The best use case for Bitcoin: as an anti-corruption tool

The best use case for Bitcoin: as an anti-corruption tool

It is easy to overlook a best use case for Bitcoin: a form of opposition to corrupt bank behavior.

This is simply the cost of doing business in the banking industry: white-collar criminals usually take huge profits after paying a small amount of legal penalties – a good profit-to-cost ratio for long-term success. This is true for banks around the world. It can be said that this is a global phenomenon.

On the other hand, Bitcoin is an alternative global phenomenon that operates outside the banking sector. Think of it as a "meshless" currency system that is not under the control of anyone.

This raises the question: If Bitcoin is popularized around the world – not because its value grows, it attracts more speculation and interest – but as a tool to protest corruption, what happens? ?

Before delving into the potential effectiveness of this tool, consider the crimes that have been captured by the following major banks and their subsequent penalties:

Wells Fargo was fined $1 billion for “abuse of insurance and mortgages,” after the bank charged more than 500,000 customers for auto insurance they didn’t need. The bank also charged mortgage customers an extra fee because they missed the deadline for interest rate lock-in. In addition, the bank was found to have fraudulently created approximately 3.5 million fake customer accounts, charging for unexpected and unnecessary expenses.

Now, $1 billion sounds like a lot of money, and it is true for most people. But this is only a small part of Wells Fargo’s $2 trillion in assets.

When it comes to criminal behavior, HSBC's most famous may be its willingness to participate in money laundering activities, allowing Nigerian corrupt leaders to launder more than $100 million. The bank also laundered millions of dollars for drug trafficking groups and terrorist organizations. The penalty for this criminal act is only equivalent to a five-week profit in the company's annual profit.

From the role of JP Morgan in the Madoff stock and securities Ponzi scheme, to the large-scale bank fraud that caused the entire US economy to be in trouble in 2008, almost no bank corruption case is more detailed than JP Morgan’s record. . No banker was jailed for financial crimes, and it was these financial crimes that led to the financial crisis.

Bank of America is one of the most notorious villains. It exploits “investors, insurance companies, depositors, homeowners, shareholders, pensioners and taxpayers” and uses thousands of Americans to bring false evidence to court. Selling worthless mortgages to pension funds and defrauding insurance companies. The bank was rescued by US taxpayers because it was "too big to fail."

The list goes on. Citigroup, Goldman Sachs and many other banks have been fined again and again for corruption and malfeasance. Despite this, these banks are still profitable because billions of dollars in fines are just a minor problem.

How does Bitcoin work?

In a typical forecasting case, the banking giant will tell you that bitcoin is nothing more than a tool for criminals and terrorists. It is clear that banks are the most effective tool for this type of behavior. In fact, Bitcoin works just the opposite.

The blockchain has many positive utilities that move from value to unalterable storage of data. But with the recent market excitement, it is easy to overlook one of Bitcoin's most expensive features: the ability to act as a form of anti-corruption protest.

The rise in the value of Bitcoin is a side effect of the hard assets that people choose to store their wealth outside of the banking system. Because of its decentralization, transactions and values ​​can be verified without any central authority.

Regardless of whether a trader intends to hold Bitcoin, having Bitcoin is a vote for fiat money and another trading system. With only a small amount of money exiting the fiat, the holder of the asset can let himself at least partially exit the cycle.

Of course, the money used to buy Bitcoin will not evaporate easily. However, it makes the depreciation of the currency in the hands of those who want to diversify the economy fall into the hands of those who prefer the traditional system.

Partial boycotts to banks, that is, citizens' decision to conduct cryptocurrency transactions, is a good place to launch a larger campaign. This kind of movement can start with simple changes, such as offering or accepting bitcoin for small transactions, or using it to buy goods from retailers that accept encryption. It can even be a grassroots service like providing cash for payment or acceptance of cryptocurrencies rather than simple work.

In a practical sense, the legal value of Bitcoin is very important to traders and holders, but this is not the only meaning of Bitcoin innovation. The ultimate goal is to make Bitcoin an independent, decentralized economy that is not usurped and destroyed by banks.

For the time being, forget that bitcoin is "valued" compared to fiat. The value of Bitcoin far exceeds the price of the dollar and the cent. Instead, consider the value you might transfer from your bank's vault to your own hands. Rather than looking for sweet sweet legal gains, it's better to use it as a protest tool—an independent declaration—to leave those selfish banking behavior behind. (shared finance)