Bitcoin and the Limits of Transparency: Institutional Corruption
The common narrative points the finger at the corruption of financial and political institutions, as if it were an external evil. Bitcoin, as a trustless system, eliminates the need to trust a corruptible intermediary. However, corruption is a deeper and more pervasive phenomenon: it is not just bribery, but cronyism, opacity in public tenders, mismanagement of public affairs, chronic inefficiency. Bitcoin can make it harder, for example, to print money to fund cronyistic public works, but it cannot prevent a ruling class from allocating resources (now in bitcoin) in an equally inefficient or corrupt manner. It can prevent monetary inflation as a form of hidden taxation, but it does not replace the need for transparent institutions, the rule of law, and an active citizenry. It solves a powerful tool of systemic corruption (fiat currency), but it does not eradicate the human tendency for corruption itself, which would simply find other avenues for expression if the institutional context remains rotten.
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