Tags: Bitcoin | delusion | currency | virtual

American Banker: Allure of Bitcoin Is a Delusion

By Michael Kling   |   Tuesday, 19 Nov 2013 12:48 PM

Bitcoin adherents believe the digital currency offers a way for the masses to overcome the evil monetary oppression of the evil central bankers and create a better, decentralized world.

It's all a fantasy, argues one digital currency expert in an article for American Banker.

Gideon Samid, chief technology officer for BitMint, which is testing electronic money, compares the Bitcoin faith to communism: Both are hopelessly idealistic.

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Both the Communist Manifesto by Karl Marx and the paper, "Bitcoin: A Peer-to-Peer Electronic Cash System" published by Satoshi Nakamoto in 2009, invoked the same deep seated, noble desires for a better world, a fair society, freedom from oppression, triumph of the masses, defeat of the elitists," Samid says.

Much like communists of the last century, Bitcoin true-believers will risk life and limb to pursue their dream, he predicts. They will go underground and follow a Bitcoin Lenin to their "decentralized money promised land." Then a Bitcoin Stalin will dictate new rules that replicate the same central bank control their rebellion had intended to end.

"What doomed communism, and will likely undermine Bitcoin, is the delusional hope that a protocol, a procedure, a network, an algorithm can neutralize the ugly selfish traits of human beings," he says. "Somehow, wrath, greed, sloth, pride, lust, envy, and gluttony disrupt the fairytale dreams of the true believers."

Ordinary people are unaware of the currency's cryptographic and network shortfalls that call for revisions or even more substantial changes. Who will make those changes to the supposedly decentralized currency for the people? Competing camps may emerge, backing new and different Bitcoin versions.

"And as more and more Bitcoin millionaires, and powerful shady and criminal figures exploit the new hard-to-follow currency," Samid warns, "the incentive to play dirty against detractors will rise to mafia levels, all in the name of the ideal of fair money."

Acceptance of Bitcoins is growing despite concerns of Samid and others. Its value jumped after the Department of Justice called it a "legal means of exchange" at a Congressional hearing, according to Bloomberg.

"We all recognize that virtual currencies, in and of themselves, are not illegal," Mythili Raman, a Justice Department official, told the Senate's Homeland Security and Governmental Affairs Committee. "We are nimble enough and aggressive enough to be able to combat the threat. We are up to the challenge."

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