The Taliban took over the Afghan capital Kabul yesterday as America’s 20-year war came to a sudden end. In sheer panic, Afghans ran to banks to scramble for cash, only to find them evacuated with their money locked up.
Many wondered about the safety of people on the ground, wondered what would happen in the coming days and weeks as the Taliban returned to power, and watched in horror as people rushed to the airport in an effort to leave the country. Along with these concerns, Bitcoin maximalists also wondered aloud how the cryptocurrency could fix the country’s problems or could have prevented the war in the first place.
None of this, from U.S. military intervention in the first place to yesterday’s bank run, would have happened had it been for Bitcoin, some of the staunchest supporters of Bitcoin argue. “This should show you how important #Bitcoin is for the world. Control your own money!” tweeted one cryptocurrency newsletter.
“A sad byline of the Afghanistan situation are the images of people (of all walks of life) trying to get some money out of the banks and failing,” tweeted another popular account. “Let's end such inhumane situations thru sound p2p electronic cash where people can *always* be in charge of their own money.”
Dr. Josh Cotton, a Bitcoin advocate and founder of defunct MilitaryToken, said in a tweet that “an enormous amount of cash just fell into the hands of the Taliban because cash can’t be truly secured,” adding of course, “Bitcoin fixes this.”
For some, though, the situation in Afghanistan is not merely an opportunity for crass promotion, but a validation of some deeply-held beliefs.
Jimmy Song, one of Bitcoin’s most ardent public advocates, said Bitcoin would have prevented the war in Afghanistan had it been the global reserve currency instead of the greenback.
“No sane government would have spent explicitly taxed dollars on a war that cost that much and lasted that long,” he told Motherboard. “The only reason the US could was because of the dollar's privileged position as the global reserve currency which allowed stealth taxation of the entire world through inflation.”
The idea of inflation as stealth taxation, and its connection with war financing, is one that’s commonly shared by Bitcoin maxis with a libertarian streak.
That goes back to an old idea called debasement, notoriously practiced in the 16th century by England’s King Henry VIII to help fund wars with France and Scotland. The king replaced precious metal content of coins like gold with cheaper metals like copper, reducing the costs of currency production at the expense of taxpayers. Roman emperor Nero used to employ a similar trickery, cutting down on the silver content in the currency. By some estimates, debasement led to annual inflation of around 1,000 percent at one point in Roman history.
The US government does something similar today, say the proponents of the dollar-debasement theory. The government prints more money than it can back up with underlying assets so that it can fund foreign wars, which comes at the expense of citizens in the form of taxes.
“Bitcoin doesn't let governments do this crazy deficit spending as they are forced to get loans on the market to do so,” said Song.
Erik Voorhees, one of Bitcoin’s earliest public advocates and CEO of self-custody crypto platform ShapeShift, told Motherboard that while the situation in Afghanistan is complex, “fundamentally it is a symptom of a military empire having over-extended itself.”
“We shouldn’t pretend that Bitcoin will fix the immediate suffering there, but it absolutely helps solve the problem of empire, by starving the empire of tax revenues and curtailing its ability to print currency for the funding of wars,” Voorhees said.
“A Bitcoin world is a world of smaller governments, and smaller governments don’t invade and occupy foreign nations for 20 years,” he added.
“The bigger [concern] is the violence and destruction there,” Song said. But even in a war-torn, poverty-stricken country, Bitcoin can still help, he believes: “If you’re your own bank, you don’t have to worry about a bank run,” Song said.
Being your own bank, or the idea of self-custody, is at the heart of Bitcoin’s near-mythical origin story from the 2008 global financial crisis. Bitcoin’s mysterious founder Satoshi Nakamoto said Bitcoin would allow peer-to-peer electronic transactions without any need for users reposing their trust in an authority, like banks. It’s also this idea that's the root of skepticism today among some Bitcoiners of centralized exchanges that keep custody of your coins. “Not your keys, not your coins” is an oft-heard mantra.
The trials Afghans are facing now are very real. Afghan filmmaker Sahraa Karimi, the first woman to be appointed as the director-general of state-run Afghan Film Organization, posted yesterday a heart-breaking video appeal. "Taliban surrounded Kabul, I were [sic] to bank to get some money, they closed and evacuated,” she said. “I still cannot believe this happened.”
Bitcoin is likely the last thing many people in Afghanistan are thinking about right now, and using a historic crisis to promote cryptocurrency in a tone-deaf manner like some have done is bound to upset many. It’s also worth mentioning that, in the Bitcoin world, it’s become something of a meme to suggest that the Taliban might eventually adopt Bitcoin (this has been said of ISIS as well, but that never really materialized).
“Whatever the government of Afghanistan does with Bitcoin won’t matter nearly as much as what the people there do,” Song said.