In this episode of Understanding Crypto, James Burtt and Paul Abercrombie talk about how cryptocurrency is fueling the decentralised economy in the new world. Crypto is an attractive alternative to traditional investments because it is decentralised. James and Paul discuss one way crypto can protect your wealth; they also share real-life examples of what is happening all over the world as cryptocurrency continues to expand and become more accessible to people from all walks of life.

How Did We Get Here?

“What a world we live in!” Paul exclaims. “People are having their boats taken off of them, their planes stopped on airfields, their assets frozen and their houses taken off of them.” These government sanctions could be for the right reasons, but may equally be for wrong ones, both hosts point out. The current issue of Russian oligarchs’ assets being frozen, seems to suggest that democratic governments are resorting to ‘backdoor’ tactics to fight dictatorial leaders. The Canadian government also froze hundreds of protestors’ assets “because it didn't line up with what they perceive to be the right thing to do.” These sanctions appear hypocritical and have serious moral and legal implications. “It was acceptable for [Russian oligarchs] to bring their money into the country to buy the asset,” Paul comments. Millions of pounds were put into the economy by their trade. How can the government now look askance at these same people? Is there proof that they’re directly connected to Putin, or is it all just propaganda? How did we reach the point where we seize people’s assets because we don’t agree with how their wealth was generated in the past, or because they have links to someone we disagree with? Paul and James applaud Prime Minister Boris Johnson’s response that sanctions against individuals would only be put in place when evidence proves that they should be. [Listen from 2:00]

Beautiful, Decentralised Crypto

Current events are opening up an interesting debate about decentralisation and crypto in general, Paul says. Nations states have tried to ban their citizens from using crypto in the past through regulations and legislation. However, he continues, “You can't actually ban an individual from transacting with crypto because it's a decentralised asset. That’s the beauty of it… It's very hard in a practical term to actually ban a user from using crypto because the argument is… that crypto could be used to circumvent the sanctions, that it could be used to move value around the world.” Some people are calling for banning Russian crypto transactions. The only way that can happen is to limit their access to exchanges, but there’s no way to stop private peer-to-peer transactions. In any case, Paul and James argue, this goes against the very principle of a global decentralised network: it’s not really decentralised if someone can switch off another person’s access. “It doesn’t sit right with me to say that a nation state should be banned from transferring crypto assets,” Paul remarks. [Listen from 15:25]

Is This a Democracy or Not?

The Canadian government recently froze the assets of hundreds of their own citizens.  The reason these Canadian citizens were seen as threats? They were truckers protesting COVID regulations. Their protest action effectively halted Canada’s supply chain, and this infuriated the government. Prime Minister Trudeau’s response was to invoke the Emergency Act for the first time in history. This gave the government and law enforcement sweeping powers to go after these citizens’ finances. Paul points out the painful irony: “So basically we live in a democratic world until they don’t want us to… If we can't stop you on a legal basis with cops on the streets, we will take your assets.” [Listen from 19:22]

Protecting Your Crypto Assets

It’s no wonder more and more people are seeing cryptocurrency as a safe and viable way to store and protect their wealth, James and Paul argue. Storing your crypto in a hardware wallet is the safest course of action because no one can take it away from you unless they steal your hard drive. You can take that hard drive anywhere in the world and have access to your crypto assets. “It's theoretically impossible for them [governments] to prevent or freeze or take crypto digital assets away from somebody if they're stored and looked after in the right way,” Paul comments. Two things worry the hosts, however:

1. That governments will make quick regulation changes for crypto to prevent us from having this freedom and power;
2. That they will revive and aggressively promote the narrative that crypto is being used by warlords and underworld criminals.

Crypto and Bitcoin have made significant strides, and there’s still a long way to go towards mainstream adoption. False narratives and repressive sanctions would hurt us all in the long run. [Listen from 22:15]

Key Takeaways:

• Decentralisation has its pitfalls, but it’s better than what we have now.
• Nobody can really ban you from having or using crypto.
• Are you really free if the government can arbitrarily freeze your assets?

Resources

James Burtt on Twitter | LinkedIn | Instagram | Clubhouse

Paul Abercrombie on Website | Twitter | LinkedIn | Instagram