Cryptocurrencies are easiest to adopt in representative countries. However, the greatest need and greatest adoption of cryptocurrencies like Bitcoin takes place in countries with repressive governments.

The Human Rights Foundation’s Alex Gladstein recently explained the use of cryptocurrency to free society on the libertarian podcast reason. He focused on cryptocurrency use cases in China, India, Venezuela, Iran, and, potentially, the United States.

Why Bitcoin?

[Bitcoin] is permissionless, meaning you do not need an ID or permission from a government or any sort of corporate entity to use the system. It is censorship-resistant, meaning that payment processing is decentralised so no one entity like a Visa or a bank or a PayPal or a WeChat or a Venmo can pick out a transaction and prevent it from going through, Gladstein began. …It’s been something that people in broken economies and repressive societies have started to use as a way to escape.

Most of what we read about cryptocurrencies comes from wealthy countries with stable economies. In economies like the UK, Australia, the United States, and Europe, cryptocurrencies are a volatile speculative asset. Its anonymous nature makes it edgy and exciting for people who have nothing to fear.

However, in much of the world, governments watch and control their populations through their money. In much of the world, cryptocurrencies are far more stable than the local fiat.

Gladstein believes that a cashless society is a surveillance society. Money is how you control people. He explains that if you want to shut someone down, you shut their bank account. Guess what, you can’t turn off someone’s Bitcoin account.

Bitcoin in China and India

One of the most accessible examples of this is China, where most people live most of their lives through WeChat. People once pointed to the app as a case study for the effectiveness of digital currency.

It’s this very advanced app that has more than one billion users per day where the average user spends hours on it, explained Gladstein. The moment they wake up to the moment they go to bed, they’re using WeChat.

Bitcoin has been something that people in broken economies and repressive societies have started to use as a way to escape.

The platform does things like handling calls and messages, web browsing, and – perhaps most importantly – managing money. The company that owns the platform works very closely with the Chinese government.

WeChat, essentially, is able to microtrack your life and municipal governments, federal governments, and companies that work for the government, are starting to provide carrots-and-sticks for people to be very loyal to the government and if they step out of the line they get punished, both financially and in other aspects of their lives, said Gladstein.

The Chinese government views cryptocurrencies as property but prevents people from using them as currency. Cryptocurrencies serve as a way to store wealth in ways that are less likely for the government to notice.

Both the government officials and the people are starting to use [Bitcoin] to do things like, obviously over time, get their wealth out of China, said Gladstein. Through cross-border payments, remittances, things where they want a little more control and privacy over their payments.

A similar case is playing out in India where Bitcoin is actually illegal. The government, instead, promotes the use of digital payments but through a single central bank. They say that this is to provide optimal services but it would also make mass surveillance easier.

Bitcoin in Iran and Venezuela

Cryptocurrencies aren’t only useful for avoiding government surveillance. They’re also useful for avoiding government control.

Iran’s currency has been hyperinflating as the government tries to pay for its war with Syria. Then, the United States placed crippling sanctions on the country. The result is that Iran’s currency is plummeting in value and citizens have very limited access to more stable currencies. That’s where cryptocurrency comes in.

This is the use case right now. It’s people who cannot otherwise interact with the global financial system, said Gladstetin. …A lot of people use Bitcoin right now as not a short-term or even a long-term store of value but more as a bridge between two monies. They live in a country where it’s really hard to send money to another country so they do the money transfer with Bitcoin.

A similar scenario is playing out in Venezuela. Hyperinflation makes their currency, the bolivar, less valuable by the minute. Iran had attempted to outlaw cryptocurrency by targeting miners until recently. Venezuela, however, has a less stable government. As a result, they don’t have the time or resources to hunt cryptocurrency miners or users.

You can see the appeal for someone like us sitting in New York, we can send them Bitcoin in a matter of minutes, said Gladstein. …They post the Bitcoin that we just sent them for sale on an eBay or a Craigslist-type website and people buy it from them and they get the bolivars in their account and they go spend it right away, because if you hold onto your bolivars they disappear.

Cryptocurrencies aren’t just helpful for the everyday citizen. They also have a potential to help people like journalists in repressive countries. Even international correspondents have the risk of having their assets frozen or their money confiscated.

Bitcoin and “Surveillance Capitalism”

Countries in places like Western Europe and North America aren’t dealing with repressive, authoritarian governments. That doesn’t mean that people living in these countries don’t have privacy concerns.

Virtually all of our lives can be tracked through digital purchases. Online retailers, financial service providers, and others keep and share records of our digital lives.

All of these people who work for banks and financial entities, they believe they’re doing a good thing by trying to harvest as much data as possible about you to fight the boogieman of drug dealers and terrorists, said Gladstein.

We need to work hard and fight hard to protect financial privacy and Bitcoin gives us a pretty good tool to do that.

However, they don’t just sit on this information once they’ve collected it. Our data is valuable. That’s why groups like online retailers and even credit card companies sell it. They sell it to service providers and retailers who use it to target advertising.

It has created a growing market often referred to as “surveillance capitalism”. Cryptocurrencies are much harder to trace than credit card transactions. However, they are possible to trace.

The traditional way that governments try to track Bitcoin is something called chain analysis, said Gladstein. They’ll look at the blockchain and try to use detective work to try to figure out which pseudonymous wallet address is linked to which real-world identities. This is broken by the lightning network.

The lightning network is being developed to allow more transactions per second. Gladstein likens it to a bar tab. You can have a group of friends on one tab. Together, you might order thirty drinks but they’re all ordered on the same transaction. Even if prying eyes could determine what was ordered, they couldn’t tell who ordered what.

We need to work hard and fight hard to protect financial privacy and Bitcoin gives us a pretty good tool to do that, said Gladstein.