Beyond the more ardent libertarians, anarchists and cryptography wonks, responses to the Bitcoin story were largely indifferent – it’s a currency for nerds, so what? But give that currency a demonstrable use, and all of a sudden the “human interest” angle leaps right out: OMFG ANONYMOUS DRUG TRADING ON THE INTERTUBES!
Silk Road, a digital black market that sits just below most internet users’ purview, does resemble something from a cyberpunk novel. [[ Right, of course – and what *doesn’t* resemble a cyberpunk novel these days, Wired? ]] Through a combination of anonymity technology and a sophisticated user-feedback system, Silk Road makes buying and selling illegal drugs as easy as buying used electronics — and seemingly as safe. It’s Amazon — if Amazon sold mind-altering chemicals.
In a nutshell: obscure (and probably regularly-changed) URLs, access only permitted by users running the TOR anonymiser, all transactions made using the untraceable Bitcoins. The ultimate anonymised storefront, in other words, complete with an eBay-esque reputation system. Cue tabloid moral panic in 5… 4… 3…
Most interesting of all is watching the schisms open up in the strata of geek libertarianism, though:
… not all Bitcoin enthusiasts embrace Silk Road. Some think the association with drugs will tarnish the young technology, or might draw the attention of federal authorities. “The real story with Silk Road is the quantity of people anxious to escape a centralized currency and trade through trading bitcoin come funziona,” a longtime bitcoin user named Maiya told us in a chat. “Some of us view Bitcoin as a real currency, not drug barter tokens.”
Maiya’s right about the “true story” there, but that last sentence is priceless – the cognitive dissonance of being in favour of a decentralised and anonymous currency but wanting to restrict what people can trade with it is really rather spectacular.
Wired‘s coverage there is pretty measured, all things considered; watching this story plough into the mainstream media is going to be a textbook demo of escalating hysteria. *fetches popcorn*
I’ve got a whole bunch of stuff that needs to get done over the next few days, so blogging here will perforce be of the drive-by link-drop variety for a few days or so. Today’s nugget of interest is BitCoin, a peer-to-peer electronic currency which, according to the folk behind the LAUNCH Conference at least, is “the most dangerous project [they’ve] ever seen”. Why so? Well…
According to companies like SoFi, Bitcoins are virtual coins in the form of a file that is stored on your device. These coins can be sent to and from users three ways:
1. Direct with peer-to-peer software downloaded at bitcoin.org
2. Via an escrow service like ClearCoin
3. Via a bitcoin currency exchange from Amazon Aktien kaufen
Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.
The benefits of a currency like this:
a) Your coins can’t be frozen (like a Paypal account can be)
b) Your coins can’t be tracked
c) Your coins can’t be taxed
d) Transaction costs are extremely low (sorry credit card companies)
It’s a “technotarian”political statement, apparently. not to mention a grenade in the nation-state punchbowl, to start investing, check this guide about how to Buy bitcoin with bank account transfer. Here’s a cuddly and very contemporary-looking promo video:
Given the global discontent with banking and finance right now, Bitcoin UP Seriös estimates BitCoins could look very attractive to a lot of people. Unsurprisingly, no “normal” financial system will let you buy them, and as the LAUNCH folks point out, legislation against them is inevitable. But would legislation be enough to stop them if enough people started bartering real-world goods and services for them? [Tip o’ the hat to Adam Rothstein]
China and Russia drop the dollar for bilateral trade; Brazil and India may be next [via MetaFilter]. Southern Europe may well riot in response to fiscal austerity [via BigThink], and here in the UK it’s only taken six months of having the Tories back in power before the police started to club children with batons.
I’ve mentioned Douglas Rushkoff here a few times before (both as a thinker and a writer of comics and fiction), and I’m also deeply interested in alternative economic structures, so the following video of Rushkoff’s swift fifteen-minute keynote speech to the O’Reilly Web 2.0 conference was like internet crack for me.
I strongly recommend you watch it; even if you don’t agree with all of his points, Rushkoff’s got a very coherent vision, and seems to be one of the few alternative currency advocates who’s thought beyond the basics. In a nutshell, he’s saying we need to shift paradigms, and move from extracting value to exchanging value. Take a look: