So here we are, a month later. MtGox the Bitcoin Exchange
has admitted to losing 6% of the world's Bitcoins and has now filed for
bankruptcy. The price of Bitcoin is now
hovering around the $580 mark (which means my 0.05 BTC is now worth about £17
instead of the £27 I paid for them).
Does this consign my previous post to the Recycle Bin of Internet history?
Well a news item today leads me to think that far from irrelevant,
my post wasn't actually definite enough:
You see, Bitcoin is never going to die.
Ever.
Is there anything that has the potential to kill Bitcoin?
Banning it
If every Government in the world bans the use of Bitcoin it
will die, right? Well no, because how do
you ban Bitcoin? You can fine legitimate organizations who offer to take it in payment for goods, but that doesn't stop
me from firing up my Bitcoin client, generating an address, and getting you to fire up your client and send me Bitcoins.
Making online exchanges illegal
You don't need online exchanges. In fact if trading in Bitcoins is banned,
online exchanges are pretty pointless; you're far more secure keeping your wallet safe offline, and anyway online
exchanges take commissions.
If no-one can trade Bitcoin it'll die
If no-one uses them at all, then yes. But then no-one can stop you using them anyway, and there's a certain group of people that have a vested interest in continuing to do so. The
greatest strength of the Bitcoin network is its ability to transfer Bitcoins
anonymously. So long as the organized
crime community (or indeed the organized paedophile community - which is where
my recent news story comes in) agrees to continue exchanging Bitcoins as a way
of paying for services, then who's to stop them? As previously pointed out, you don't need an
online exchange and you can't stop the Bitcoin network from being used.
But what if the price crashes?
What if it does? So
long as Bitcoin is just being used to transfer funds between individuals
(which is after all what it was designed to do), and not as a commodity to
speculate on, it doesn't matter what the current "value" is, so long
as everyone agrees on that value and it remains relatively stable (and if no-one is speculating on it, it should be).
You
can buy your pornography from me with Bitcoin, I can then use that Bitcoin to
buy drugs, which I can sell to someone else for Bitcoin, which I can then use to buy tools to allow me to hack into
websites to post my pornography for you to download. I can also use Bitcoins to rent time on a
botnet to send out spam to sell my legal highs…which (should you reply to one of my
mails) I will even allow you to pay for…with Bitcoins.
How are you going to ban that?
Trust me, Bitcoin's here to stay.
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