How Bitcoin CoinJoins can help promote democracy movements

Hundreds of activists around the world use Bitcoin for censorship resistance, not speculative transactions. Activists around the world, from Nigeria to Russia, see Bitcoin as a tool to advance pro-democracy movements despite financial repression.

Financial repression and nonviolent resistance in various dictatorships were some of the topics discussed at the Human Rights Foundation’s Global Bitcoin
Bitcoin
Summit on Thursday, October 3rd. Since protest movements typically require funds to function, seizing cash and freezing bank accounts can have the effect of neutralizing citizens' ability to fight back against dictators before they become too organized. This is a typical method. This economic repression often forces protests to end, as it is difficult to organize protests without money, and organizers are unsure whether they can survive without financial access. is enough.

Bitcoin is not a physical asset that exists in space, so it cannot be seized. It is a digital asset and resides at an address within the Bitcoin blockchain. To spend Bitcoin, all you need is a 64-character private key to that address, or a 12-word (or 24-word) phrase associated with your wallet. Private keys are too long for most people to remember, but a piece of paper with a private key written on it is much easier to hide than physical cash. Bitcoins also cannot be frozen, as there is no authority on the Bitcoin network with the power to block or stop transactions. Even if there is an address on the Bitcoin network that you want to stop trading with, there is nothing you can do about it.

These characteristics of Bitcoin mean that despite the best efforts of U.S. authorities to sanction foreign adversaries, they are unable to prevent foreign adversaries from transacting using Bitcoin. This often causes trouble for US authorities. But of course, networks that resist censorship by foreign authorities will necessarily also resist censorship by U.S. authorities. This is the price we are willing to pay for democratic activists around the world. According to the Institute for Various Democracy Studies at the University of Gothenburg in Sweden, 5.7 billion people, or 72% of the world's population, live under authoritarian rule.

When financial repression fails, dictators often resort to a second tactic: arrest followed by torture. One might think that using Bitcoin would make it harder to find those responsible through protests, or at least through financial transactions. But that's not the case. Bitcoin transactions are recorded on a ledger, and the ledger is public. Anyone can download, view, and analyze. Additionally, although the ledger does not contain an individual's identity or location, it is subject to analysis and often yields identifying information. Of course, this could have dire consequences for anti-authoritarian pro-democracy participants and activists. The more resources a dictatorship has, the greater the risk of using Bitcoin. It's certainly better than banks, but there are still risks.

There are ways to make your Bitcoin transactions more private. One is CoinJoins. With CoinJoin, users collaborate to build transactions and coins are combined and sent to different addresses. No destination address is connected to any source address. No one knows who else is coinjoining with them. Since this is an automatic protocol, there is no coordinating authority controlling the Bitcoins involved. Each user is always in control of their coins.

Thanks to CoinJoins, you can send money to activists and protesters without anyone knowing who sent it. Russian citizens can send Bitcoin to the Anti-Corruption Foundation through CoinJoin without the knowledge of Putin's government – even if Putin's government knows who the sending address belongs to and Who the final destination address belongs to. Of course, in such cases we recommend doing multiple rounds of CoinJoining.

Bitcoin's censorship resistance makes it a favorite tool of protesters. However, it is not private enough to ensure that individuals will not be identified or arrested. So they turned to CoinJoins' privacy features.

CoinJoins allows democracy protesters fighting dictators to use Bitcoin, a censorship-resistant currency, more privately. People can hide their identity from those who are hunting them. This is something that should be encouraged and supported. However, some governments – democratic Even the government takes a different view. They claim that CoinJoins violates anti-money laundering regulations. The US government has arrested the developers of Samourai Wallet, a privacy-focused wallet that used CoinJoins by default, for “facilitating money laundering transactions worth more than $100 million from illegal dark web markets.'' Indicted.

However, cybersecurity, AML and anti-terrorism laws are being used by authoritarian governments to target pro-democracy activists and opposition leaders, the Open Dialogue Foundation said. For example, Erdogan's government recently arrested a Turkish student on terrorism charges for participating in a religious event. India has arrested opposition Aam Aadmi leader on suspicion of financial crimes. Azerbaijan has arrested opposition leader Gubad Ibadoglu on charges of manufacturing, obtaining and selling counterfeit banknotes. In Venezuela, presidential candidate Edmundo Gonzalez was arrested on terrorism charges after an election he claimed to have won. Tunisian opposition leader Lotfi Mouraihi has been arrested on money laundering charges.

Putting aside the fact that Samourai's developers built a non-custodial wallet, never storing users' funds and therefore not transferring them. The fact remains that CoinJoins is an important tool for protests for human rights and democracy in authoritarian regimes. “Since 2020, Bitcoin has been used as part of the pro-democracy movement in dozens of protests across five continents that have affected millions of people,” said Alex Gladstein of the Human Rights Foundation. I'm guessing. He added: “HRF supports Bitcoin's privacy tools and recognizes the power of collaborative transactions to protect privacy for human rights defenders, especially those working in authoritarian regimes. ” he added. CoinJoin is morally neutral. Chainalysis estimates that approximately $25 billion worth of money will be used by illegal actors in 2023, with less than $2 billion going through the mix, such as CoinJoin.

CoinJoin works best when there are many people doing CoinJoin because it provides privacy through obscurity. The more developers, coordinators, and users there are, the more privacy protesters can achieve. Although most Americans are not on the ground protesting against dictators, we ourselves can support this movement by coordinating CoinJoin and CoinJoining. A Democratic government could encourage it as a way to peacefully export democracy without using any taxes.