We will continue our conversation about Bitcoin’s role in humanity, this time in the area of private property rights. But before we talk about that, we need to understand why private ownership is so important.
One of the biggest drivers of economic growth and higher living standards is private property rights.
This is the idea that you own the fruits of your labor as well as anything else you buy with the fruits of your labor. To illustrate, let’s say you work at a company and save enough money to buy a car. The money you earn (which is the fruit of your labor) and the car are both yours. The government must protect your property from being stolen by other private individuals, and the government itself cannot take your property without good reason and/or just compensation.
Private property rights are important because they create an incentive for productivity. People become discouraged from working when the money they make or the things they buy can be confiscated without warning or compensation.
And in a society where people have no incentive to work, fewer products and services are available and fewer innovations take place. These three factors are the most important drivers for improving a region’s standard of living. Private property rights are why there are better cars, better phones, computers and faster internet every year.
But of course there are no property rights. They must be enforced by a government that punishes people for stealing other people’s property and does not encroach on the property of its own citizens. And unfortunately, many countries around the world don’t have a government that does this.
For example, the Chinese government will ban people from popular Chinese payment systems Alipay and WeChat Pay if they make statements that go against the current authoritarian regime. Russia will freeze people’s bank accounts if they spread news that works against the Kremlin and its interests. And in 2021 Nigeria froze the bank accounts of citizens protesting against the government.
The lack of respect for private property harms the citizens of these countries and keeps them in worse living conditions compared to other freer countries. It is no coincidence that democratic countries are much wealthier than authoritarian countries.
How does bitcoin protect property rights?
Bitcoin’s blockchain inherently makes it impossible for private and public actors to take control of someone else’s money. Blockchain is immune to theft and unified control because it is a decentralized system. The blockchain is distributed across a network of computers called nodes, and to control the blockchain you would need to control at least 50% of the nodes on the network. This is virtually impossible as the amount of energy and resources required to control 51% of the grid would be beyond any practical measure today. Blockchain has stood the test of time as 51% of it has yet to remain under the control of a single actor, and as the number of nodes increases, that becomes less and less likely.
Citizens under an authoritarian government do not have to worry about the government stealing their bitcoins, nor do they have to rely on incompetent, failing governments to protect their property.
For millions of people around the world, Bitcoin is the first chance to exercise self-sovereignty over their own money. Your money is under your control and you don’t have to worry about someone stealing it. Bitcoin helps them uphold the human right to private property.
This is a guest post by Siby Suriyan. The opinions expressed are solely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.