The 72%, Global South, and the Curious Case for Bitcoin

Bitcoin is commonly discussed as an “elite” and/or “hobbyist” interest, with participation only in the global 1%. I think Bitcoin is much more interesting in the global South.

If you are an American, or live in a top developed country: delayed settlement is not a real problem and centralized systems work pretty darn well and our access to top-tier fiat currencies and stock exchanges is good. You pay a friend $20 on Venmo, and you both consider that equivalent to handing them a $20 because you both know that ledger entry on that venmo account can turn into a $20 bill and that the purchasing power of that $20 bill will be roughly the same as before.

But for 72 percent of the world's population, 5.7 billion people, live under authoritarian rule where your bank account is not safe, if you even have access to one. You cannot invest in foreign stocks or real estate. You have to safe in the local currency (or empty houses), which the government can and has devalued by half overnight, for example, Egypt and note that this is the official rate not the true market rate.

So what central institutions do Argentineans, Egyptians, Venezuelans turn to? Their government isn't going to off them escapes to their garbage fiats, but people want to save. The black market for USD is huge because that represents something of savings and stability, and its all physical cash because none of the local banks will bank in dollars. What if you could go above the control of authoritative governments with a cell phone or laptop? That's where Bitcoin and stablecoins come in.

You have two things: final settlement possible by digital means & internet everywhere via Starlink or other satellite internet. These are the keys to empowering people in the plundered periphery. The US/West have their own debt issues building, but the same tech that empowers the billions under authoritative rule will empower citizens of democracies to check the power of their own institutions.

The US wouldn't make a digital dollar that can be a true bearer asset like physical USD, at least for international use, that would prevent any sanctions enforcement use. And once you have those controls, you're back to step 1: do these institutes fails? Will auth govs ban access? Can saving be seized with a keystoke?

Similarly, some other examples form the Global South include:

You live in Donetsk and you just got word the Russians have invaded. How much wealth can you put in the trunk of your car? How safe do you forecast Ukrainian banks to be? How much wealth can you store in bitcoin? How safe do you think bitcoin will be?

You are a desperately poor laborer in South America who, by tapping all friends and relatives, has scraped up some money for the arduous journey north to America to work illegally. Along the way you pass through many countries each with their own currency and many choke points for robbery and theft. How tempting does bitcoin look?

You now make it to America and want to send money home, your brother wants to also make the voyage. What currency is easiest to send him?

You are the finance minister of Atropia, a tiny poor landlocked country with no standing in the world. The Atropiata, the unit of currency, is locally a joke with neighboring countries demanding currency conversion at the border to even participate in neighboring economies. Your hip Junior Minister, who’s just come back from getting a graduate degree in The West, suggest dropping the currency altogether and going with bitcoin. How reasonable is that?