Via Paul Rosenberg of Free-Man's Perspective blog [9] (via Jim Quinn's Burning Platform blog [10]),
An increasing number of people have complained about governments and central banks in recent years, even using the word “tyranny” to describe them. They are, of course, called names in the establishment press: conspiracy theorists, mainly.
Calling someone a name, however, does not erase their argument (at least not among rational people) and both the governments and the big banks stand accused [11].
Up till now, however, these accusations were never accepted by the general public. The average guy really didn’t want to hear about the evils of government money. After all, that was the only thing he had ever used to buy food, clothes, gasoline, cars, and so on. He didn’t want to acknowledge the accusations because he feared what might happen to him without his usual money.
Now, however, we have a brand new currency (called Bitcoin) available to us: something radically different. This gives us a new way to directly address the subject of monetary tyranny, providing a clear test for the governments and money masters of the world:
If they are truly NOT tyrannical, they will leave this new currency alone.
If they ARE tyrannical, they will attack the new currency [12] because it eats into their scam.
In other words, Bitcoin is a test for “the powers that be.” The way they deal with this new method of exchange will reveal their true nature.
If they ignore Bitcoin, they refute the charges of tyranny. If they attack it, they verify those charges.
After all, what honest reason could there be to attack an inherently peaceful tool for transferring value?
Prospective Reasons
Reasons to attack Bitcoin have recently appeared in the “public square.” Here are the three most popular ones, each followed with some analysis:
It can be used for money laundering.
Of course it can be used for money laundering — ANY currency can be used for money laundering. Currencies are neutral — that is their purpose! Currencies are valuable precisely because they can be exchanged for anything else — that’s why we use them!
Moreover, dollars and Euros and Pounds are used for money laundering every day. Consider the recent money laundering crimes of HSBC [13] and Wachovia/Wells Fargo [14]. These banks laundered hundreds of billions of dollars for violent drug cartels. And consider that this amount of laundered money is several hundred times the value of every Bitcoin in existence.
No one from either bank went to jail. Neither bank was shut down. Neither bank suffered more than a minor fine. So, how much of a concern can money laundering really be to governments and banks? Clearly not much.
But, since they accuse Bitcoin of being used for bad things, let’s be clear about the situation:
- Every mafioso uses government money.
- Every drug smuggler uses government money.
- Every terrorist uses government money.
- Every pornographer uses government money.
- Every criminal of every type uses government money.
They also use the telephone system and the mail and banks and a wide variety of government services. But government money is good and Bitcoin is bad?
The argument fails.
It could destabilize the current system.
A tiny, new currency is a threat to the long-established king of the hill? Comparing Bitcoin to dollars, Euros and Yen is like comparing an ant to a dinosaur. This is a threat?
Please understand also that no one is forcing anyone to use Bitcoin. If you don’t think it’s a great idea, you don’t have to use it. If its price movements (relative to dollars) bother you, you don’t have to use it. How is that destabilizing to the current system? It is entirely separate.
And what of the current system? It was falling apart on its own before the Bitcoin program was ever written. And I could go on at length on the insane levels of government debt, hundreds of trillions in derivatives, rehypothecation [15], and innocent people being forced to bail-out failed banks.
The current system has massive problems, but none of them can be blamed on Bitcoin.
This argument fails also.
Bitcoin provides no customer protection.
Well, no, it doesn’t. Bitcoin is a currency, not a legal system.
What is implied by this argument is that the government banking system does protect customers. That is an outright lie. People are ripped-off via the banking system every day. And more than that, consider what happened just a month ago in Cyprus [16]: Thousands of innocent people were ripped-off BY the banking system — purposely — all at once and without recourse. This argument is, really, an insult to one’s intelligence.
And I should add something else: If Bitcoin is used properly, the crime of identity theft (a big problem with government money) vanishes – there is no identity available to be stolen.
So, again, the argument fails. Only those people who believe anything a government says will buy it.
In the End
In the end, it is said, we judge ourselves. Bitcoin has now put governments and banks in the position of judging themselves. They will write their own verdicts.
It should be interesting to watch.