Bitcoin may be a tragedy as it tries to bootstrap itself as a new currency, reflecting changing social values.
I've been following Bitcoin since late last year as part of my research on the Future of Currency and Transactions. Bitcoin in itself is an interesting concept in currency, self-organizing and do-ocracy. However right now, it's attracting a lot of speculators, which while are driving up the price and attracting a lot of media attention, are not helping spread the core ideology of the currency.
You see, Bitcoin is a currency that sets itself apart because of it's philosophy AND the application of technology to encode this philosophy in the system itself.
I see Bitcoin as a currency ahead of its time as well as reflecting shifting values of our time. Time will tell whether or not it will survive - and how much governments and banking institutions see it as a threat and want to "crush" it.
Media coverage has really heated up in the past 4-6 weeks starting with this sensational (as in sensationalized media) piece by Jason Calacanis
I generally love Calacanis's work, but he poured gasoline on the fire there. Attracting the wrong kind of people to Bitcoin. I inwardly groaned when I saw this come out. It didn't help attract the type of people who could help Bitcoin grow to be a viable currency.
ArsTechnica came out with a more well rounded article on Bitcoin which I recommend.
And the Economist had an article a few days ago, with shocking news of a first hack at the end of it as of today (6/15/2011).
I myself, have watched this question/discussion on Quora (which includes my answer and my perspective). It's been interesting to see how the responses have heated during the media hype time.
My comment on Bitcoin from Quora
Bitcoin is one example of a decentralized currency created with values encoded in the "DNA" of the "currency." It is "good" if it aligns with your "values." It will be used by those who ascribe to the values encoded in the currency. It is one of many emerging alternate currencies with specific values encoded in the currencies "DNA." If you don't like the values encoded in Bitcoin (anonymity, peer-to peer, disruptive, tech-inclined, early-adopter bias, scarcity); there are many other emerging peer-to-peer, disruptive currencies you can also participate with, e.g. "influence" tracking, time banking, local currencies, etc. that have different values encoded in their "DNA." Bitcoin is not unique in it's execution of the values it ascribes to
My post explaining three concepts I'm use more to think about currency and transaction mechanisms: Efficiency | Resiliency | Anti-Fragility explains the structure in which I think about emerging alternate currencies. Bitcoin emerges distinctly in the Resiliency bucket encoded with technocrat values.
But here's the problem. The Bitcoin system has attracted a bad element - speculators among one. Anyone who does community development knows you have to be careful who you include in your early adopter community if you want to create a specific type of community. Speculators are not there to help you build your anything. Speculators don't care if you (or your company or community) is devastated and left for dead once they've got their cash out (or barely keep you alive while they can get their cash out).
What we have here is a clash of social values in an economic system. A system was created with certain values encoded in them, but those values are being watered down with the current use. But Bitcoin won't be the only currency with these values encoded in the "DNA" of the system, even as they are the first.
Comments