฿ is for Bitcoin

Unfortunately, I'm not the most adept in the inner-workings of our cryptography system. Apparently, however, the FBI just came down on the biggest online black market: the Silk Road.

Silk Road utilizes the online crypto-currency, "Bitcoin." Now, prior to this, I had not heard of Bitcoin but in passing references during our Computers and Society class. Of course, this is not because of Bitcoin's lack of notoriety, but my lack of awareness.

Anyway, the FBI filed a criminal complaint against Ross "Dead Pirate Roberts" Ulricht, the presumed founder and operator of the Silk Road, which, ironically, outlines the process of anonymizing one's self and engaging in Bitcoin for all to see. Despite this funny bit of irony, my happening upon this complaint greatly piqued my interest in Bitcoin. So, off I went to discover the world of Bitcoin, and what a world it is.

That's good enough for me.

Bitcoin is not money online -- it's online money. Whereas PayPal allows our physical currency to be used online, Bitcoin is a digital currency that only exists online. More importantly, it's decentralized, with no external proprietors and is entirely peer-to-peer, a core tenet of many idealized views of the Internet a la cyberlibertarians.

In examining the purpose of Bitcoin, I wondered "Why?" Why would we need decentralized money? In many respects, as I soon learned, the question should really be "Why not?" No taxes, no federal control, completely anonymous, and secure -- this is perhaps one of the better real-world manifestations to embody the cyberlibertarian ideology ever.

With the recent bust of Silk Road, it's evident that the aforementioned traits of Bitcoin -- the things that make it so appealing to those in support of a free Internet -- can, as with all things, be used for nefarious purposes (Yes, nefarious). The key phrase of the previous sentence is "as with all things." The use of Bitcoin in this bust is not a negative reflection on the digital currency itself.

The dollar, euro, pound, yen: All of these currencies have been the facilitator of illegal activity, ranging from drug cartels to black markets. Of course, "under the table" deals are commonplace, but there is federal regulation regarding these respective currencies. With Bitcoin, there is no regulation. This factor is an achievement for those in pursuit of cyber liberty but can be problematic with respect to the illicit activity that runs rampant. The Silk Road is only, I believe, one, albeit the biggest, of many online black markets in existence.

Regulation would certainly kill the essence of governmental liberation that Bitcoin represents. But with Bitcoin, much like physical currency, regulation can only reach so far. Other than giving the citizenry and officials false comfort, it would not be able to bar illegal transactions. Other than NSA cell phone surveillance, these things will happen. Classic investigation (although more advanced) is the solution to busting crime.

Now that I've discovered Bitcoin, I'm intrigued. I think that the exclusively digital currency is a fascinating way to elude the government, and it is completely legal. However, the recent Silk Road development certainly poses an interesting future for Bitcoin, as regulation may be on the horizon. If so, that certainly spells D-O-O-M for the Bitcoin-based economy that is so beloved amongst proponents of cyber liberty...

...and my Bitcoin Monster pictured above.