24-06-2011, 03:08 PM
The Wikileaks of Money
Posted on June 24, 2011 by stacyherbert| 63 Comments
The Wikileaks of Money
My first response to hearing about Bitcoins was a curiosity in the peer to peer, decentralised nature of the currency. And thank god! perhaps a replacement to having to use Paypal!!?
For something that few had heard of a month ago, the online currency Bitcoin tends to elicit pretty strong responses. Depending on whom you ask, Bitcoin is the "future of money," a "crypto-geek Ponzi scheme," an "online form of money laundering," or a tool for "libertarian hipsters and criminals."
What I was not expecting at all was the violent response to even the very idea of Bitcoins. The reaction has been more violent than any other single topic we have ever discussed. This power of Bitcoin to inspire so much passion, however, made me even more curious to know more about it. Perhaps I would have forgotten about it after our interview with Jon Matonis, but I want to find the source of the terror the crypto-currency inspires.
The publicity has not been kind to Bitcoin, which has faced attacks from law enforcement, hackers, and cybercriminals alike. The currency's value has seen several sharp fluctuations. Early supporters appear to have lost confidence, and U.S. lawmakers are starting to ask tough questions. But shutting down Bitcoin may prove more difficult than its critics hope. And whether or not the experiment succeeds, its rise may herald the emergence of a new form of decentralized currency trading.
Most gold and silver bugs claim to be Libertarians and yet here they are on the side of Schumer and law enforcement doing all they can in a Salem Witch Hunt like manner to keep others from freely choosing their own currency. What could so unite goldbugs and Wall Street's man in the Senate, Chuck Schumer? Or silverbugs with law enforcement?
As a gold and silver bug myself with 98% of my savings in both of the metals, I experienced none of this violent reaction to bitcoin. I didn't see it as an existential threat as apparently others do. Nor did I have a violent desire to stop others from transacting in this new currency. On the contrary, I watch people like Rick Falkvinge with fascination waiting to see whether or not the currency succeeds. If people want to speculate in it (or cabbage patch dolls, or dotcom shares, or McMansions) and lose all their wealth, well then that's their own (stupid) choice. If bitcoins succeed or fail, I don't see how that is a threat to my own personal savings or existence. It's just another currency among hundreds, if not thousands, currently operating in the world.
So what to make of this unique terror that Bitcoin inspires? Over dinner in Paris last week, we talked a bit to Steve Keen about bitcoins. Based on just my description, his biggest problem with it was that deflation is built into the model and this can't be a good thing on which to run an economy. When I described to him the violent response I've seen against it, he said that anything can be a currency if the two parties to a transaction agree that unit to be a currency. Whether bellybutton lint in ancient China or paper dollars or euros today. Or the WAT system, the p2p currency system in Japan. Or Switzerland's WIR Bank, which has operated since 1934 and continues to operate to this day, transacting the equivalent of CHF 1.65 billion annually.
But even if Bitcoin fails, it would probably be a mistake to discount its 15 minutes of fame as a complete fluke. Just as Napster begat BitTorrent and MediaFire, Bitcoin has demonstrated a model for how a non-state-sanctioned, peer-to-peer electronic currency system could work. It may not be "the one," as its advocates hoped, but other innovators are sure to tinker with the formula, improving security and usability.
After 5000 years of others trying, you can be certain it will never be a replacement for gold and silver, which, yes, is still going to $500. But for all those who do not wish to be slaves to paypal and visa (as apparently many gold and silver bugs are evidently happy to be) well you should all hope this seed of an idea for a genuinely decentralised, non state sanctioned, command and control currency takes root and gives birth to a true online free currency in which it doesn't cost 5% to transact.
Posted on June 24, 2011 by stacyherbert| 63 Comments
The Wikileaks of Money
My first response to hearing about Bitcoins was a curiosity in the peer to peer, decentralised nature of the currency. And thank god! perhaps a replacement to having to use Paypal!!?
For something that few had heard of a month ago, the online currency Bitcoin tends to elicit pretty strong responses. Depending on whom you ask, Bitcoin is the "future of money," a "crypto-geek Ponzi scheme," an "online form of money laundering," or a tool for "libertarian hipsters and criminals."
What I was not expecting at all was the violent response to even the very idea of Bitcoins. The reaction has been more violent than any other single topic we have ever discussed. This power of Bitcoin to inspire so much passion, however, made me even more curious to know more about it. Perhaps I would have forgotten about it after our interview with Jon Matonis, but I want to find the source of the terror the crypto-currency inspires.
The publicity has not been kind to Bitcoin, which has faced attacks from law enforcement, hackers, and cybercriminals alike. The currency's value has seen several sharp fluctuations. Early supporters appear to have lost confidence, and U.S. lawmakers are starting to ask tough questions. But shutting down Bitcoin may prove more difficult than its critics hope. And whether or not the experiment succeeds, its rise may herald the emergence of a new form of decentralized currency trading.
Most gold and silver bugs claim to be Libertarians and yet here they are on the side of Schumer and law enforcement doing all they can in a Salem Witch Hunt like manner to keep others from freely choosing their own currency. What could so unite goldbugs and Wall Street's man in the Senate, Chuck Schumer? Or silverbugs with law enforcement?
As a gold and silver bug myself with 98% of my savings in both of the metals, I experienced none of this violent reaction to bitcoin. I didn't see it as an existential threat as apparently others do. Nor did I have a violent desire to stop others from transacting in this new currency. On the contrary, I watch people like Rick Falkvinge with fascination waiting to see whether or not the currency succeeds. If people want to speculate in it (or cabbage patch dolls, or dotcom shares, or McMansions) and lose all their wealth, well then that's their own (stupid) choice. If bitcoins succeed or fail, I don't see how that is a threat to my own personal savings or existence. It's just another currency among hundreds, if not thousands, currently operating in the world.
So what to make of this unique terror that Bitcoin inspires? Over dinner in Paris last week, we talked a bit to Steve Keen about bitcoins. Based on just my description, his biggest problem with it was that deflation is built into the model and this can't be a good thing on which to run an economy. When I described to him the violent response I've seen against it, he said that anything can be a currency if the two parties to a transaction agree that unit to be a currency. Whether bellybutton lint in ancient China or paper dollars or euros today. Or the WAT system, the p2p currency system in Japan. Or Switzerland's WIR Bank, which has operated since 1934 and continues to operate to this day, transacting the equivalent of CHF 1.65 billion annually.
But even if Bitcoin fails, it would probably be a mistake to discount its 15 minutes of fame as a complete fluke. Just as Napster begat BitTorrent and MediaFire, Bitcoin has demonstrated a model for how a non-state-sanctioned, peer-to-peer electronic currency system could work. It may not be "the one," as its advocates hoped, but other innovators are sure to tinker with the formula, improving security and usability.
After 5000 years of others trying, you can be certain it will never be a replacement for gold and silver, which, yes, is still going to $500. But for all those who do not wish to be slaves to paypal and visa (as apparently many gold and silver bugs are evidently happy to be) well you should all hope this seed of an idea for a genuinely decentralised, non state sanctioned, command and control currency takes root and gives birth to a true online free currency in which it doesn't cost 5% to transact.
"Let me issue and control a nation's money and I care not who writes the laws. - Mayer Rothschild
"Civil disobedience is not our problem. Our problem is civil obedience! People are obedient in the face of poverty, starvation, stupidity, war, and cruelty. Our problem is that grand thieves are running the country. That's our problem!" - Howard Zinn
"If there is no struggle there is no progress. Power concedes nothing without a demand. It never did and never will" - Frederick Douglass
"Civil disobedience is not our problem. Our problem is civil obedience! People are obedient in the face of poverty, starvation, stupidity, war, and cruelty. Our problem is that grand thieves are running the country. That's our problem!" - Howard Zinn
"If there is no struggle there is no progress. Power concedes nothing without a demand. It never did and never will" - Frederick Douglass