My conservative friend in Milwaukee called this morning to rub in another conservative victory, Justice Roggensack's reelection. But he was also excited about a new kind of virtual "money" catching on globally that could threaten world markets. A bit ironic, when you consider how conservatives have denounced any kind of world currency.
It's called bitcoin. What's that? Here's the quickest explanation I could dredge up.
Crunchbase: Bitcoin is a digital currency created in 2009 by Satoshi Nakamoto ...
designed to make use of the currency and to the peer-to-peer network formed by running that software.
Bitcoin avoids central authorities and issuers ... uses digital signatures and proof-of-work to provide basic security functions, such as ensuring that bitcoins can be spent only once per owner and only by the person who owns them. Bitcoins, often abbreviated as BTC, can be saved on a personal computer in the form of a wallet file or kept with a third party wallet service, and in either case bitcoins can be sent over the Internet to anyone with a Bitcoin address. The peer-to-peer topology and lack of central administration are features that make it infeasible for any authority (governmental or otherwise) to manipulate the quantity of bitcoins in circulation, thereby mitigating inflation.
Better yet, this wonderfully entertaining clip shows John Stossel as "the moderate," believe it or not. This should tell you something about bitcoin's global implications. Libertarian Reason Magazine's managing editor Katherine Mangu Ward casually welcomes utter chaos brought about by bitcoin. She happily accepts even the worst possible unintended consequence. Wacky fun.
If you can't watch the video, this Techcruch look should be enough to freak you out:
Techcrunch: Hang around in the tech industry long enough and you or someone you know will be heard saying, “that’s so crazy it just might work.” Today, Bitcoin officially became a crazy idea that’s actually working. Today, all the Bitcoin in circulation — some 10.9 million of them — have collectively crossed the billion-dollar mark.
The world’s most popular controversial crypto-currency, mind you. The black market marketplace known as Silk Road, which allows pretty much anyone to anonymously sell “alternative products” (i.e. large quantities of one’s drug of choice), uses Bitcoin for its currency. Something which hasn’t exactly helped Bitcoin’s “cross over” appeal.
What’s more, the government has finally realized that it needs to start taking virtual currency seriously and develop a strategy for dealing with these types of currencies.
Of course, the other side of the Bitcoin argument is that the confluence of unsteady financial markets, and skyrocketing growth of virtual currency (plus hype), is creating a perfect storm that equates to Bitcoin just being one giant bubble waiting to pop. There’s a good chance that a decentralized, unregulated market is going to scare the pants off the government once it’s fully cognizant that Bitcoin is a billion-dollar market — and growing. “It’s the easiest ‘this funds terrorism’ scare argument the government will ever try to make.
Either way, feel free to marvel at how a virtual currency that appeared practically out of the ether (created by some phantom mathematician/economist) just pulled a billion-dollar market out of its hat.
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