial pressure.

North Korea’s state-sponsored hacking groups have stolen billions in Bitcoin from exchanges and DeFi protocols — using the proceeds to fund weapons programs that sanctions were meant to prevent.

Russia has explored using Bitcoin to settle trade in currencies other than the dollar, reducing exposure to Western financial infrastructure.

Bitcoin doesn’t discriminate. It doesn’t check whether you’re a human rights lawyer or a government sanctions-evader. The same protocol serves both.

This is uncomfortable but it’s important to sit with honestly. Bitcoin is a tool. Tools don’t have politics. A hammer builds houses and breaks windows. Bitcoin moves value without asking why.

The case for Bitcoin doesn’t rest on it being used exclusively by good actors. It rests on the same argument for free speech and open internet: the value of a system that works for everyone, including people whose causes you oppose, is worth the cost of it also working for people whose causes you oppose.

That’s a harder argument than “Bitcoin helps dissidents.” It’s also a more honest one.

Tomorrow: the separation of money and state — where we actually are.

— The Daily Bit