Alex Gladstein describes how Bitcoin offered entrepreneurs in Nigeria, Sudan and Ethiopia a much-needed, financial resource for helping their families and communities throughout their countries.
In the eyes of most Western elites, investors, journalists and academics, Bitcoin rates anywhere from an annoyance to a disaster.
In May 2021, American billionaire Charlie Munger described Bitcoin as “disgusting and contrary to the interests of civilization.” Warren Buffett, once the world’s richest person, sat next to Munger in obvious agreement. He has said Bitcoin is “a delusion” and “rat poison squared,” and he has warned that he is sorry about its rise “because people get their hopes up that something like that is gonna change their lives.” Bill Gates, who also used to be the world’s richest person, has said Bitcoin is a “greater fool theory” investment and that he would short it, if he could.
HBO host Bill Maher skewered Bitcoin in an extended segment on his show, saying that the new currency’s promoters are “money-hungry opportunists.” A few weeks earlier, theNew York Times ran a story that said Bitcoin will “ruin the planet.” Financial Times columnist Martin Wolf has long pegged it as “ideal for criminals, terrorists, and money launderers.”
Alex Gladstein is chief strategy officer at the Human Rights Foundation and has been vice president of strategy for the Oslo Freedom Forum since its inception in 2009.
Prominent Ivy League economist Jeffrey Sachs has said that Bitcoin offers “nothing of social value,” while former International Monetary Fund (IMF) chief and European Central Bank President Christine Lagarde has called it a tool for “totally reprehensible money laundering activity.”
Over the past decade, these financial experts, reporters, and policymakers have continuously pounded the narrative and told the world that Bitcoin is risky, dangerous, bad for humans and bad for the planet.
This is an excerpt from “Check Your Financial Privilege,” a publication of BTC Media and Alex Gladstein (2022). The book is available for order here.
They are wrong, and they are blinded mainly by their financial privilege.
How financial privilege blinds dollar users to Bitcoin’s importance
The critics cited above are all wealthy citizens of advanced economies, where they benefit from liberal democracy, property rights, free speech, a functioning legal system and relatively stable reserve currencies like the dollar or pound.
But only 13% of our planet’s population is born into the dollar, euro, Japanese yen, British pound, Australian dollar, Canadian dollar or Swiss franc. The other 87% are born into autocracy or considerably less trustworthy currencies. As of December 2021, 4.3 billion people live under authoritarianism and 1.6 billion people live under double- or triple-digit inflation.
Critics in the dollar bubble miss the bigger global picture: Anyone with access to the internet can now participate in Bitcoin, a new money system with equal rules for all participants, running on a network that does not censor or discriminate, used by individuals who do not need to show a passport or an ID and held by citizens in a way that is hard to confiscate and impossible to debase.
While Western headlines focus on Coinbase going public, Tesla buying billions of dollars’ worth of Bitcoin and tech bros getting fabulously rich, there is a quiet revolution happening worldwide. Until now, governments and corporations have controlled the rules of money. That is changing.
To learn more, I spoke to Bitcoin users in Nigeria, Sudan and Ethiopia, three countries with a combined population of 366 million, well in excess of the number of individuals living in the United States.
The three speak for millions whose lived experience is much closer to that of the average person on this planet. Gates, Munger and Buffett may not have recently dealt with conflict and violence, black markets, relentless inflation, political repression and rampant corruption in their daily routine, but most do.
And yet, these bitcoiners are more hopeful for the future than the doomers listed in the chapter’s opening. For them, Bitcoin is a protest, a lifeline and a way out.
Here are their stories.
Bitcoin in Nigeria
Ire Aderinokun is a Nigerian entrepreneur. She is a front-end developer and user-interface designer from Lagos and is the cofounder, chief operating officer, and vice president of engineering at Buycoins, a cryptocurrency exchange that went through Y Combinator in 2018 and is now one of the most popular places to buy bitcoin in West Africa. She is a prolific writer, speaker, organizer and activist and one of the founding members of the Feminist Coalition, a group that champions equality for women in Nigerian society.
Aderinokun talks about Nigeria as a melting pot, like the “United States” of Africa. Three big ethnic groups dominate the country, but the population is split into hundreds of different tribes. This is a strength but also a challenge, as it is hard to bring so many different people together. The country is governed through a predominantly Muslim north and a predominantly Christian south, and national leadership rotates between these constituencies. Nigeria boasts the largest economy in Africa, and the largest population with more than 200 million citizens, but much of the wealth is tied to the export of oil.
Like in many rentier states, there is massive corruption and inequality: While the fabulously rich jet set around the world, six Nigerians are impoverished every minute. People who have wealth and power, Aderinokun said, do not let it trickle down and do not invest it back in society. This has resulted in a situation where, in major urban areas such as Abuja and Lagos, there are countless lawyers, for instance, working in restaurants, toiling away in careers that are professionally beneath them, because there are not enough opportunities. Millions head to the big cities for jobs, only to come up empty handed.
As a result, Aderinokun said the country struggles with unemployment, especially among the youth; 62% of the population is under 25 years old. Out of this crisis, however, are upsides. She credits Nigerians with being incredibly entrepreneurial. People do what they need to do to get by and having a side hustle, she said, is natural.
Part of this need to hustle relates to the country’s economic situation, where the official inflation rate now stands around 15%, with food inflation even higher. In her personal experience, Aderinokun has seen the naira decline from 100 per dollar to 500 per dollar. People, she said, are quite aware that the elites are stealing from the citizens through currency debasement. It is expected. So much so that when one’s family or friend gets a government job, she said, there is an assumption that they will provide for you and a circle of others. The money trickles down through nepotism and the people at the top get fat. This is an example of the “Cantillon effect” in action, where those closest to the point of money creation benefit at the expense of the rest.
Growing up, she saw people try to keep their money in dollars, send money abroad or buy real estate. This was how Nigerians could protect the fruits of their time and energy, but only a handful had these options. Now, Bitcoin is changing the game, allowing more people to save like never before. Any Nigerian with internet access now has an escape from their unreliable, unequal, exploitative national monetary system.
Aderinokun got her start in Bitcoin with a Coinbase account in 2016. She and her friends initially thought: Could we use this new technology to send money abroad? As it turned out, Bitcoin was easier and faster for sending money from Nigeria to the United States than traditional means. So, she decided to launch Buycoins, a cryptocurrency exchange. Paystack – the Nigerian tech giant – was just a few years old then, and she is grateful that it existed at the time, as it allowed Buycoins to reach customers and create an experience that otherwise would have been impossible.
At first, the payment component of Bitcoin was what really attracted Aderinokun, the idea that it could actually be easy instead of difficult to send money from one place to another, skipping over national borders. This, she thought, is something Bitcoin can fix.
Beyond the exchange itself, Buycoins also released an app called Sendcash to help Nigerians abroad send money home. Perhaps a family member moved to the United States and wanted to send dollars back. The recipient in Lagos would normally need a domiciliary account in dollars, but Aderinokun said those are difficult to open. Even then, the bank wire or using a service like Western Union can be costly and slow, and exchanging from dollars to naira can be difficult. She thought: Could Bitcoin help streamline the process?
With SendCash, users in the United States send bitcoin to the app, and it deposits as naira a few minutes later in any Nigerian bank account: a game changer. Today, the app can also send naira to the United States or Ghana, all using bitcoin as a payment rail.
Aderinokun said that around 45% of the Nigerian population has internet access. So is her mission worth it, if a majority of Nigerians still cannot even access Bitcoin? She said this is a dilemma she often ponders. There are countless internally displaced persons (IDPs) across Nigeria who cannot accept cryptocurrency because they do not have a smartphone. In the end, she said, the work and mission are worth it, because even though there are many who do not have internet access, there are tens of millions who do, and those individuals are sharing access to smart apps with those who do not have them.
As for the Gates and Buffets of the world: Aderinokun said some of Bitcoin’s critics may have valid points to debate, around, for example, the environmental impact – but she takes issue with Western elites saying there is no upside, or that it is a Ponzi scheme, or that it is just for fun.
They do not understand, she said, how important Bitcoin is for those who cannot get dollars. For billions, they are trapped in a flawed currency that does not fulfill the purpose of what currency is supposed to do. For many in Nigeria and beyond, Bitcoin is providing another option and solving real problems.
Is it just helping the rich? Aderinokun laughed and said: This is not the case at all. It is providing employment; it is helping people convert their naira to other currencies; it is enabling commerce where it was not previously possible. With the Feminist Coalition, it helped people overcome financial repression and the freezing of activist bank accounts. This is not, she said, just a case of people sitting around watching the price.
Moving forward, Aderinokun thinks more education is essential. Nigerians are still very misinformed about Bitcoin. The main reason they know about it, she said, is because the price keeps going up, and many do not see past that. Scams are a huge obstacle. Although, she said, more people are beginning to understand. They know bitcoin is volatile, but they see that it goes up and to the right over time, instead of down and to the right like the naira.
She also wants to focus on building bridges and ramps between the naira and cryptocurrencies. Buycoins works with a naira stablecoin, the NGNT, which she said can also be helpful to people without traditional bank accounts.
And building on- and off-ramps matters because the Nigerian government has Buycoins and other exchanges in its crosshairs. In February 2021, the regime pronounced that bitcoin was not legal tender and said banks should not hold or treat it as such. They later clarified that individuals could still trade but have pressured regulated financial institutions to stay away. Buycoins has been struggling to hold naira because banks do not want to work with it. But now, Aderinokun said, it has shifted to a peer-to-peer solution. When users need to go in and out of naira, buyers and sellers are matched in a marketplace.
Aderinokun does not actually think it is possible to effectively ban Bitcoin. The most the government can do, perhaps, is what it has already done – forcing institutions to stay away. But it cannot stop individuals from using hardware wallets or conducting peer-to-peer activity in a place like Nigeria. “No one,” she said, “can stop me.” It is like saying it could ban Facebook, she said. It could shut down the internet but that would have disastrous consequences for the whole nation.
What the government should be doing instead, she said, is trying to understand Bitcoin and working with exchanges to allow Nigerians to connect to the world around them. Aderinokun does not think the government should have an adversarial attitude. In fact, she believes Bitcoin can help it. Maybe it would even be a good thing if the Nigerian government figured out Bitcoin before other nations. But, she said, for the moment it is not even close to understanding how Bitcoin works. When asked if the government is using blockchain surveillance or spying on individual transactions, she laughed. It does not have the abilities or know-how yet, she said.
As for the future, Aderinokun is hopeful because she has seen Bitcoin’s potential. She watched it shine in the context of human rights and activism. In October 2020, in the middle of nationwide protests against SARS – a notorious special police unit that was terrorizing citizens across the country – the Feminist Coalition began accepting donations via Flutterwave, a fintech product. This started off well enough but then the regime started cracking down. Its bank accounts were shuttered.
Bitcoin was the only option left. There was no other way to receive, store and spend money. For Aderinokun and her co-founders, this was an eye-opening moment. They ended up setting up a BTCPay Server to process gifts from around the world in a way that avoided address reuse and protected donor privacy. Celebrities including Jack Dorsey shared the link, and they raised more than 7 BTC.
It was a great learning experience, she said, as many young people learned about Bitcoin in this moment as a tool for activism. The experience renewed and strengthened her belief in products she is building at Buycoins. People saw that Bitcoin was cool and that the government could not stop it. Because of this, Aderinokun thinks that one day Bitcoin will be talked about in the same way, with the same importance, as radio, TV and the internet.
Asked if she is worried about a world where the government can no longer control the money, she said no, she is hopeful. Just printing more money, she said, has its downsides, taking that option away is not necessarily a bad thing.
Bitcoin in Sudan
Mo, also known by his Twitter handle as Sudan HODL, is a Sudanese doctor. He currently lives abroad in Europe, practicing medicine to support his family back home.
Mo sees his country with brutally clear eyes. He described the capital of Khartoum as a crowded, diverse megacity filled with pockets of extravagant wealth and surrounded by an enormous belt of poverty. It is a city of contradictions, he said, where palatial residences sit next to utter destitution.
Mo has worked in Darfur, where he described the lack of development as simply stunning. There is no educational or health infrastructure. During his time there, he was one of three or four doctors treating hundreds of thousands of people. There was a total lack of primary care and there were no pediatric hospitals. He was treating women who suffered from fistula. The national ruling class, he said, did not invest in these places. Warlords ultimately filled the power vacuum, with the youth choosing violence instead of school as a way to get ahead.
Mo told a tortured history of his country. Sudan, he said, has been living through a vicious cycle of military coups and authoritarian rule ever since gaining its independence from the British Empire and losing its fragile first democracy.
Islam, Mo said, did not come to Sudan by violence but through traders and Sufis. He said his Muslim ancestors historically had a peaceful interpretation of their religion. But in the 1980s, the rise of Saudi Arabia’s oil wealth (see Chapter III) led to the export of the extremist and militant ideology of Wahhabism to many places around the world, including Sudan. Wahhabism was foreign to Sudan’s culture but was forced into the country’s political structure.
By 1983, military governments had allied themselves with the Muslim Brotherhood and imposed Sharia law, alienating the predominantly Christian and animist south. A democratic revolution in 1985 was short-lived, as Islamists led by Omar al-Bashir staged another coup in 1989, paving the way for three decades of his rule. Society was militarized and the intelligentsia were purged. If one spoke out against the regime, Mo said, they were not just speaking out against government officials: They were speaking against Islam. They were against God himself. This gave Bashir an excuse for his brutality and new jihads against ethnic minorities.
Since colonial times, minorities in South Sudan and Darfur had resisted authority from strongmen in faraway Khartoum. The seeds of this tension were planted in the 1950s when these populations fell under postcolonial Arab rule. Over time, these minority groups rebelled, only to be violently subjugated. The bloodshed peaked in Darfur in the early 2000s, when Bashir committed genocide, using the Janjaweed militias to murder hundreds of thousands and displace millions of people. This triggered the United States and European Union to increase sanctions against Sudan, cutting it off more deeply from the outside world.
Mo thinks it is important to share Sudan’s economic history, often overshadowed by the political story. In addition to the extreme inequality on display in Khartoum, there is a bigger picture of low-income workers trying to catch up to high inflation, while those closer to the regime manage to do well. Infrastructure decayed, and the average person suffered while Bashir and his cronies loaded up on weapons, real estate and foreign assets. Modern Sudan is another vivid and tragic example of the Cantillon effect.
It was not always like this. Mo said that under the gold standard, three Sudanese pounds once bought a dollar. There was a middle class, and Khartoum was known as the London of North Africa. But in 1960, the Sudanese central bank took over and devalued the currency, the first instance of what would happen many times over the coming decades.
When Bashir seized power in 1989, he installed a regime of economic terrorism. To instill fear in the population, he chose to make an example of a young man named Majdi Mahjoub, who was a single child living at home, looking after his elderly parents. A Christian minority in a community of traders, Majdi had possession of a few thousand U.S. dollars in his home, the result of many years of family commerce.
Bashir created a new special “economic” division, a sort of secret police, that would go home to home, searching for foreign currency or gold. When the jackbooted thugs came to Majdi’s house, they found his savings and arrested him. After a show trial, he was hanged, sending a message to the population: If anyone tries to use anything but the Sudanese currency through our banking system – if anyone tries to own their own money – they will get the death sentence. Even today, according to Mo, many Sudanese are fearful of using dollars or storing money at home.
At the same time, Bashir launched a tribute system to finance his activities. On top of what was taken through traditional taxation and seigniorage, citizens had to pay a portion of their income to help the martyrs of their dictator’s wars. The secret monetary police would spy on individuals, freeze bank accounts, confiscate assets and impose made-up fees on merchants. No reasonable suspicion was required. Mo calls it a system of national extortion.
As far as the currency itself, Mo recalled several times in his life when the system was overhauled. In the late 1980s, his family was living abroad in Saudi Arabia, and when they visited home, a quarter of a Sudanese pound could buy a sandwich or a tasty snack on the street. But after 1992, when Bashir changed the haram and colonial pound for the Islamic dinar, those quarter pounds became worthless. The mid-1990s saw massive inflation, with the “official rate” of the dinar going from around 400 per dollar to more than 2,000. Many years later, in 2007, Bashir decided to ditch the Islamic facade and switch back to the pound. Citizens had a small window to redeem dinars for the new currency, after which they were no longer legal tender, forcing citizens to surrender their savings or watch it disappear.
Today, after a series of devaluations and constant inflation, a Sudanese pound will officially obtain around $0.0025. According to Mo, inflation as of late 2021 is 340%. While the average citizen watched as their wages stagnated and living costs rose, Bashir and his cronies accumulated billions and saved them in foreign currencies, locked away in Swiss bank accounts. Today, the new Sudanese government is struggling to regain all that was looted and lost in the past 30 years.
In the spring of 2019, in a stunning example of people power, the Sudanese population finally pushed out Bashir. A fragile reform government followed, where military leaders of the old regime share power with a technocratic civilian government. People were initially optimistic about the change, Mo said, but the reality did not meet their expectations. At the end of 2021, the military came back into power.
He says the IMF has a deal to help give $5 per month to Sudanese families, and in a country where some only make a dollar a day, this seemed significant. The problem is the families are paid not in dollars but in pounds, so the value disappears after a few months. The sanctions levied on the Bashir regime are now gone, but most fintech products and payment apps are still not available for Sudanese, as corporations shy away due to “risk management.”
It is clear that, in some places, a political revolution is not enough. Toppling a tyrant like Bashir is a historical and incredible achievement; but the political situation remains difficult and people are still suffering. So, some, like Mo, are turning to Bitcoin.
In 2015, Mo first heard about this mysterious internet money, as he put it, on YouTube. He spent countless hours watching Andreas Antonopoulos videos and read through “The Internet of Money,” which helped him understand the “why” behind the new currency. He started to use it while working abroad, exchanging euros for bitcoin over PayPal on LocalBitcoins.com. He kept things small and mainly to himself. But in 2017, he started talking to family and friends. He told them: This is going to be a part of our future. Many of them are now saving in bitcoin.
As of today, Mo estimates that 13 million of Sudan’s 43 million people have internet access, and he thinks that, in a few years, that number will top 20 million. There are more and more people coming online, and there are now smartphones even in remote regions like Darfur and the Nuba Mountains. People are plugging in everywhere.
He said that the Sudanese who do already have smartphones have an extended responsibility to help others with their privilege. In his case, he has a large extended family that he supports. He is their “Uncle Jim”: lingo in the Bitcoin world for a knowledgeable friend who helps with Bitcoin matters.
Where there were once financial walls cutting off Sudan from the world, Bitcoin has made bridges. It is now easy for Mo in Europe to send money back to his friends and family. What once took days now takes minutes. And he does not have to trust any third parties or require his family to deal with thieves in government.
Mo is beginning to see just how massive the Lightning Network will be for Sudan because most future users will be in the micropayment space, sending transactions of $5 or $10, and will not be able to afford the increasingly high on-chain fees. Lightning is a second-layer payment network that sits on top of the main Bitcoin system and enables users to send bitcoin instantly for tiny fees anywhere in the world. If international exchanges can choose to service Sudan and enable Lightning withdrawals and deposits, he said that would be an enormous step forward for financial empowerment.
As for the likes of Bill Gates and Warren Buffett, Mo said they might understand the technology behind Bitcoin, but they will never be happy about it because it is coming to seize a place on the global stage that they used to have just for themselves. In direct contradiction to billionaire claims that Bitcoin is worthless and has no social value, Mo knows many Sudanese who rely on it as a lifeline. Maybe, Mo said, the critics just cannot see past their financial privilege.
For Mo personally, Bitcoin has been transformative. He has started a podcast in Arabic for Sudanese youth to talk about Bitcoin, money, freedom and the future of their country. Fifteen years ago, he could not have imagined being this optimistic.
One of the darkest moments in his life was in 2013 after a peaceful political uprising was completely crushed. Mo left all social media. He could not bear to look at the bloody images and videos streaming from the violence. But now, with twin political and economic transformations, he sees the light at the end of the tunnel. When people say Bitcoin is hope, he says that he agrees.