MY YEAR WITH BITCOIN
By Joe Kent, Secretary of the Maui Libertarian Party

 

About a year ago, I was at a Ron Paul rally, and I saw a little booth with a bunch of people crowding around
it. Tiny little coins with holograms were being sold for about $20 each, called “Bitcoins”. I immediately
thought it was some kind of scam, and kept walking.
Then, last May, I heard about it again. The price jumped up to $100. As of this writing (November 2013), the
price has jumped to $1200, and it's still rising.
What are Bitcoins, and why are they becoming so valuable?
Well, a Bitcoin is virtual money. It's a digital currency.  There
have been lots of attempts at virtual money over the years. First
there was e-gold which was a complete failure. The problem
with e-gold was that it could be inflated. Much like the Federal
Reserve can print more money, programmers could just program
more e-gold. It was a scam from the beginning, and it flopped.
But Bitcoins are different.  Bitcoin is open source -- everybody
can see the code.  And the code says that there can only ever be
21 million Bitcoins. It can never be inflated.
Beyond that, Bitcoins behave just like money. They're easy to
carry around (it works with your smart phone). And they can be
transferred easily from smart phone to smart phone. More and
more businesses are beginning to accept Bitcoins for payment.
At a Subway chain in Canada, you can buy a sandwich with
your Bitcoin.  
Should you buy Bitcoins? Well, that depends. Right now, the virtual currency market is still in its infancy
stage. Wild swings can make the price jump from $1000 to $1200 in a matter of minutes. Also, there might
be problems with the currency. Although no one has discovered any problems (it is so far, invulnerable to
hackers), there could be problems in the future.
Finally, the government is skeptical about Bitcoins. A virtual currency means that the government can't
tax it. It can't control it, and it can't inflate it. And the strength of all governments rely on their ability to
control the money.
This month there was a hearing on Capitol Hill about Bitcoins. Politicians debated endlessly about what should be done about the virtual money. Can we regulate it? Can we control it? Should we ban it? But at the end of the day, the politicians didn't see it as enough of a threat. Besides, many of them had already bought Bitcoins themselves. Will Bitcoin be the currency of the future? Who knows? All I know is, it's a neat experiment in a truly libertarian currency. A currency of freedom.