Believe it or not, government official can steal from you whenever they really want to. All that they need is some sort of excuse to justify the theft, it doesn’t really matter what, as long as there is something ‘illegal’ to accuse one of. Once an accusation has been leveled, the police are free to steal whatever it is that they like. And with more than 2.8 billion dollars seized in 2012 alone, it’s hard not to think that some innocent people were pulled in. That’s what happened to James Lieto when the Feds seized close to $400,000 dollars of his money. When your business takes a $400,000 loss–even if it is in the short-term and the funds are returned later, your business is simply going to fail because you do not have the needed capital to run your enterprise. The police can take your money for practically any reason, and there is little you can do about it.
Now many would retort with, “But not all cops are bad–we need them to take the bad things from the bad people.” Sure, but that is not what is being discuses, we are talking about people who use their roles as police officers and outdated laws to steal from people innocent people. I don’t care if guns were taken from 10,000 criminals–the good cannot outweigh the bad. That is why we were entitled with the fourth amendment to protect us from overarching authority. Sadly, the most of the bill of rights and constitution are wholly ignored in this country today, so there is little recourse. So what can one do?
Protect yourself with bitcoin and other digital currencies because they cannot be seized.
Digital currencies are protected by cryptographic algorithms like SHA-1 which means that there are two ways that you can take the money without authorization: through cracking the private key–which on a good day is about 2^63, which would take years to crack, or you can know the password. Because digital money exist exclusively on the internet, you simply cannot seize the funds. The protection that this can offer cannot be overstated when you are looking at your life’s work and savings being taken from you.
This also has far reaching ramifications for when tyrannical governments use their over reaching authority to restrict capital flows to defend their fledgling economies. In places like Venezuela, Argentina, and Iran–all of which have capital controls and rampant inflation (10%+), their citizens are getting poorer by the day because they cannot exchange their money for something stable and worthwhile. What we are seeing with digital currencies are market adjustment according to country and the currency that is being exchanged. Despite bitcoin being the same thing in the U.S. and Argentina, there are very different prices between where you are buying from. Currently it cost about 60% more to buy bitcoins with Argentinian Pesos over USD because of the inflation that the Argentina peso is seeing today, along with the capital controls that are in place. Bitcoin offers protection to people that want to flee from a currency that is clearly losing value, while also being able to get around capital controls.
In concluding, digital currencies offer protection from illegal government seizures. If you have any reason to fear government seizures, or even if you handle large amounts of cash regularly ($5,000+) you may want to consider putting some of your money into digital currencies to hedge against government seizures before you find yourself with no money, and no recourse to get it back.