With bitcoin’s meteoric rise, now again flirting with $110,000, it’s back to dominating headlines. We’re hearing that it’s a win for decentralization, a big old middle finger to legacy finance, even the key to real financial freedom. I cannot avoid asking the question, are we really setting ourselves free, or are we only creating different fetters.

Does Bitcoin Really Empower Everyone?

The story line depicts Bitcoin as the escape hatch for the little guy, escaping the control of the Wall Street overlords. And while it's true that anyone with an internet connection can buy Bitcoin, that 'can' is doing a lot of heavy lifting.

Think about it. As we know, the digital divide is very much a reality — particularly in developing countries. How many residents in Accra even have consistent internet access? How many have the financial literacy required to understand the inherent challenges and pitfalls with engaging in cryptocurrency? Is Bitcoin really giving power to the people on the fringe? Or is it just advantageous for the people who were already better resourced and informed to begin with?

  • Accessibility: Does everyone have equal access?
  • Literacy: Are people equipped to understand the risks?
  • Volatility: Can vulnerable populations withstand the swings?

I'm not convinced that Bitcoin is the great equalizer we're led to believe. It’s more like a high-risk, speculative financial instrument, complete with all of the inequalities that such an instrument carries. Some folks will get really rich, a lot of others are going to get burned and the underlying, rotten, power structures will be left mostly unchallenged.

Who Really Controls Decentralization?

The core of Bitcoin’s allure is that it is decentralized. No central bank, no government control. But let's be honest with ourselves: is Bitcoin truly decentralized? Or did we just move power from one group of institutions to another?

Or take the example of huge mining pools that process and validate transactions. They wield significant power over the network. Imagine if a mere handful of these pools decided to collude. What of these crypto whales, the people or companies that own large swathes of Bitcoin. Yet their actions can, and do, move the market in ways that adversely affect the smaller investor.

We, as a community, see these power dynamics play out in real-time. Do you recall the story of the $323 million short liquidation bonanza in crypto just a few weeks ago? Bitcoin accounted for $196 million of that. Others see this as an indicator of bullish FOMO. To me, though, it’s a loud siren telling us how volatile the market can be and that it can be easily manipulated. Who benefits most from these liquidations? Certainly not the average retail investor. The house always wins, doesn't it?

This new concentration of power is not decentralization. It is a re-centralization of decision-making to a different elite.

Environmental Cost: Freedom At What Price?

This is the unexpected connection. As everyone continues to get distracted by the price tickers, what about ESG? Bitcoin's energy consumption is staggering. Yet all that “decentralized freedom” is underpinned by gigantic server farms, chugging down enough electricity to power entire countries and exacerbating climate change.

Is this the right vision of freedom? One built at the peril of our planet? It's easy to get caught up in the excitement of rising prices and potential riches, but we can't ignore the bigger picture.

We are creating a system where the pursuit of individual financial freedom comes at the cost of collective environmental responsibility, particularly in regions already vulnerable to climate change. That’s just the cold, hard truth that we all need to accept.

I'm not saying Bitcoin is inherently evil. We should have a more forthright discussion about what it’s really costing—from monetary to environmental benefits. This tool might not be the radical breakthrough for liberation that it’s being hailed as. Or is it just a different kind of leash, deceptively packaged as liberation? The answer, I suspect, is much more complicated than we’re comfortable conceding. The dream of going all the way up to $120,000 is pretty alluring. We need to remind ourselves to look at the larger landscape.