Andreas Antonopoulos: Policies in countries such as India and Venezuela indirectly provide financial support for Bitcoin expansion plans

Recently, Andreas Antonopoulos, author of "Mastering Bitcoin," spoke at a public event about the so-called "economic freedom" policies of government leaders around the world. These policies have caused panic around the world. Antonopoulos pointed out the reasons why governments create inflation and confiscate people's property.

The people of these countries are hostages in the currency war.

In Antonopoulos' view, the abolition of banknotes by governments at all levels around the world is one of the incentives for the popularization of Bitcoin. In addition, their policies have indirectly promoted the progress of the Bitcoin network expansion plan.

Devaluation and the need for abolition

In his speech, Antonopoulos analyzed several reasons why governments create inflation, confiscate funds, or restrict various payment methods.

If you were a government official, faced with billions or trillions of dollars in debt, what do you think would be the best solution? Raise living standards and productivity and wait for the crisis to pass, or confiscate the savings of middle-class retirees and hit employees in society by making them pay extra taxes (inflation)?

Indeed, Venezuela is currently experiencing hyperinflation due to high government spending and debt. The South African nation has sold off large amounts of its gold and foreign exchange reserves to pay down its debts.

In addition, some government policies are aimed at limiting "black money" and tracking illegal financial activities such as money laundering or tax evasion. This is why Indian Prime Minister Narendra Modi recently announced the abolition of 500 and 1,000 rupee banknotes from circulation.

Antonopoulos believes that if the Indian government benefits from the demonetization experiment (from their own perspective), other countries are likely to follow suit.

These experiments are progressing rapidly.

Bitcoin as an alternative

The current situation in India and Venezuela highlights the main selling point of Bitcoin, that it is a permissionless, censorship-resistant digital currency. Indeed, many people believe that certain financial and monetary policies implemented by governments are essentially promoting the price of Bitcoin.

Once the world economy abolishes physical cash, Antonopoulos said:

Cash is essentially a transparent, private, P2P form of money. Cash allows individuals to trade within their local communities, but this form of money is about to be replaced by digital transactions. Because the government can monitor digital trading platforms in real time and confiscate assets at any time, such platforms are controllable and allow negative interest rates.

The most obvious difference between Bitcoin and physical cash is its existence in digital form. The cashless society also brings opportunities for the development of Bitcoin, because Bitcoin has the characteristics of cash while maintaining digital form, such as full ownership of bearer property and high privacy.

With Bitcoin, governments can no longer continue to manipulate the economy in an experimental setting. Currently, they have to deal with citizens being able to easily bypass their policies by using this new decentralized financial network.

The government’s financial policies and expansion plans

During the Q&A session at the event, Antonopoulos said that government policies have inadvertently contributed to the growth of Bitcoin prices, and therefore indirectly provided a source of funding for Bitcoin's expansion plans.

This currency war has driven investment and development in the Bitcoin field and promoted the construction of system infrastructure.

When asked how Bitcoin is coping with its growing customer base, Antonopoulos responded:

Indeed, we must find a solution to the scaling problem. We must expand the Bitcoin network to accommodate the growth in users. And guess where the money will come from?

Antonopoulos then proposed the idea of ​​government policies to create a source of funding for Bitcoin expansion projects:

There are also several Bitcoin exchanges in these countries with collapsed economies. How do they transact funds? Of course, they can’t transact directly on the Bitcoin blockchain due to fees and capacity limitations. It would be nice if there was a Lightning Network. But they simply don’t have enough funds to invest in the Lightning Network. However, if they can take advantage of Bitcoin in these countries and use the fees from selling Bitcoin for the construction of the Lightning Network, they can achieve higher liquidity in the market.

Finally, Antonopoulos pointed out that citizens who have switched from their local fiat-dominated systems to Bitcoin are indirectly funding the development of new applications and scaling solutions for the P2P digital cash system.

Antonopoulos concluded:

As more and more people participate in the Bitcoin economy, many smart people will see the business opportunities: 'They have Bitcoin, so we support the use of Bitcoin to purchase goods, provide Bitcoin investment products, and develop applications specifically for Bitcoin users.'