Chamath Palihapitiya, the owner of the $2.6 bln NBA team Golden State Warriors, recently stated that Bitcoin is the ultimate insurance policy against autocracy and currency curbs.
Reiterating my belief about $BTC. It's the ultimate insurance policy against autocracy, currency curbs and other forms of value destruction.— Chamath Palihapitiya (@chamath) May 4, 2017
Bitcoin is a unique store of value, settlement network and digital currency in the sense that it offers absolute financial freedom and independence to its users. Within Bitcoin’s peer-to-peer network, users can send each other transactions or payments with the absence of intermediaries and third party service providers.
Palihapitiya described Bitcoin as the insurance policy against autocracy, or a government with absolute power, and currency curbs because of its decentralized nature. Central entities or authorities can’t possibly censor, restrict, manipulate and control the Bitcoin network.
For this reason, to prevent Bitcoin moving over to the over-the-counter (OTC) market that is arguably much harder to oversee and surveil, governments were forced to adopt and regulate Bitcoin against their will. Regulated or not people will still use Bitcoin. With regulatory frameworks, however, Anti-Money Laundering (AML) and Know Your Customer (KYC) policies can be used to the advantage of the government to identify Bitcoin users.
However, the emergence of privacy-focused two layer solutions such as TumbleBit could potentially offer complete financial privacy to users because it can obscure both inputs and outputs to render Bitcoin transactions anonymous.
Bitcoin as insurance policy against currency curbs
Over the past year and a half, since early 2016, high profile and institutional investors have begun to perceive Bitcoin as a safe haven asset or digital gold. Hence, investors in China, the US and Japan have begun to rely on Bitcoin to protect themselves against abrupt financial troubles or currency curbs, essentially using Bitcoin as a wealth management product (WMP).
Such reliance and dependence on Bitcoin has led to a surge in the demand for Bitcoin and granted Bitcoin another identity apart from its primary identity of digital currency and digital cash. This was outlined by Bitcoin creator Satoshi Nakamoto in the Bitcoin white paper.
Palihapitiya also commented on the comparison between digital asset Ethereum and Bitcoin, when he was asked why he personally prefers Bitcoin over Ethereum.
“Coke v Pepsi. Pick the more mainstream option that more people can easily consume. Both will make money but bigger is always better.”
Simply put, Palihapitiya explained that Bitcoin has the resources and market to achieve mainstream adoption ahead of Ethereum.