Traditional fintech, also known as financial technology, has brought society a multitude of benefits. It has knocked down many borders, decreased costs, and allowed for businesses, small and large alike, to be more efficient.
Yet, there is one glaring flaw with digital finance ecosystems, they are susceptible to surveillance by Silicon Valley firms and more importantly, governments. We’ve seen this issue grip the anti-Bitcoin and -crypto China, which is in the middle of establishing a “social credit” system that uses financial data, social media, and common observation tactics to “rank” citizens.
Image: Mary Hui on Twitter
As a result, there are still many that prefer cash. This was only recently accentuated in a recent Hong Kong protest, during which locals scrapped their digital payment systems for cash in fears of governmental oversight, presenting a solid case for the adoption and use of decentralized cryptocurrencies such as Bitcoin.
The Hong Kong Protests
For those unaware, let Blockonomi give you a brief recap of the demonstrations in Hong Kong.
First off, the city, a special administrative region of China, was formerly a British colony. This occupation gave the island city a taste of freedom and democracy, much unlike those over in mainland China, which was experiencing the rise of communism during the latter end of British rule.
As a result, once the United Kingdom handed the city back over to China under a “two system, one country” system in 1997, there were protests. Although Chinese leaders promised to let Hong Kong stay autonomous until 2047, many saw this ritual event as the beginning of the end for democracy in the region.
Indeed, in the years that followed, protests and riots were commonplace. The demonstrations reached a head in 2014, which was when the so-called “Umbrella Movement” or “Occupy Hong Kong” occurred. During this multi-month event, locals, mostly students and younguns, protested against the mainland Chinese government’s purported political intervention.
Those involved accused Beijing of planting anti-democracy candidates into Hong Kong elections, all while hurting pro-democracy parties. The Umbrella Movement resulted in nothing, but protesters and activist groups promised they would be back.
And back they were on Sunday and Wednesday, when hundreds of thousands appeared to protest the implementation of an extradition bill that would give Hong Kong the authority to ship criminals for “serious crimes” back to the mainland for trial.
Some fear that this right can be manipulated to extradite naysayers of Beijing. A purported one million Hongkongers rallied on Sunday, shutting down the city, but the region’s chief executive Carrie Lam didn’t budge. So the protests continued into Wednesday as regulators were slated to discuss the bill. This time, presumably as a result of the movement’s lack of legality, fewer showed, and many tried to cover their faces.
Those that attended tried to hide their identities at such lengths that reporters, citing the activists (many of which were in their teens or twenties), decided to ditch the use of their fintech accessories and cards, namely the Octopus Card, which allows for metro travel and the purchase of certain goods (ex. food at Mcdonald’s).
Instead of using Octopus, they queued up to buy paper tickets, which are uncommon in the city. They feared that police would scour through the logs to pinpoint individuals involved in the protests, which turned violent at some points, and then crack down further.
"We're afraid of having our data tracked," one female protester told me.
She said that this ticket-buying was't as prevalent during the 2014 Umbrella Movement. Five years on, however, people are more wary & aware.
— Mary Hui (@maryhui) June 12, 2019
How Does Bitcoin & Crypto Tie In?
This begs the question — how do crypto and Bitcoin tie in?
Well, Bitcoin is simply digital cash, and altcoins are trying to replicate that characteristic. If implemented correctly and if the proper protocols are in place, Bitcoin can allow for a private financial experience that is impossible with something like PayPal, Visa, or even the Octopus system utilized in Hong Kong.
As Arthur Hayes of BitMEX once explained:
“Sooner than you think, cash will not be an option for privacy, or for anything else. And private citizens will come to appreciate the inherent value of Bitcoin, as their ability to discreetly hold and transfer value evaporates once cash goes the way of the dodo.”
But even more importantly, many believe that cryptocurrency and related technologies can reenable democracy, and help to stem authoritarian regimes and their questionable practices.