Scouring the internet for snippets of news about Bitcoin over the last few days has revealed an interesting trend. Much of the traditional media focuses on a few things in their articles: Bitcoin is technical and mysterious, and it is often used to do illegal things like dodge taxes and buy guns or drugs. To be sure, there is almost always a tip of the hat to the positive possibilities of a new currency, but the prevailing sense is that Bitcoin will eventually fail.
There is nothing strange about that response. Of course there will be naysayers. Of course they will predict the early, or late, demise of Bitcoin. On the other hand, the world has transformed so much in just the few short decades that I have been alive, in ways that we could never have predicted when I was a boy, that it is inconceivable that the world will not continue to evolve.
It seems like the right time for something like Bitcoin to rise and perhaps give those in power, those who have grown too fat and complacent, something to think about. As someone who hopes to document the history of Bitcoin, it does seem fair for me not merely to be a propagandist touting the good and ignoring the bad. It is my intention here to call out bad-actors when I find them. Even if Bitcoin operates somewhat outside the reach of governments and corporations, it will still need to have rules of the road. A sense of community can provide that and I hope to be one of those who give Bitcoin that community.
And now, on to the Roundup. About a week ago, Max Keiser wrote a piece that suggested that one of Bitcoin’s big vulnerabilities to government action is in the exchanges. Without exchanges, there would be no good way to value the worth of a bitcoin. Governments could severely hamper the effectiveness of Bitcoin simply by shutting down these exchanges. Of course, there will always be attempts to set up dark exchanges using Tor or some equivalent, but operating in the light of day will be best for all and Keiser calls for the creation of an extra-governmental exchange that will let the whole Bitcoin world where to peg the value of their bitcoins.
This article on Engadget has a few interesting pieces of news: First, they bring up the babysitter conundrum brought up by Paul Krugman. In this scenario, a group of babysitting households exchanged sitting privileges for script. What ended up happening is that demand became so great, that some houses hoarded the script until the economy collapsed. Krugman states that this will be the eventual fate of Bitcoin. On the other hand, the babysitting community was limited in scope. The Bitcoin community is growing every day. More and more stores are accepting Bitcoin and there is a likelihood that it will start to be used in some places on a regular basis, if it isn’t already. It is certain that the value of Bitcoin is going to have to grow, a lot, if it is going to survive as a currency. And it is certain that it is going to hit some peaks and valleys in that rise, but as long as there are pressures that make people want to use something like Bitcoin, for privacy or convenience or whatever, then it will bounce back.
The same article also mentions that Jeff Berwick and Zach Harvey have developed competing ATMs. I will be looking forward to learning more about this.
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They also mention that the US Treasury Department’s Financial Crimes Enforcement Network has issued a note stating that Bitcoin exchanges must register or face a penalty.