Lebanon shows that bitcoin can be a good alternative to the financial system

At the moment there are large demonstrations throughout Lebanon. Also in the capital Beirut, where roads are blocked, among other things. Originally the protests started out of dissatisfaction about a new tax of 6 dollars per month on calls via social media such as WhatsApp, but the demonstration soon grew.

Protesters hold the political elite and government responsible for the economic downturn, the poor state of public facilities and corruption in Lebanon.

No access to money

As a result, millions of Lebanese citizens have not had access to their own money for a week, which they have deposited at banks. This ongoing banking crisis shows how bitcoin can serve as an alternative to the financial system. That now seems like a utopia, at least in Lebanon. The government makes it difficult for Lebanese to own cryptocurrency.

Protesters took to the streets on October 17 to demonstrate against a new tax proposal from Prime Minister Saad Hariri’s government. The new law also imposed a tax on the use of WhatsApp and other similar apps. In all likelihood this is the straw that broke the bucket for many Lebanese because the demonstration now seems to focus on systematic corruption.

Banks across Lebanon are closed again today while protests against government corruption and the political elite continue.

That’s now 7 days or not being able to access your own money.

Bitcoin isn’t a quick quick scheme, it’s a free quick scheme.

– Rhythm (@Rhythmtrader) October 23, 2019

From the first day of demonstrations, the banks are closed and ATMs no longer have any money. As a result, many citizens are without money, and it is even difficult to buy food.

Prime Minister Hariri tries to convince the protesters to give up some of their demands, including those of his resignation. After announcing a reform package on Monday to appease protesters, the government sent the army on Wednesday to clear major roads.

The potential of bitcoin

There are many examples in which bitcoin can play a role during periods of political unrest. We saw this in Cyprus, in Venezuela and recently in Hong Kong. This is because certain properties of bitcoin are more emphasized in troubled areas than in quiet areas such as the Netherlands. Bitcoin is basically a censorship-resistant alternative, with more financial freedom than the current centralized monetary system can offer us.

Bitcoin is not dependent on a centralized banking system, so bitcoin does not stop when banks close their doors or when there is political unrest. Moreover, decentralized digital cryptocurrency such as bitcoin is also a potential solution for money depreciation. That is clearly visible in Venezuela, where citizens buy bitcoin to protect themselves against hyperinflation of the Venezuelan peso. In many third world countries, the US dollar is popular because it is more stable than the local currency, but now that almost everyone has access to the internet, bitcoin is increasingly seen as an alternative.

A few months ago you saw this in Zimbabwe, also a country with hyperinflation and continuing political unrest. Bitcoin became so popular that at one point Zimbabweans had to pay a premium of 650 percent on the peer-to-peer trading platform LocalBitcoins Zimbabwe. The asking price for one bitcoin was a whopping 75,000 US dollars.

There are more and more real examples where bitcoin can lend a helping hand. But in its current form, bitcoin is not yet a perfect solution for all our financial problems. To be seen as an alternative, bitcoin still has to solve some shortcomings. Consider the scalability of the currency and more privacy. Fortunately there is plenty on the schedule and the best minds are working on the bitcoin protocol.