Sane news coverage of Bitcoin exchange Mt.Gox‘s collapse would look something like this:
“Wow! The Internet’s largest Bitcoin exchange just vanished into thin air … and instead of collapsing, Bitcoin is still trading at about $500! What a robust, resilient currency! What a success story! Wow! Wow!”
Sanity in news coverage? Well, not so much. Instead we have the usual suspects running the same smack they’ve run since they first noticed Bitcoin: “Bitcoin future in doubt.”
I doubt it.
In fact, if Bitcoin falls to zero in perceived value today or tomorrow, it will still have been a smashing success: Proof of concept that a non-government, peer-to-peer, self-organizing currency with no central authority can be done.
Yes, some speculators (“buy low, sell high”) have been hurt in the ups and downs of Bitcoin as an “investment.” On the other hand, some have become quite wealthy. And Bitcoin isn’t supposed to BE an “investment.” It’s supposed to be a medium of exchange.
And yes, some people who have treated Bitcoin as the medium of exchange it’s supposed to be have been hurt also, in two ways. Governments have stolen significant quantities of Bitcoin from e.g. Silk Road customers, and hackers have also stolen quite a bit. Yet for some reason I’m missing the breathless CNN coverage of how the futures of the US dollar (which its issuer, the US government, steals huge stacks of via taxation and inflation) and of credit/debit cards (Bitcoin theft is small potatoes compared to card fraud) are “in doubt.”
And yes, Bitcoin proper could fade away into irrelevance as better, stronger, sounder, more easily anonymized cryptocurrencies replace it. Litecoin. Dogecoin. The upcoming Zerocoin. I can’t even begin to predict which cryptocurrency will eventually become “the standard” or one of a few “most trusted” digital media of exchange.
What I CAN confidently predict is that cryptocurrencies are here to stay.
Why? Because they work. They serve several vital functions: Not just protecting their users from government and private thievery, but also making “micropayments” — the holy grail of Internet commerce in very cheap things — feasible and making borders economically superfluous.
Oddly, the mainstream media outlets themselves would be wise to look into Bitcoin and other cryptocurrencies instead of indulging their state-approved Chicken Little-ism. Newspapers have been bellyaching for years about how hard the Internet has hit their bottom lines. They’ve already turned to one “aggregated micropayment” scheme (sales of advertising at very low per-impression or per-click prices) for partial relief. Breaking out content for micropayment in cryptocurrencies, instead of erecting high-dollar-threshold “paywalls” that few people are willing to climb might be the logical next step in their economic recovery plans.
The only entities and organizations with anything to fear from Bitcoin and its offspring are governments (which rely on the ability to tax) and the political class (including pseudo-“private” parasites who make their livings sucking off the tax teat). And they SHOULD be afraid. Their day is coming to an end.
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