Hong Kong has been engulfed in a series of protests as tensions over its relationship with Mainland China have been inflamed by recent proposed extradition legislation to the Mainland. Protests have continued for a tenth straight weekend and at the arrival hall of the International Airport, a sit-in of protesters dressed in black now greets visitors.
In many ways, Hong Kong has become a futuristic 21st century site for protests. Protesters are using lasers to shine through tear gas and to try to confuse and distract police officers on the other side. Telegram was attacked by Chinese servers in a denial-of-service attempt, as protesters using the app to organize found themselves monitored and arrested even if they were only virtual participants. And young protesters refused to use a centralized form of payment (Octopus) because they feared leaving a trail of data for the Hong Kong government to be able to tag who was participating in protests or not, all in the backdrop of a dystopian fear of facial recognition.
Cryptocurrencies and Bitcoin were built to address several of the most pressing points in the Hong Kong protests, which are at the forefront of what it means to protest against a state equipped with all of the sophisticated technologies of the 21st century and the unrestrained ability to weaponize those capabilities against its citizenry.
Many cryptocurrencies are moving towards enabling transactional anonymity, and a host of tools exist to make it easier to anonymize transactions. Monero and Zcash were built with those principles in mind — a trait built in foresight for an age where dissidents fear being recognized by a central entity. This has led to a premium in cryptocurrencies traded with Hong Kong dollars.
Initially, as protests broke out around mid-June, Bitcoin traded at about a $160 USD premium on TideBit, a Hong Kong based exchange. As protests have worn on, that premium still persists, with the latest price of Bitcoin on TideBit at $11477.34 USD, about $80 USD higher than the current rate on Coinmarketcap. This is not altogether uncommon on Asian exchanges, especially ones that are trading in uncommon currency pairs which may face some capital controls (Korean-based exchanges that trade in Korean Won, for example, typically see large price premiums from the average global rate) — yet it does show a continuing demand for Bitcoin in Hong Kong.
Bitcoin itself has seen a surge since June 9th, the largest public protest in Hong Kong’s history. From about $8,000 USD, it now sits close to $11,300 USD, an increase of about 41.25%. With Bitcoin/Chinese Yuan pairs trading at a premium and the broader US-China trade war in the background, as well as a ton of other factors built in to the ambiguous mess that is Bitcoin pricing, there’s not as much you can read into the tea leaves — but it’s certainly true that as protests in Hong Kong have surged, so has demand for Bitcoin and cryptocurrencies in general.
Bitcoin is built to be a distributed datastore with no central ownership or censorship. No state, without an extraordinary investment in computing power, can control transactions between Bitcoin addresses. There is no ability to censor monetary movements between different users, even if they may be regarded as a dissident by one state or another — and it is difficult to collect raw data categories beyond what members of the public would know is accessible through public explorers and aggregative analyzers.
This helps allay the concerns many protesters have with their current payments systems. Cryptocurrencies have many of the same convenient features as digital cash, but much less of the downsides of centralized control and surveillance.
With about 39 Bitcoin/crypto ATMs servicing the Hong Kong area and Pundi X putting Point-of-Sale devices in local restaurants, allowing for the easy spend of Bitcoin and cryptocurrencies, Hong Kong has always been forward-facing when it comes to cryptocurrencies. Cryptocurrencies are part of the “one country, two systems” tension that has made Hong Kong uniquely positioned to take advantage of the fact that it is not a subject to the cryptocurrency ban in mainland China.
Residents of Mainland China cannot trade in Bitcoin or other cryptocurrencies on exchanges, and neither can companies in Mainland China raise funds through initial coin offerings. Meanwhile, cryptocurrencies are thriving in Hong Kong.
While this may not offer the same level of tension as the political nature of Hong Kong nominations (which must be vetted by the Mainland) or proposed legislation, since shelved, that would have helped extradite prisoners to the Mainland, it is once again another reminder of the separate and unique nature of Hong Kong’s governance — and something that might be lost if Hong Kong’s structure were further collapsed and placed into Mainland China, where the system is designed for all power to flow upwards to the central confines of the Chinese Communist Party’s Politburo Standing Committee.
So as a dystopian cat-and-mouse game emerges in Hong Kong, with a technologically sophisticated police chasing protesters for their faces, a refusal to use centralized digital cash, and arrests of protesters for their participations in virtual forums and state-mounted attacks on communications apps — cryptocurrency has quite a role to play in what may be the opening act of the dystopian, cyberpunk protests of the future.