Virtual Currency Shakedown By US Government
Got to love our government. How clueless do you have to be about digital to think shuttering a bitcoin exchange stops anything. Bitcoin is an IDEA. 

The idea +David Amerland's excellent What If We Had A New Value System For Goods and Services discusses so well and an idea whose time is here and now. I don't carry cash anymore. I have a single dollar on me as I write this having just purchased lunch with my debit card. 

Money is DEAD and gone buried by our digital age. Bitcoin, the idea of a virtual currency, is a powerful idea since such a currency would set its own value. More accurately, WE would set Bitcoin's virtual value by our social investment in it.

Got to love a government who is so clueless about what Bitcoin really is that they shut down the PHYSICAL thing as if they caught some wild cowboy counterfeiters. LOL, how stupid can you be?

Bitcoin as an idea may become STRONGER thanks to the government's actions. The "Streisand Effect" predicts any attemt to quash a story makes it go viral that much faster. The government may have just done what the bitcoin movement's founders were beginning to do (in a stumbling in the dark kind of way).

It is not JUST that we will make sure and create something when the goofystupid arm of Johnny Law comes down so cluelessly, but that bitcoin is an idea whose time has clearly come. We need a currency WE own here in social media. Some way we can more truly value those things we understand better than currency, the Fed or the US Government can.

I am not suggesting wild revolution, but an artistic look at how we value THINGS and LIFE as the not so subtle subtext of David's reads and challenges so well. My friend +Alan Fitzpatrick  has a great company called +mailVU with some amazing listings in Google. 

Did any potential investor ask Alan about those amazing listings? Nope, because they don't understand the CURRENCY they represent. Instead they asked about defendable Intellectual Property (IP) as if such a thing still exists (it doesn't). 

Bitcoin is the currency for the digital revolution and, as such, this new cyber currency only gets STRONGER with every effort by ham fisted governments to kill it. So there is this thing called The Interent and it is going to do whatever it damn well pleases Uncle Sam. Help and be reward. Obstruct and become as irrelevant as so much of what you already do IS.

My advice? DO NOTHING and bitcoin will sort itself out. Continue to obstruct and you may speed bitcoin (and similar ideas) on paths you really don't like much (unintended consequences being a true pain in the you know where :).

Money is DEAD, now what?  
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7 comments
 
Money and how governments react to its redefinition is key to the trust we have in our societal systems and what they mean. The ramifications for command-and-control set ups are huge here. Great thoughts. 
 
Money is many things: a medium for exchange, a measure of value, a store of value, an object of desire, an instrument of power, an indicator of social status... 

But for all its usefulness, indeed necessity, money may also be astonishingly corrosive of value. As soon as a price is assigned to anything, the intrinsic worth of that thing becomes obscured if not obliterated. Thus foreclosed houses remain boarded and abandoned while families sleep in automobiles. The value of the house as a home for a family has somehow become lost.

Suppose somebody was paying me to post this comment. Would what I say remain credible? Or would you suspect my motives? This, of course, is the marketer's paradox: how to remain credible while promoting a product. It is explains why the testimony of unpaid customers on social media has so much more potency: their words are more believable.

I'm not sure that Bitcoin is all that different in this regard than government-issued currencies like Dollars or Pounds or Euros. The more useful it becomes as a currency, the lower its pH becomes, increasing its corrosive acidity. As John Muir noted over a century ago, watching the incursion of capital upon nature: "Nothing dollarable is safe."
 
+Leland LeCuyer, thanks for alerting me to this thread. Your comment is spot-on. Bitcoin is used for all the functions you list, just as fiat money.

Bitcoin may be seen by some as the currency of the digital revolution, but no single currency or no single monetary system of exchangeable currencies will ever eliminate the problems you point to, namely the multitude of purposes that are mixed into these currencies. 

The assumed generic exchangeability of money is the seed of the value destroying property of "money", making it unfit as a store for value. And to be clear, there are many things that should not be exchangeable for anything else, and attaching a quantitative metric to them implicitly indicates a desire for exchange, which negates the unique relationship between people and the non-exchangeable item.

However, there are many natural resources that are limited or dangerous substances, the consumption or production of which should be limited. Additionally economic communities have a need for fair exchange of commodities within the community, and for economic exchanges within the community local metrics of exchange that are bound to a specific purpose are useful.

I have four major problems with traditional economics:
1. Simplistic assumptions on the topic of human behaviour, in particular the assumption that humans always act to maximise personal financial self-interest. Luckily some behavioural economists are now discarding this assumption. Economists still have a lot to learn about biology.
2. Simplistic assumptions in the definition of economic activity.
3. Unrealistic assumptions on the substitutability of economic goods and services.
4. The concept of growth as a dogma / religion, which is simply incompatible with a finite planet.

Coming back to the topic of currencies and economic indicators, here a few hints for things that should register positively on any new economic indicator that aims to be useful:

1. Going sailing with a friend rather than renting a yacht 
2. Inviting you to stay in my holiday home
3. Not owning and driving a car and instead using a bicycle
4. Going windsurfing around the corner rather than booking an expensive holiday
5. Keeping fit rather than relying on big pharma to fix me up
6. Spending weeks developing open source software for an economic transaction platform/utility
7. Growing an open source community around working software and telling investors that they can keep their money
8. Keeping chickens in the backyard and growing vegetables instead of buying them from the supermarket

As a bonus, most of these decisions lead to a reduction in the amount of energy consumption, and a corresponding reduction in negative economic "externalities". The more decisions are made this way, the less the old economic indicators matter. 
 
+Martin W. Smith, sure, spread the message. Economics as a discipline is badly broken, and at this point in time it is still used by governments all around the world as the basis for making decisions that affect the lives of billions of people.
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