Bitcoin Scandals Fail to Dampen Bitcoin’s Appeal
National Geographic ran a fairly evenhanded story that pointed out that “Bitcoins may change the global economy.” The thrust of the story was that in spite of frequent Bitcoin scandals – the most recent being the shut down and seizure of Silk Road – the Bitcoin currency continues to “blossom.”
The story states, “After the feds seized and shuttered Silk Road, an online marketplace for illegal drugs, earlier this month, some technology experts started sounding the death knell for Bitcoin, Silk Road’s international currency of choice. Instead, we may soon see Bitcoin’s real value.
Invented in 2008, Bitcoin is not the first attempt at an all-digital, cryptographically based currency. Others have existed in one form or another for nearly fifty years, but have either failed to take off or dramatically crashed and burned. Bitcoin is the first cryptocurrency with the deep structure, wide adoption, and trading momentum to achieve escape velocity.
In practice, Bitcoin blends credit cards’ ease of digital transfer with the relative anonymity of a cash handoff. Like all currencies, the problems it poses are both practical and metaphysical; like cash or credit, Bitcoin is somehow both more and less real than the goods it is traded for.
Until now, the most well-known of these goods have been illegal drugs, like those on Silk Road. But the drug marketplace’s shutdown gives Bitcoin a chance to gain some much-needed legitimacy. “It’s a watershed moment for Bitcoin,” Marco Santori, the chairman of the regulatory-affairs committee of the Bitcoin Foundation, told The New Yorker. “Bitcoin’s PR problem, with which it has struggled for the last year or so, is being addressed in a very direct way.”
Bitcoin’s future potential was a hot topic this week at emTech, an MIT conference on emerging technologies. In a panel hosted by MIT Technology Review’s Tom Simonite, MIT economist David Johnson and BitPay CEO Stephen Pair discussed Bitcoin’s complex relationship with paper currencies, credit, and state authority.”