How Bitcoin Could Free Catalonia From Spain’s Dictate

 

This article was originally published at Cointelegraph.com by Pascal Thellmann

On October 1st, Catalan nationalists plan to hold a referendum on leaving Spain, and to declare independence if they win. However, a recent article from BBC indicates that the “Gobierno de España” will seize Catalan finances in the next 48 hours if the ‘illegal’ referendum vote is not brought to a halt immediately. This situation has brought Bitcoin into the spotlight as a potential solution to the conflict. In this brief article, CoinTelegraph will attempt to analyze how Bitcoin could free Catalonia from Spain’s mandate.

Why?

Cristóbal Montoro, Spain’s finance minister, said that a mechanism had been approved for the state to take control of Catalonia’s finances. The Spanish intend to take this step to prevent any public money being spent on the independence referendum.

The ministers also delivered an ultimatum for Mr Puigdemont – sign an agreement within 48hours that public funds will not be redirected for the referendum. If the deadline is not met, then the Spanish government will seize control of the part of the Catalonian budget destined for public services and salaries.

How?

Satoshi Nakamoto created Bitcoin right after central banks tanked the world economy and induced a year-long economic depression. The purpose of cryptocurrency is to serve as a tool for freedom, which is exactly what Catalonia is looking for right now.

In a decentralized financial system where every State/Autonomous community has full control over its finances through the use of cryptography and Blockchain, the central government wouldn’t be able to seize any funds. Catalonia‘s current situation is an interesting case study for how countries could adopt decentralized cryptocurrencies on a large scale.

Countries like Venezuela have proven, on a smaller scale, that Bitcoin is a viable solution for politically unstable regions. Although the situation in Catalonia is of a slightly different nature, some similarities can definitely be found.

What If?

According to Blockchain.info, there are currently 16.8 mln Bitcoin wallets in use. However, this number should be taken with a pinch of salt since a user can have as many wallets as he wants. Therefore, the actual number of people using Bitcoin is probably significantly lower than the total number of active wallets.

The autonomous region of Catalonia currently has around 7.5 mln inhabitants. In the unlikely event that Bitcoin was implemented as an immediate method of payment, the Bitcoin Blockchain would probably suffer from significant congestion and elevated transaction fees. This could complicate the transition for Catalonia to a decentralized financial system. Potential solutions to Bitcoin’s scalability issues, like Lightning Network, would help Bitcoin to take on such a large influx of users.

This article was originally published at Cointelegraph.com by Pascal Thellmann

2017-09-17T09:06:49+00:00

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