[LINK] Bitcoin Virtual Currency

[Richard Chirgwin]

I don't know about dealing with journalist-enthusiasts, but I've taken a 
more sceptical position in The Register (excuse the plug):

www.theregister.co.uk/2011/06/08/bitcoin_under_attack/
and
www.theregister.co.uk/2011/06/14/bitcoin_slump/

And I certainly see symptoms of enthusiasts at work. Criticism is not 
welcome.

Some thoughts.

1. Regardless of the things that excite people, the relatively small 
scale of Bitcoin makes it subject to value manipulation. If traders can 
damage huge national currencies, then you certainly don't need George 
Soros scale to play with Bitcoin value. Just buy a small bucket of them, 
and watch the value rise.

2. Anybody who thinks it exempts them from local laws is foolish. You 
have to, at some point, find some way to exchange Bitcoins for a 
convertible currency. That transaction, in Australia (if a local 
exchange existed), would attract GST as a starting point, since the 
Bitcoin exchange is providing a service.

3. Anybody joining Bitcoin today is similarly foolish, in my opinion. 
They are enriching the early adopters, with little prospect of accruing 
a similar benefit, and they're joining just at that time when 
authorities are starting to look at ways in which Bitcoin might break 
laws (eg, money laundering).

4. Journalists should be *extremely* wary of becoming Bitcoin boosters. 
In particular, a journalist who buys Bitcoins and then boosts them is 
acting unethically.

5. I can easily imagine that while Bitcoins are not a currency, they 
already fill the characteristics of some kind of trading instrument that 
*is* regulated. IANAL, so I don't know what definition might be applied, 
but the idea that they exist outside all regulations is dangerously 
simplistic.

The journalist probably wasn't reading a press release, but rather 
getting swept up in a quite simplistic and unhealthy media frenzy.

RC

On 15/06/11 9:15 AM, Tom Worthington wrote:
> On Mon, 2011-06-13 at 09:27 +0000, stephen at melbpc.org.au wrote:
>> P2P Virtual Currency<http://www.bitcoin.org>  ...
>> Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central
>> authority issues new money, or tracks transactions.  ...
> Had a call from a journalist asking about BitCoin a few days ago. They
> seemed very excited by the idea that it was untraceable and could not be
> exchanged for currency in the real world and therefore was not
> controllable and transactions were not taxable by governments. I started
> to tell them that Bitcoin was not the first e-currency and that
> governments have found ways to regulate and tax such systems in the
> past.
>
> The journalist seemed insulted that I did not find Bitcoin as new and
> exciting as whatever media release they were reading. The call then
> ended. That may have been due to the interference from all the equipment
> surrounding my office, or the journalist hung up and called someone who
> would agree with whatever they wanted their story to say.
>
>