Wednesday, February 26, 2014

One More Time: Bitcoin Is Not a Libertarian Money

Despite many posts on the topic, I am still getting many emails similar to this tweet:

First, Bitcoin is not a money. It is an awkward transfer system, a changing in-price American Express electronic travelers check-type instrument. No retailer is pricing goods in terms of Bitcoin. Prices are set in dollars and then a Bitcoin price is determined based on the then price of Bitcoin, BUT no one is setting prices or wages in a fixed amount of bitcoins, such pricing on a broad scale would indicate it is becoming a money, but that is not happening anywhere.

Second, just because something appears on the free market does not mean it can't be criticized or that it must necessarily be a solid product, afterall Paul Krugman books appear on the free market. Nuff said.

But most importantly, the essence of libertarianism is that the government is dangerous, coercive and evil. For a "libertarian" currency to exist, it must address these dangers. Bitcoin does not. Bitcoin is a transfer system that can be easily tracked by government, especially internet transactions (See: HUGE Alleged Silk Road Creator Ross Ulbricht Hit With New 'Kingpin' Charge, Another 20 Years Minimum Prison Time). The point at which bitcoins meet retail transactions is a point that government can control to a very great degree. The purchase of bitcoins is becoming more and more regulated, where identification and sometimes biometric data is being recorded of Bitcoin purchases (SEE Bitcoin ATMs, Oh Yeah This Is Really Great.)

It is really difficult to see how any current internet currencies are superior to gold and silver in terms of privacy and untrackability---and Bitcoin is far from such, Indeed, as Gary North astutely points out, top Bitcoin operators are now running to the government to be regulated (SEE Bitcoins, Stage 2: "Bring in the Feds!")

This is all very, very far from libertarian.