Hong Kong has become the epicenter of political turmoil as citizens’ lives are being nothing short of invaded by the government. There have been demonstrations ongoing for weeks. As the Special Administrative Region (SAR) is being shaken, businesses are reportedly turning down the Hong Kong dollar in favor of Bitcoin. But is that a safe bet amid the political turmoil?
Businesses Turn to Bitcoin in Hong Kong
Reports have it that businesses are turning down the Hong Kong dollar in favor of Bitcoin as a means of taking a stand against their imperialistic government.
Indeed, looking at the HKD/USD chart, we can see that since July, the Hong Kong dollar has been declining against the US dollar.
We’ve already seen that Bitcoin performs well in times of political and economic uncertainty. As CryptoPotato reported earlier in August, Bitcoin surged $700 as trade tensions between China and the U.S. rose to a new level when President Trump imposed yet another 10% tariff on $300 billion worth of Chinese goods.
However, given the seriousness of the situation and Bitcoin’s pseudonymous nature, the question is whether using it is literally safe.
Bitcoin’s Pseudonymous Nature
Contrary to what most people believe, Bitcoin is not anonymous – at least not in the sense of providing complete anonymity.
While no KYC is required for users to transact over the network, users still have identifiers. The most common is one’s Bitcoin address, the one that you use to send and receive bitcoins. If at any point in time this address is somehow linked to you, all the transactions going in and out of it will also be linked to you. And since Bitcoin runs on an immutable ledger, all transactions are permanently listed there and everyone can access them.
The issue is when people start using exchanges in order to buy or sell Bitcoin. All regulated exchanges require users to go through thorough KYC procedures in which they must provide essential personal information. Hence, it’s entirely possible for someone to track down one’s identity, even if they use Bitcoin.
Given the political tensions in Hong Kong, one wonders whether it is actually safe for business owners to turn to Bitcoin.