Hello Bitcoin, A Letter From Iran!
This letter written by Salman Sadeghi is a response to Bitcoin Magazine’s letter entitled “Dear Iran, a letter from Bitcoin.”
Dear bitcoin
Congratulation on your victory in the war with central banks! This victory and your success as the first cryptocurrency of the world promise a new future for our old-fashioned financial world. I am a citizen of Iran, who has spent all his life living in Iran, and I want to take this moment to discuss why I, despite my heartfelt love for you, believe you cannot solve the problems of my country.
You came at a time when the Great Recession of 2008 had brought the banks and financial institutions to the brink of bankruptcy. Countless extravagances, risky investments, lending behind closed doors, along with the inherent contradictions of the capitalist economy, had once again emerged as a devastating crisis. As the lenders of the last resort, governments always support them to salve the nation’s financial wounds. The solution is always to devalue their debt, devalue money, and transfer bankruptcy to society. In the end, this is us, the masses, who pay the price for the stupidity and corruption of the central banks. That was not the first time that this, believe me, happened. As John MacAfee in his “Declaration of Currency Independence” wrote:
“The whole of civilization has quietly fallen under the influence of sovereign entities with the ability to control the value of expended work through the manipulation and control of currency”.
So you came with a solution in your heart: Let’s decentralize financial relations! Let's cut the hands of intermediaries and take back the state monopoly on the fabrication of money. We got your message. It was so revolutionary. We, as the people who are really tired of the Superpower’s sanctions and centralized economic policies, would better appreciate your novelty. But dear bitcoin, There are problems that make us frustrated with the dream that you can solve all our problems. I will mention some of them below.
You must know that a few mining pools have taken control of more than half of your mining process. Gervais, in “is bitcoin a decentralized currency” draws a similar conclusion. He indicates that only three centralized mining pools control more than fifty percent of the bitcoin network’s computing power. These mining pools have accumulated the computing power of those interested in you by providing profitable schemes. They are a potential threat to a genuinely decentralized distribution of power and responsibility in your network. So how someone expects that a country with more than 80 million population can trust a network of three Chinese mining pools?
Besides that, do you know Centralized Exchanges and Wallet providers that are hosting most of your coins can easily restrict users and manipulate their funds, remember what Bittrex did to Iranian users! Do you see how easily they make tremendous fluctuations in your exchange value when they own their user's funds?
Moreover, you know better than me, around 90 percent of your coins are previously mined. So now that mining is more pricy, How someone expects that we allocate all our resources, especially at this moment of power shortage in our country, to keep mining alive, especially at a time when the Chinese are no longer interested in this energy-consuming process, and American wealthiest are nagging about its environmental impacts?
Bitcoin, my Darling, Have you heard about the distribution of wealth in your community? Only for your information, I need to mention that independent researchers believe that the Gini coefficient of your community is even higher than the most totalitarian regimes of the world. For example, Manas and Parth Gupta, in “Gini Coefficient Based Wealth Distribution in the Bitcoin Network,” estimated the bitcoin Network’s GINI coefficient around 0.9, which indicates a tremendous inequality in the distribution of wealth. As you may know, The Gini coefficient is a measure of statistical dispersion intended to represent the wealth inequality in a given community. In this measurement, one means that the total wealth is accumulated in the hands of one. You should know that this concentration of wealth would provide big actors total control of bitcoin’s supply and price. So believe me, if we want to keep a currency that can lose half of its value in a day for the pleasure of its big actors, Why don't we keep Rial, our poor national currency!
In addition, the libertarian rhetoric surrounding you promotes the fact that everyone can participate in your network, and there is no restriction for users’ movement. I wish it were true because in our out-of-date financial world central authorities can easily restrict users that they don’t like! Like what they did to Iran by economic sanctions. But the truth is not beautiful. As you know, Bitcoin transactions are publicly available, and every single coin’s expenditure can be publicly tracked. The government and entities can taint coins that are related to activities they do not like. Miners and individual users may stop interacting with taint coin owners, and it would devalue all the coins pertaining to that address. So you see, Central authorities and government can still exercise their power even in your semi-decentralized network! So, it is possible that in the future, the centralized institutions boycott our country again, this time in bitcoin transactions?
My lighthouse, Dear bitcoin
My beautiful but sad country suffers from countless fundamental problems, which are now exacerbated by the US sanctions and the pandemic. Of course, you can help us; your message to cut the hands of intermediaries and rebuild transparency and confidence with cryptography will be our beacon! We will do our best to spread the idea of decentralization of financial relations. But it is not you who can solve our problems, It is Us! believe me.
“We, the undersigned, will dedicate our lives building networks and systems that restore the Integrity of Value and directly challenge the authority of those who seek to destroy Value.” Declaration of Currency Independence
Your lover
Salli
