Big banks vs. Bitcoin libertarianism
March 25, 2013
Banks should learn to work with, rather than against, the new role of money in a peer-to-peer landscape, says media theorist and author Douglas Rushkoff writes on Mashable, based on the arguments of his new book, Present Shock: When Everything Happens Now.
But many libertarians* would rather bypass, not work with banks.
At a Thursday afternoon all-time-high valuation of $72 per Bitcoin, there were around $700 million worth of Bitcoins in circulation. People are using Bitcoins to buy real goods and services, to hedge against European financial calamity, and to score drugs.
Feds step in
One can fairly say that Bitcoin came of age. On Monday, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) released its first “guidance” as to how “de-centralized virtual currencies” should fit into the larger regulatory regime under which currencies of all kinds are required to operate.
The word “Bitcoin” is never mentioned in FinCEN’s release, but that’s just a technicality. Everyone in the Bitcoin community knew who the guidance was aimed at. Bitcoin is a big boy now. The State is paying attention.
But not everyone is cheering the news. Bitcoin is a currency with an ideology. From the beginning, Bitcoin was envisioned as a form of monetary exchange that didn’t need third-party financial institutions or central banks or even governments to validate it or back it up.
Bitcoin is the fulfillment of a libertarian dream: a currency created out of the workings of the free market, unaffiliated with any state authority, respectful and protective of user privacy and anonymity, and designed to resist inflationary pressures. By its very nature, Bitcoin is made for people who don’t want other people to know what they are doing.
* Lifeboat Foundation’s libertarian Eric Klien says the foundation has launched the world’s first bitcoin endowment fund.