But where this particular henhouse is concerned, the federal government is not just a fox, but one with a voracious all-hen diet, Peeping Tom compulsions and X-ray vision.

The monoculture of big box retailers, whose scale and homogeneity make them such lucrative targets for cybercriminals in the first place, is entirely a creation of federal subsidies. The economic advantage of vertical integration is not an inherent byproduct of economies of scale, but the artificial result of offloading the costs of large-scale distribution infrastructure through transportation subsidies.

Nocera notes that, in the account of former managers to Bloomberg Businessweek, Home Depot’s upper management allegedly deemed “C-level security” sufficient against expected attacks, since “ambitious upgrades would be costly and might disrupt the operation of critical business systems.” Only a plethora of interventions limiting liability and competitive pressure spare companies from being forced by market discipline to allocate revenue toward serving the needs of consumers.  For big businesses, having genuine conflicts of interest with each other smoothed out by government settlement, with costs passed on to customers, is far less “painful” than losing out to more agile and responsive smaller competitors.

Far better information security technology than that used by big business is available and affordable; it’s already in use elsewhere.  Indeed, Nocera quotes security expert Brian Krebs’s observation that an affected business is “always the last to know” when it’s compromised.  However, the financial system set in place by a government with ever-expanding appetites of its own requires a lack of opaqueness which inevitably prevents airtight security. As economist Robert Higgs explains, “once the government has made felonies of a raft of innocent actions … it follows as night follows day that it also treats as suspect every financial transaction you make — after all, any particular transaction might amount to ‘money laundering,’ itself as bogus a crime as any.”

This is doubly so when the federal government’s necessity for large-scale revenue grows to require taxation on sales and income, far beyond that obtainable by a tax on land which, as Henry George observed in Progress and Poverty, “cannot be hidden or carried off.”

Everyday consumer financial security, ensured with the military-grade secrecy used in cryptocurrency, is already technically feasible. Only the government-business alliance prevents market competition from making it economically inevitable.

Such a populist vision may seem surprising coming from a former venture capitalist who descends from a good ‘ol boy lineage of concentrated capital – the sort of capital that is accumulated over generations with the help of state-enforced regulatory and legal barriers designed to favor the elite at the expense of the general public. As a former beneficiary of the very system he now seeks to replace, he stands as an odd figure to lead a populist financial revolution.

Given that bitcoin is a tool designed to empower the 99% and has the ability to destruct the very system of state and legal privileges that currently produce and protect Mr. Byrne’s wealth, it seems strange that he advocates the construction of a new system that would level him onto the same economic playing field as the rest of us. Yet despite this apparent philosophical discrepancy within his vision, Mr. Byrne wears an aura of Messianic servitude as he goes about his new-found destiny as the unlikely leader of a Rebel Alliance against the evil empire of Wall Street.

Confidence aside, Byrne himself actually has no idea how a stateless crypto-equity system might actually work in real life. And so he’s boldly enlisting the help of the public to fill in the blanks for him, asking anyone with ideas to contribute them freely to an open-edit wiki page that immediately greets the viewer with Overstock’s trademarked red and white logo along the header space. While looking through this wiki, my first thought was “what motivates so many people to do all of this hard work for free on behalf of a brand that belongs to an enormously wealthy individual?” An individual, no less, who isn’t likely to financially reimburse the efforts of all these anonymous volunteers who are not only giving him free brand advertising, but writing what may ultimately become the corporate charter of whatever next financial scheme he has in mind.

If Mr. Byrne’s worker bees will pause for a moment to examine the fine print in the Terms & Conditions portion of O.info(TM), they will notice that although the content they create for the website falls under a Creative Commons Attribution-ShareAlike 4.0 International License, the content may nonetheless “be protected by other intellectual property rights such as trademarks.” And O.info(TM) is clearly a trademark. Additionally, the contract states that as a condition of meeting the CC ShareAlike requirements, any and all use of the wiki’s content must be attributed as the creative work of Overstock.com and preferably provide a link back to the Overstock-branded wiki page. Not only are the wiki’s content creators providing free advertising for Overstock, but additionally they’re forfeiting credit for any of the work they’ve done or content they’ve produced on Overstock’s wiki. Additionally, just like any other fineprint contract, the agreement comes with the condition that “Overstock may modify these Terms at any time.”

I want to make it really clear that I’m not intending to paint Mr. Bryne in a villainous light. Not only is he one of today’s most-respected business minds, but he’s also contributed much of his own free time and energy to bring the Bitcoin movement forward into mainstream acceptance. I have no doubt that he has good intentions. And as far as weaving the project into his corporate branding, he is merely pursuing his own self-interest, as any rational individual should. What bothers me is not Mr. Bryne or his company, but how the mostly-libertarian authors of his wiki page have seemingly forgotten how to look after their own self-interests.

And as for those who believe that the promotion of Bitcoin as a concept and moral philosophy is even more important than the pursuit of self-interest, then it’s all the more important for them to question the motives behind the powerful companies and individuals that would attempt to shape its future. A healthy dose of skepticism is needed in such high stakes situations. When the elites of any particular system become aware of a potentially serious threat to their continued dominance, they generally have two options: either fight against the threat or co-opt and absorb it. Threatened by the growing popularity of stateless currency, the current financial elites are desperate to retain their state-subsidized market dominance by co-opting the movement that would flood the market with newer and better competitors.

As a bitcoin enthusiast myself who believes in the revolutionary potential of the bitcoin economy, I can understand the initial eagerness to volunteer for free in any project that promotes Bitcoin both as a currency and an idea. But one also has to remain wary of opportunists and consider the larger picture and long-term future of cryptocurrency that is at stake. What needs to be realized is that if we allow the current financial elites to keep the ball in their court, we’re helping to build a new system that remains tilted in their favor, one that preserves the current balance of power and does nothing to remove the state-sanctioned economic advantages that privilege a few at the expense of all others. Though Overstock is only one example among many, it’s symbolic of all fortunes built upon the inequities of the old system. Besides which, is it really a good idea to give the Mr. Byrnes of the world a head start advantage over the rest of us when we could be cultivating that advantage for ourselves?

As any good libertarian should know, if you’ve decided that you’re going to work for free, at least work as part of a public project for the greater good rather than for the narrow interests of a particular individual or for-profit entity. One such entity that first came to mind is the Bitcoin Foundation. But upon closer inspection, I found that its board of directors has been infiltrated with old school (read: pre-Bitcoin era) venture capitalists who are circling the territory like vultures. And in fact, the traditional VC industry is so interwoven with the Bitcoin community that it deserves its own separate article. But for purposes of wrapping up this first article, I’d like to promote the idea of using an already-existing bitcoin wiki that has no centralized leadership and no gatekeepers and is a natural fit for the type of agenda Byrne claims to pursue. Another possibility is that a stock exchange could even be built directly into the blockchain infrastructure itself. But regardless of what’s possible, what matters is that the platform itself does not come to represent the agenda of any particular brand or interest group, but rather the agenda of Bitcoin as a concept and a community.

As a free market anarchist, I’d personally prefer to see these cryptocurrency stock markets emerge spontaneously from the market in a decentralized manner. And while many will argue that Byrne’s approach evolved spontaneously through the market, it did not evolve through a free market, because capitalism is not a free market. If the stock market is fated to reinvent itself one way or another, does the Bitcoin community really prefer to have any specific person singlehandedly spearhead the project and claim it as his own? Or would they rather spearhead it collectively in the decentralized spirit of a community that values leaderless markets?

Dark Wallet is a suite of tools for storing, sending and receiving Bitcoins that seeks to protect and anonymise the use of the crypto-currency. It stands against those who would seek to take the crypto out of crypto-currency.

If you do wish to test it out yourself, you can find it by going to UnSystem’s page and navigating to the github. From there the source code is available to download. If you are using a windows system, download the .zip. If you are on OSX, you can choose either the .zip or the tar.bz. If you are using Linux, you should probably be aware of what archiving programs are on your system and choose accordingly. Once it is downloaded, extract the folder to a known location.

To install the extension to your Chrome Browser, go to Settings > Extensions, then tick the Developer Options box, and then click “load unpacked extension“,  find the folder you have just extracted and hit OK.

You will now have Dark Wallet installed on your browser.

Upon running Dark Wallet for the first time, you are greeted with a clear, simple and flat interface. From here you are prompted to create an account, you can choose to use the Bitcoin Testnet if you wish. This is alpha software, so this is the wise choice. The Testnet is a parallel Bitcoin architecture used for the testing and development of Bitcoin related software. It is designed in such a way that the coins in the system remain worthless.

Once your account is created, you are taken to your wallet. From here you can manage and create “pockets,” which are administerable sub-wallet addresses, and check your transaction history. There is a Multisig fund feature, which allows the creation of a wallet that is required to be signed by multiple keys in order to initiate a transaction. This seems especially useful for business and organisations where the person administrating the Bitcoins is not necessarily the owner of the Bitcoins, and due to the irreversible nature of these transactions, accountability is important.

In the send section are the basic tools to send your Bitcoins to other addresses, with added advanced options such as “CoinJoin” which is a feature that mixes transactions from different users together, making them difficult to track through the blockchain. The public nature of Bitcoin transactions means there is a risk of anonymity being compromised if a malicious party is interested enough.

There is also an escrow option that is not yet active. Presumably this will allow transactions to be held at an address by a third party arbiter, if a dispute arises between two parties, the arbiter can have final say as to which direction the transaction flows. If implemented properly, this could be an effective decentralised antidote to monolithic institutions such as Paypal and banks in the role of a dispute resolution service. This is a much needed standard, if Bitcoin is to gain mainstream traction.

Other features include a system for keeping contacts, and right now there is a public chat under “lobby”. This is a great feature to have right now, the lobby moves randomly from bouts of nonsense and pointless trolling to answering questions about the software, and people sending and receiving test coins to each other so they can get a sense of how Dark Wallet works. If you can’t get a hold of any Testcoins, numerous “faucets” are available that will send you a reasonable sum of TestCoins to your wallet. Here is one that I, and others have had success with.

While the alpha is not without it’s bugs, the design and features available have great potential to proliferate and become a mainstream Bitcoin wallet. In doing so, it could make Bitcoin unassimilable into the current financial paradigm. This is possibly the greatest potential that Bitcoin can offer. This concept, along with the possible future Dark Market may be an extremely robust and open alternative to the current white market system.

Dark Market is at present a proof of concept not currently in active development, as the UnSystem team wish to focus their current efforts on Dark Wallet. To it put simply, Dark Market is a market platform with the same focus on privacy and anonymity as Dark Wallet. A P2P distributed counter economy, which can not easily be shut down – in Cody Wilson’s words, market “where no one has to be Dread Pirate Roberts”.

While an initial look at Dark Wallet, and the concept Dark Market may seem like they are best suited for selling contraband, there is no reason that this, as a platform, could not eventually become a Grand Bazaar – a new Amazon or eBay free from centralised restriction, utilising cryptography and peer to peer networking to facilitate transactions and resolve disputes.

A parallel grey and black market that seduces the white.

Right now there is a battle between those who see crypto-currencies as a solid foundation for a modern counter-economy, those who wish to sterilise and recuperate it into the state approved white market and those who simply want to destroy it. This is imperative to them because only the white market can effectively be controlled by the state, only in the white market can taxes be sought on the movement of goods and services and regulation be placed on what we trade. Dark Wallet equips us against this, whether we are self-consciously engaging in the counter-economy or not. As anarchists it is not only ethical, but conducive to our goal to engage and expand the counter-economy – to engage in voluntary exchange without feeding the state. The war between these markets is an old one, and Dark Wallet represents a new weapon in that battle.

“Currently there is no system by which Bitcoin marketplaces can be held accountable. Resorting to government legal systems might indeed be the only way by which Mt.Gox customers can receive the restitution they deserve. What does have to be kept in mind is that this option is far from optimal. Further talk of government regulation of crytocurrencies will not be a surprising result. In fact it seems inevitable. In the future the digital counter-economy will have to find ways to regulate itself. The ingenious online methods that are bound to come up might lead to insights by which we can regulate our own “analog” communities as well. One day government regulation of the marketplace will be a thing of the past as the self-regulating counter-economy replaces it entirely.”

Approximately 23 bitcoins were taken, with a value of about 14,500 USD. No small sum. This theft occurred despite reasonable safety measures undertaken by Fr33 Aid on the Blockchain.info site. Including the use of two factor authentication. This kind of event is not new. Frequently we are given stories of bitcoins being stolen from people’s wallets. This has happened at coinbase, it happened to MtGox to the tune of $500 million dollars, which ultimately brought down the exchange, and it also happened to Fr33 Aid’s account at Blockchain.info.

The common theme in all of these is that the wallets were stored in online accounts. Storing ones bitcoins in an online wallet on a third party server is one of a few options that users of the cryptocurrency have. In keeping with my argument that Internet security is our responsibility I will argue that a locally stored wallet should be the option used by those who wish to keep their bitcoins safe.

While there are no shortages of horror stories to be found from people who have lost bitcoins from local storage due to malware or data loss, this can be mitigated and potentially eliminated by following best practices. The issue with online third party storage is that we are required to trust that they are undertaking best practices, in cases such as MtGox, where poor practices were followed, many found out too late.

Probably the most secure way to protect your bitcoins from online theft is to have it air gapped, ie on a device that is not connected to the internet. An example could be to place your wallet on a thumb drive, and put it in a safe place. If you are using a Linux OS, taking the extra step of encrypting the thumb drive is trivial while formatting the drive. While safe, this is probably best if you are only collecting bitcoins, or if you want to use it to store the majority of your bitcoins while using a secondary wallet for frequent transactions, because while you are still able to be on the receiving end of transactions, you must physically find the thumb drive, and break the air gap before using it. There is also the issue of losing the physical media – which thumb drives appear especially prone.

A practical middle ground that I endorse is a multi-factor solution that uses a few simple tools to keep your wallet secure from theft and from coin loss. It’s not particularly revolutionary, and these basic principles are outlined on bitcoin.org. Here is a simple specific example of how to undertake these steps.

This example will be using Bitcoin Core (formerly Bitcoin-QT) as the wallet program. Though not feature rich, it is simple and secure. When downloading your wallet, always make sure to download from a trusted source. A random website serving you Bitcoin Core may have malware designed to steal your coins with it. Barring a breach of the Bitcoin foundation’s servers, you can be reasonably sure that you are getting the software you asked for from their site. If you are using an older version of Bitcoin-QT, it is good practice to keep your software up to date and install the latest version of Bitcoin Core.

When using Bitcoin Core, the first step to securing your wallet is to use the encryption feature in the wallet. This can be accessed from Settings > Encrypt wallet.

Choose a strong passphrase that you will not forget. If you forget this passphrase, you have effectively lost your bitcoins. This feature encrypts your private keys and prevents bitcoins being sent from your address without an authorisation with the passphrase. This means if someone gains physical access to your machine, or an air gapped physical storage, they will be able to see the contents of your wallet, including your address, but they will not be able to steal your coins without breaking the encryption – which is not trivial.

Such a simple feature protects against coin theft, though coin loss presents a far greater risk than theft. So we move on to backing up our wallet. Online storage is far more convenient than physical storage, and less prone to loss. Often these storage solutions are not secure, so when backing up a wallet, an extra level of security is not to be disregarded.

In order to backup your wallet using Bitcoin Core, from the menu go to File > backup wallet.

Choose a save location and save. This creates a copy of your ‘wallet.dat’ which contains your private keys. An extremely secure solution to back this up is to use PGP to encrypt and email the file to yourself. This has a number of advantages, as it obscures the fact that you are even sending a wallet backup, meaning it will be less likely to be targeted by a malicious entity. You can use a keyword in the subject line of the email to make it searchable later, It will automatically time-stamp the email. This is important because right now because you will need to create a new backup if you create a new address within your wallet. If you have mulitple email accounts using PGP, you can automatically have a copy saved in each account.

If you have not yet, but are interested in setting up PGP with your email, you can follow this guide here.

If you do not wish to set up PGP, another solution is to take your wallet.dat and encrypt it with WinRar/Rar. To encrypt a file using Rar, on most machines will involve right clicking on the file and selecting “add to archive”. From here select the Advanced tab, and then Set Password.

As always, a strong passphrase is crucial. Checking the Obscure file names box will increase security by concealing the existence of the wallet backup from any potential attacker. From here you can take this encrypted compressed file and place it in some online storage such as dropbox, or email it to yourself for safe keeping.

Technologically there is nothing stopping cryptocurrencies from changing the world, bypassing the need for conventional banking systems and flouting government regulation of commerce. We just need some great minds to implement this, and we need people to have the confidence to adopt it.

Following these steps is just one way to conveniently access your wallet while at the same time keeping your Bitcoins safe from theft or loss. The future of crytocurrency is predicated on trust and confidence in the system. Over time, better integrated solutions are likely to be developed for wallet security. In the meantime keeping ourselves safe from loss and theft not only benefits us personally, but also creates better confidence in the concept of cryptocurrencies, and ensures a more robust future for these technologies.

Translations for this article:

• Portuguese, Como garantir a segurança do seu bitcoin.

Certain publications, such as Salon, have taken to this story like a pig to mud, claiming a victory for the forces of the State over those scary, evil, unregulated market transactions and their crypto-communo-fascist-libertarian-anarchist-conservative followers. The thinking behind this is shallow, as is generally the case; if you can find and reveal Nakamoto, you now have someone to pin all of Bitcoin’s mistakes to. See also: attaching a leader to Occupy, or pinning the Koch Brothers simultaneously to everything labeled “libertarian” and confusing that with everything labeled “awful, statist and conservative.”

Now that Satoshi Nakamoto has been found, the punditry has someone to blame the Silk Road, MtGox’s failure and Dogecoin on. Except it’s becoming more and more unlikely that Newsweek actually found him.

Here’s the timeline:

On March 6, Leah McGrath Goodman published her cover story for Newsweek – the first print Newsweek cover story since they went online-only in 2012. It details a months-long hunt to find and talk to the man Goodman believes started Bitcoin. At one point, early in the article, she writes,

“It seemed ludicrous that the man credited with inventing Bitcoin – the world’s most wildly successful digital currency, with transactions of nearly $500 million a day at its peak – would retreat to Los Angeles’s San Gabriel foothills, hole up in the family home and leave his estimated $400 million of Bitcoin riches untouched. It seemed similarly implausible that Nakamoto’s first response to my knocking at his door would be to call the cops.”

Goodman found Dorian Nakamoto through an email list she obtained from a company that makes model train parts. They began a correspondence which ceased abruptly the moment she brought up Bitcoin. She then proceeded to contact Nakamoto’s family members, as well as Gavin Andresen, whose own contact with the founder of Bitcoin was limited to code and media angle and ceased when Andresen brought up that he was going to be speaking about Bitcoin to CIA officials.

From Dorian Nakamoto’s family, Goodman discovered a Cal-Poly-trained physicist who loved model trains and who excelled in anything having to do with engineering, computers and math, but who craved privacy and kept secrets; from Andresen, she learned exactly what everyone else has known since Satoshi Nakamoto disappeared in 2011: that he was secretive, that he never talked about his personal life, and that the Bitcoin project was possibly a political statement.

On March 7, Dorian Nakamoto agreed to do an interview – no cops this time – with Ryan Nakashima from the Associated Press. Nakamoto denied any knowledge of Bitcoin until his son contacted him three weeks earlier, saying repeatedly, “I got nothing to do with it.” He was bombarded by press wanting to get in contact with him and eventually announced that he would only talk to one reporter over lunch. During that interview, Nakamoto said he had been misunderstood:

“I’m saying I’m no longer in engineering. That’s it. And even if I was, when we get hired, you have to sign this document, contract saying you will not reveal anything we divulge during and after employment. So that’s what I implied.”

Also on March 7, Newsweek and Leah McGrath Goodman released a statement standing fully behind their cover story:

Ms. Goodman’s research was conducted under the same high editorial and ethical standards that have guided Newsweek for more than 80 years. Newsweek stands strongly behind Ms. Goodman and her article. Ms. Goodman’s reporting was motivated by a search for the truth surrounding a major business story, absent any other agenda. The facts as reported point toward Mr. Nakamoto’s role in the founding of Bitcoin.

Finally on March 7, the P2P Foundation account of Satoshi Nakamoto went live for the first time in years – to debunk the Newsweek article: “I am not Dorian Nakamoto.”

While none of this points to Dorian Nakamoto’s disqualification from the character, nothing so far points conclusively to him being the founder of Bitcoin either.

Since then, a host of ancillary blogs and punditry pieces have been published debating the facts and myths of the Newsweek article. But the crown jewel of them all has to be Salon’s aforementioned sneering, oddly sure of itself anti-libertarian “checkmate” piece, written on March 7, that boldly declares,

“If you invent a multibillion-dollar digital currency explicitly designed to remake the global financial system that gains serious traction, people will want to know who you are. If you mastermind an anarcho-libertarian project to break the hold of governments over money, history will demand answers — and good reporters will find them.”

That Goodman is a good reporter is not up to question here; what is questionable is how good the reporting in this particular instance is. It isn’t just Bitcoin fanatics that have criticized the article – other journalists have questioned it as well. As media critic Jay Rosen said in a column at PressThink:

“Show your work. Don’t tell us how much work went into it. You publish your story, you know it’s going to come under attack, you prepare for battle and when the time is right you release the evidence you have. Instead: ‘Goodman feels that she should be given the respect due a serious and reputable investigative journalist, working for a serious and reputable publication.’ That’s not ‘show your work.’ That’s, ‘You didn’t hear us. We are Newsweek magazine.’ They heard you. They don’t care. And they know that Newsweek sold for $1 a few years ago.”

It bears mentioning that Goodman did not shine a light on the evil anarcho-libertarian funny money conspiracy that Salon would so love to destroy. Read charitably, her article does one thing only: reveals the founder of Bitcoin. So the question of whether there is a plot “to break the hold of governments over money” goes fundamentally unanswered in this case – which, speaking frankly, makes the whole point of that Salon article seem silly.

And that’s really the lesson for today: if you’ve got an ideological agenda, maybe don’t make giant proclamations that your enemies have lost before the battle has begun.

As acusações de fraude e negligência são justificadas, mas um processo talvez não seja a melhor forma de chegarmos a uma solução justa na economia desregulamentada da internet. É estranho que os membros da comunidade Bitcoin, muitos deles contrários à intervenção governamental sobre a oferta monetária, estejam tão dispostos a apelar para sistemas jurídicos estatais quando a situação se complica. Um processo certamente abriria as portas para que os legisladores complicassem ainda mais o uso do Bitcoin e de criptomoedas similares.

O ativista político americano Samuel Edward Konkin III popularizou a expressão “contraeconomia” para descrever todas as transações voluntárias que ocorrem fora do mercado regulamentado pelo governo. O Bitcoin, e as criptomoedas de forma geral, desempenham um papel importante na contraeconomia ao tornarem desnecessário o uso da moeda fiduciária estatal. Contudo, para que a contraeconomia seja sustentável, é necessário integrar sistemas legais não-estatais à sua estrutura geral. Ao invés de recorrer ao estado quando as coisas dão errado, esta oportunidade deve ser utilizada para discutir e desenvolver sistemas em que empresas contraeconômicas possam ser penalizadas por suas ações.

Um exemplo de regulamentação dentro da contraeconomia vem da comunidade em volta do Silk Road, um mercado online baseado em Bitcoins que serve principalmente para a compra e venda de drogas ilegais. Alguns de seus usuários — de um grupo chamado LSD Avengers — fez uma análise química do ácido que compraram para testar se era genuinamente LSD, dando aos outros usuários um padrão de segurança segundo o qual as drogas poderiam ser compradas e consumidas de forma segura. Isso ilustra como um mercado negro pode se auto-regulamentar sem recorrer à imposição de agências burocráticas como a Food and Drug Administration (agência do governo americano equivalente à Anvisa no Brasil).

O próprio Bitcoin desempenha um papel libertação em países como a Ucrânia e o Irã, já que disponibiliza um sistema de pagamentos independente do envolvimento e das diretrizes governamentais estipuladas pelos bancos centrais. É plausível que, se o destino do Mt. Gox fosse colocado nas mãos dos tribunais, regulamentações provavelmente se seguiriam. As regulamentações poderiam até satisfazer nossa necessidade ocidental de ter uma ilusão de segurança, mas prejudicariam a liberdade econômica em países cujos povos que tiveram menos sorte que os do Ocidente. Isso diminuiria o potencial revolucionário das moedas digitais.

Atualmente, não há sistema através do qual os mercados de Bitcoin possam ser punidos por suas ações. Recorrer ao estado, de fato, pode ser o único jeito pelo qual os clientes do Mt. Gox possam receber suas restituições devidas. O que se deve lembrar é que essa opção está longe de ser a melhor. Discussões maiores sobre a regulamentação de criptomoedas não são difíceis de prever e parecem até mesmo inevitáveis. No futuro, a contraeconomia digital terá que encontrar maneiras de se auto-regular. Os meios engenhosos pelos quais nós regulamos nossas economias digitais podem nos levar a maneiras de regular também nossas comunidades “analógicas”. Um dia, chegaremos num ponto em que a regulamentação dos mercados será coisa do passado e a contraeconomia, com seus mecanismos de auto-regulação, a substituirá completamente.

Traduzido do inglês para o português por Erick Vasconcelos.

The accusations of fraud and negligence are certainly justified, but a lawsuit might not be the best way to seek justice in the unregulated Internet economy. It’s odd that members of the Bitcoin community, many of whose members oppose government intervention in the money supply, are so easily persuaded to appeal to government legal systems once the situation goes awry. A lawsuit will undoubtedly open up avenues for lawmakers to further complicate use of Bitcoin and similar cryptocurrencies.

American political activist Samuel Edward Konkin III popularized the term “counter-economics” to describe all voluntary transactions that occur outside of the realm of the government-regulated marketplace. Bitcoin, and cryptocurrencies in general, fulfill an important role in this counter-economy by taking fiat money out of the equation entirely. However, to fully sustain the power of the counter-economy we must integrate non-state legal systems into its overarching framework. Instead of running back to the state when things take a wrong turn the opportunity must be used to discuss and develop systems by which businesses in the counter-economy can be held accountable for their actions.

An example of counter-economic regulation comes from the community around the Silk Road, a Bitcoin-based online marketplace for the buying and selling of illegal drugs. A group of its users calling themselves the LSD Avengers ran chemical analysis on acid they bought to test whether they were in fact in possession of genuine LSD, providing other users with a safety standard by which drugs could be ordered and consumed safely. This illustrates how a black market can self-regulate without resorting to the imposition of bureaucratic agencies like the Food and Drug Administration.

Bitcoin itself plays a liberating role in places like Ukraine and Iran, providing a system of payment independent of governments meddling and directives set forth by central banks. It is plausible that if the fate of Mt.Gox is placed at the hand of judges then regulation will follow. Regulation might satisfy our western need for guaranteed illusory feelings of safety. But it will hurt economic freedom in countries with people less fortunate than in the West. This will detract from the revolutionary potential of digital currency.

Currently there is no system by which Bitcoin marketplaces can be held accountable. Resorting to government legal systems might indeed be the only way by which Mt.Gox customers can receive the restitution they deserve. What does have to be kept in mind is that this option is far from optimal. Further talk of government regulation of crytocurrencies will not be a surprising result. In fact it seems inevitable. In the future the digital counter-economy will have to find ways to regulate itself. The ingenious online methods that are bound to come up might lead to insights by which we can regulate our own “analog” communities as well. One day government regulation of the marketplace will be a thing of the past as the self-regulating counter-economy replaces it entirely.

Translations for this article:

• Portuguese, O Bitcoin deve se auto-regular, porque o estado só é capaz de destruir.
• Spanish, Bitcoin Debe Autoregularse, El Estado Solo Puede Destruirlo.

As an anarchist, I’m a big fan of competing currencies, especially competing freed-market currencies not issued by, or subject to direct manipulation by, states. The reasons for that should be obvious: If government can’t supervise and control the flow of money, it gets a lot harder for it to steal (“tax”) part of that money and spend it on killing and enslaving people. So Bitcoin made quite an impression on me, and I’m still sold on it.

One issue I’ve come around on is the absence of commodity backing. In the past, I’ve been of the opinion that to be sound a currency should actually represent a pile of some scarce, homogeneous material (e.g. gold) that’s valuable for other purposes in addition to constituting a convenient medium of exchange.

The problem with commodity currencies, though, is that those piles of material have to be physically stored. They’re vulnerable to roving gangs of thieves, including but not limited to government “law enforcement” agencies. More than one commodities-based currency has been shut down, or at least yanked into government regulatory schemes, by the scruff of its neck.

Bitcoin is just bits of data; it’s created by the process of crunching the numbers involved in exchanging it. That drives commodities-based currency aficionados nuts: No pile of gold in a vault. But it also represents a kind of security: No number of jack-booted thugs can break into the vault and take the stuff backing the currency, because there IS no stuff backing the currency. And because the generation and exchange of Bitcoin is distributed and peer-to-peer, governments would pretty much have to shut down the Internet to put a stop to Bitcoin commerce.

Said commerce, however, is not completely immune to government intrusion.

Internet services that facilitate the storage and use of Bitcoin may be vulnerable (and indeed some are trying to “go legit,” or else shutting down in the face of government threats).

Contrary to popular belief, Bitcoin is not inherently anonymous. In fact, every last Bitcoin transaction is transparent and publicly viewable. You can use Bitcoin anonymously, but it takes a little work: Don’t keep your wallet at one of those vulnerable services, generate new addresses for each transaction, anonymize your IP address or work from public Wi-Fi connections, etc. And help is on the way: The good guys are working on ways to make Bitcoin commerce more private and secure.

So, why the “boom and bust?” The main reason is that Bitcoin’s user base is still fairly small: “Buy low, sell high” traders constitute a large portion of that base and thus have a big effect on price when they decide to take profits, or panic, or sit on their stacks. There are “forex” markets in all currencies, of course and the relative values of those currencies fluctuate, but not as much, because for every day trader bouncing back and forth between dollars and euros and yen, there are hundreds or thousands of people using dollars, euros and yen as money to buy cars, concert tickets and bags of potato chips with. As Bitcoin’s user base grows, and as the proportion of people using it as a medium of exchange grows versus those treating it as an “investment” to grab low and dump high, its valuation will probably stabilize quite a bit.

Is Bitcoin the end of political government? No, but it’s part of the beginning of the end of political government. Hang on. It’s going to be a heck of a ride.