Virtual Currency Bitcoin is Fascinating, Terrifying, Maybe The Future

Welcome to the thirteenth installment of Queer Your Tech with Fun, Autostraddle’s nerdy new tech column. Not everything we cover will be queer per se, but it will be about customizing this awesome technology you’ve got. Having it our way, expressing our appy selves just like we do with our identities. Here we can talk about anything from app recommendations to choosing a wireless printer to web sites you have to favorite to any other fun shit we can do with technology.

bitcoin-600x245

via thenextweb.com

Wouldn’t it be nice if you could invent money? When one of my co-workers told me about bitcoin, my jaw hit the floor. Because basically, that’s what bitcoin is. A programmer or team of programmers who goes/go by the name Satoshi Nakamoto did that in 2009. He wrote a program that would create and mine a virtual currency and bam, money invented. What’s so special about this virtual money? It’s entirely virtual – bitcoin is completely unattached to anything. No government. No gold. No nothing. These virtual coins are entirely anonymous and untraceable, like cash, which means they’re frequently used to commit crimes. The software is open source, so anyone can view it to make sure it’s not doing something nefarious, like starting the Robot Revolution.

First, you install the bitcoin mining software.  Your computer is then like a miner that works for you – it does a specified amount of work to get you a bitcoin. It arose, according to Nakamoto, out of the financial crisis and his distrust of governments to handle and regulate our money. But then merchants began actually accepting bitcoin, like this crèpe place in Brooklyn.

The bitcoin fell out of favor a bit when some of the websites that manage virtual wallets were hacked and compromised. But the bitcoin software/code actually was not compromised. It was too good, thus giving me a little bit more faith in something that seems so unreal. Not even the best cryptographers can break it. But as a result, not as many places take it anymore.

bitcoin-half

via siliconangle.com

I’m not saying we should all run out and convert all our dollars to bitcoins. In fact, I’m definitely not saying that, as the things you can buy with bitcoin are now very scarce. Its popularity really peaked in 2011, two years ago. As you know, I’m a huge fan of government. I generally believe that the government, and not the private sector, should be regulating our money. The thing I find interesting about bitcoin is that, with this software, it’s really neither. The thing I find scary about bitcoin – it’s basically run by one guy: Nakamoto. Who has since disappeared, saying he’s moved on to other things. No one has heard from him since. And the thing I find truly scary – these coins represent nothing. Absolutely. Nothing. At all. But then again, neither does the US dollar anymore. We haven’t been on a gold standard since 1971. So I guess for me, the thing that makes me the most uneasy is that the only difference between the currency we get paid and buy groceries with and bitcoin is a history of money having been attached to gold and silver. This history gives us faith. It’s what’s driven society to collectively decide that our currency has value. Weird, right? And yet I can’t help shake the feeling that the users of bitcoin are all government separatists and conspiracy theorists, even though I know that to be untrue. Interesting to think about either way.

If you’re curious, here’s a link round up for all things bitcoin.

Getting Started

Bitcoin.org – the original site
We Use Coins – the place I got that neat video from. Tons of resource links.
The Bitcoin Wiki

Currency Exchanges

Mt. Gox
VirtEx
BitInstant

Who Takes Bitcoins?

Bitcoin.travel
BitMit – it’s like eBay for bitcoins

Bitcoin in the News

The Rise and Fall of Bitcoin – Wired
Golden Cyberfetters – The New York Times
What’s Your Bitcoin Strategy? WordPress Now Accepts Bitcoins Across the Planet – Forbes
The Crypto-Currency – The New Yorker (must have a subscription for this one)

 

It’s such a fine thread of faith holding our monetary system together anyway, why not have totally virtual money? We basically already do. But bitcoin is limiting – it’s basically a platform on which to buy computer parts and tee shirts. Will that change? I have absolutely no clue. All I know is I feel like reading this much about bitcoin has convinced me that bitcoin is the queerest thing to happen to money in a long, long time.

Avatar of Ali

Freelance writer and fiction author, Geekery Editor for Autostraddle.com and Fiction Editor for qu.ee/r Magazine. Keep up with her at her website.

Ali has written 227 articles for us.

22 Comments

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    I remeber being in Canada a few years ago and being in a bar and people were able to use some sort of money issued by a local chain store (or something). I think it had a scotsman on the face of it, can’t remember the name. The paper had value because it could be exchanged in the chain store for goods. I was a bit weird, but did highlight the way money is basically all about everybody pretending it represents something. Even the gold standard is that when it comes down to it.

    Everybody should pay their doctor in live chickens! It’s the only reliable way!

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    Thanks for your write up on bitcoin. Just a few notes:

    1. Bitcoin is not entirely and automatically anonymous. (you have to do a little more research to understand bitcoin and TOR and anonymity on the web)

    2. I don’t know that people use bitcoin “to commit crimes” per se (even thought that the the easiest aspect of bitcoin to sensationalize). But as you say it is just like cash, only you can essentially transfer bitcoin easily and instantly any where in the world to anyone else who accepts bitcoin as payments whether those enterprises or legal or otherwise.

    3. But regardless of the above it it open source, on a distributed network (meaning no one person or entity can control or stop the flow of bitcoin), and anyone with a bitcoin wallet and connection to the internet can send and receive bitcoin.

    Genius really!

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      I only know about bitcoins because my friends use them to buy illegal drugs online. I don’t know anyone who has bitcoins for legal purchases. But then maybe I just have bad friends?

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    You dont need to install bitcoin mining software to use bitcoin. In fact, unless you have very specialized hardware at this point you’re just better off buying or trading something for bitcoins if you want to acquire some. To use bitcoins you just need a bitcoin wallet, which you can run on your own like the mainline Bitcoin-Qt client, or you can use a web-wallet like blockchain.info or coinbase.com.

    Satoshi Nakamoto does not control bitcoin at all either, in the same way the Tim Berners-Lee does not control the world wide web. Nakamoto developed and released a protocol. Since then, others have taken over the development of the software and there are implementations written by other teams. They all agree to speak the same language and if any programmer introduced a change that was not wanted, people simple can choose not to upgrade their clients and continue to run on the old rules.

    Bitcoin is growing steadily, it had a bubble in 2011 but its incorrect to say that fewer sites accept it now that before, in fact new sites are accepting it _all the time_. WordPress. 4chan. Archive.org. LewRockwell. And more new sites every day it seems. Bitpay reports steady growth in the number of merchants they handle bitcoin payments for.

    Lastly, regarding your views on government … how can government continue to exist when it cannot by force or any other means extract tribute. They cannot tax my bitcoins. Indeed they cannot even know that I (may) control any.

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    What, please do some research before writing such bull, bitcoin is not by one guy! Its run by no one and everyone! Its totally open source and amazing. There is nothing scary about it at all. Is cash scary? Its just digital cash.

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    Good article! I have been thinking about Bitcoin a lot lately since the ecosystem keeps growing.. meaning that the free market is accepting it and using it. Here’s the really important point, and you didn’t touch on it in your article;

    Bitcoin is much more like Gold and Silver than it is like the US Dollar, or the Euro, or the Yen. Why you ask? I will tell you why – scarcity integrity. One of the reasons you see Bitcoin rising against the dollar (becoming more expensive to buy with dollars) is because they are becoming harder to mine. The algorithm that controls their creation makes them harder to create as time goes on and more are made.. in this sense.. Bitcoins are very much like Gold and Silver… as a natural resource, we have mined out most of the easy metal.. ore grades are decreasing, and it is taking more (expensive) energy to mine them… and this phenom… scarcity that is enforced by nature itself, if very different than the creation mechanism behind the major fiat currencies… like the dollar. Ben Bernanke can, and is, creating ever more breathtaking amounts of dollars (QE) and this will eventually debase dollars you may be hiding between your mattresses. It is not easy to imagine Bitcoins you buy today increasing in value,just like Gold and Silver will, while all unbacked fiat currencies devolve.

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    Obviously, all the guys posting here are members of the “bitcoin community” that just learned about this article. We are very excited about the prospects for Bitcoin, and we want to get more people involved, and also clear up misunderstandings. I want to apologize for Josh’s rudeness, whoever he is.

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    This is neat stuff. Thanks, Ali! Your last points reminded me of this podcast: http://99percentinvisible.org/post/23191508700/episode-54-the-colour-of-money
    At the end someone speculates that U.S. currency is still so poorly designed because the government is afraid that redesigning it would remind Americans that money is a shared idea and not a real thing, which would lead to TOTAL ANARCHY AND THE (capitalized) DESTRUCTION OF CAPITALISM

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