I might have to eat some crow here. A couple years ago, when Bitcoin became something that people who weren’t hackers and didn’t spend time on IRCchat knew about, I looked into it and came to the conclusion that it was a Ponzi scheme. I mean, I have no problem with digital convertible currencies; at their height, Lindens had a better value than Bitcoins do now, and I know some people still give Karma cards. But the whole concept behind Bitcoin seemed designed to be your traditional ponzi – build it by promising each new miner that it would be valuable, then slam the door.
But that hasn’t happened.
And in internet time, those two years are forEVER.
Last week the total value of the Bitcoin in circulation crossed the billion-dollar mark. It’s, as TechCrunch says, the world’s most popular controversial crypto-currency.
I’ve long expected a viable digital currency to show up, and it needed to be one that, unlike Lindens, didn’t require people to belong to a virtual world or game world. Is it really going to be Bitcoin? With more startups and social sites accepting Bitcoin, it’s looking good. WordPress, where you are reading this blog, accepts it. Reddit, which is the information version of Silk Road (get your misogyny and pedophilia at the first and your drugs at the second) accepts it, of course. Lord knows I am starting to really really hate PayPal, to the point that I might even consider Bitcoin as an alternative (except that my landlord and utilities accept PayPal and don’t – yet – accept Bitcoin).
But it’s not just about me, or the type of startups who share their collective bedbugs at SXSW. I occasionally consult with federal government and law enforcement types, and I have to explain how useful Bitcoin is for people who want to stay off the grid. Or rather, since Bitcoin is pure grid, who don’t want their money movements tied to their meatspace identity. As a geek I hate the idea that the government (any government) is going to come in and regulate it, but I don’t see how they can resist.
Hell, maybe since Cypriots (and the Russians who loved their banks) can’t really use their national banking system at the moment, they’ll be the first country to shift en masse from the Euro to the Bitcoin.