Bitcoin’s unique ability to quickly move large amounts of value across international borders does indeed make widespread adoption a possibility. This may result in some benefits for economically disadvantaged people, for instance by reducing fees associated with international remittances. Nevertheless, I argue that elite early adopters who are primarily located in wealthy countries would be the primary beneficiaries of mass, global adoption and the exponential increase in Bitcoin’s value that this would presumably entail. Early adopters already own most of the Bitcoin that will ever exist, control its means of production (mining), and have a significant head start in creating the technologies and companies that will dominate the hypothetical global cryptoeconomy. Furthermore, the proliferation of cryptocurrency would introduce new financial risks as well as rewards for impoverished users. For instance, difficulties in using Bitcoin securely expose users to theft through hacking. Meanwhile, the diffusion of an inexpensive, broadly accessible, border-agnostic payments and savings technology provides international fraudsters with access to new pools of victims in marginalized economies. This is already evident in the success of pyramid schemes like MMM among impoverished people in South Africa, the Philippines and beyond. Finally, the very same space-agnostic properties of Bitcoin that potentially facilitate incoming remittances and international freelance work can equally facilitate capital flight.
Despite these concerns, marginalized economies must consider the possibility that Bitcoin or something similar could become increasingly prevalent within and beyond its borders. This possibility is acknowledged by a growing number of policymakers, academics and economists who point to the disruptive potential of digitalized, programmable money that is not constrained spatially or subject to the control of a single state or corporation. One possible response is to prohibit Bitcoin in an effort to protect vulnerable citizens from internet crime, discourage capital flight and preempt wealthy economies from accruing disproportionate benefits. I believe that this approach is likely to fail in the long run. Low technological barriers will make prohibition difficult to enforce and propel the cryptoeconomy underground where it will be difficult to control. Furthermore, countries that effectively prohibit Bitcoin use in the early years of its proliferation will experience magnified disadvantages if the protocol eventually does become globally entrenched. An alternative approach is to construct a strong regulatory framework for Bitcoin. On the downside, this tacit endorsement could increase the probability that Bitcoin will become globally pervasive, thus “locking in” the benefits that would accrue to elite early adopters in wealthy nations. On the other hand, regulating Bitcoin would facilitate the observation and taxation of activity in the cryptoeconomy. A permissive approach would also encourage the development of indigenous businesses, skills, technologies and cryptocurrency holdings that will bring rewards in proportion to the technology’s global diffusion. Such benefits may potentially be maximized by policies that encourage inflows of cryptocurrency, for example through remittances.