In Cryptography We Trust?

// Posted by on 04/20/2014 (8:46 PM)


This month’s Wired issue was the first time I’ve ever heard of this online currency called bitcoin.  It is definitely a hard concept to wrap my head around.  It is taking our concept of currency and doing a full 360.  Everything is virtual, your currency and your wallet and then there are no banks or countries tied to your money.  It allows you to make purchases anonymously and across country borders with no problems.  This currency is not tied to a government or any rules.  It’s motto is: ”Libertas, Aequitas, Veritas” or in English: Trust, Justice, Freedom.  It is a libertarian’s ideal, unregulated currency.  There is no government or regulatory body scrutinizing your purchases or charging fees for your usage.  However that is on the very idealist side of the idea. The problem stems from this idea of anonymity and from the lack of any type of insurance on this type of money.

What I immediately thought of when reading about bitcoin was Poster’s ideas of the netizen and the movement away from countries and certain cultures to a global culture.  This idea of bitcoin as a currency goes along perfectly with Poster’s thoughts.  The fact that this acts as a currency with no national regulation where users of this currency have no boundaries between countries is exactly on par with the idea of the netizen.  The Internet is maybe slowly allowing this world to become less divided.

The thing is as there were problems with the netizen and regulatiosn were imposed on many country’s internet usage these same problems exist with bitcoin.  Many people refrain from using bitcoin because of it’s lack of protection on the money a user holds in their cyber-wallet.  A simple virus or hacker could easily erase everything invested in this currency.  Along with this is the idea that bitcoin attracts illegal activity through it’s anonymity.   As discussed in Wired a solution proposed is Coinbase wallets that would hope to prove that bitcoin is willing to impose rules and strict controls to keep out money launderers.  It also links your bitcoins to your bank account to allow for easier purchase of bitcoins.

This idea of bitcoin could be revolutionary.  While bitcoin is currently only used by a small amount of people—it is growing.  Start ups are flocking toward bitcoin and it’s revolutionary potential.  It is also a selling point for many companies—accepting bitcoin can be a marketing tool and attract different customers.  The reality of the situation is different though.  I have never heard of this currency before the other day and it doesn’t seem as though the public is jumping on board.  It feels a bit sketchy and risky at the same time.  While it definitely holds potential there is much to be done.  Will it one day grow to universal size?  It’s libertarian idealism is appealing to many but will regulations one day squash this idealism?  There seems to be a thin line with this idea and whether it will have commercial success rides on many factors.

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