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Mar 01 2014

Sen. Joe Manchin (“D”-WV) calls for ban on Bitcoin.

(10 am. – promoted by ek hornbeck)

Senator Joe Manchin wasnts to  ban the Internet currency Bitcoin in the US.

It’s a typical rightwing argument. Don’t like something? Ban it! Cuz, y’know, small government.

The unregulated DIY Internet currency Bitcoin has been a thorn in the side of governments and regulators since it was invented in 2009.  Manchin’s call to “BAN BITCOIN NOW!!!” comes from the latest uproar surrounding Bitcoin: the collapse of  the once-venerable Bitcoin exchange Mt. Gox. Earlier this week, Tokyo-based Mt. Gox went offline, and hundreds of millions of dollars invested there by Bitcoin enthusiasts vanished. Though the concept of this shadowy cryptocurrency would require more than one diary to explain, the money invested in Mt. Gox was very real. The losses were very real, with some people losing tens of thousands or more.

One burned Bitcoin investor from the UK flew all the way to Tokyo to protest in front of Mt Gox’s office, and has become an Internet hero. In a video, he confronts a chubby t-shirt clad Mt. Gox employee who doesn’t look like a financial professional. That’s part of the problem. Mt. Gox was part of a first wave of early adopters of Bitcoin, of computer nerds and geeks who watched their new currency skyrocket from less than $10/BTC soon after its inception to over $1000/BTC earlier this year. Mt. Gox was originally a site that traded Magic: the Gathering trading cards that later got involved  with Bitcoin (Mt.Gox stood for Magic The Gathering Online eXchange). Mt. Gox did not have the necessary expertise, and got in way over their heads. The whereabouts of Mt.Gox’s CEO Mark Karpeles are unknown, as well as the whereabouts of 750,000 BTC (Over $400 million).

Still, Bitcoin enthusiasts are optimistic. Bitcoin crashed to less than $400/BTC after the Mt. Gox collapse, but has rebounded since to $550/BTC. So those who reinvested in Bitcoin during the crash are reaping the rewards, even as those burned by Mt. Gox are dealing with heavy losses. A new wave of much more serious Bitcoin exchanges are banding together and looking to experts from the financial world and are committed to keeping funds secure and handling them wisely.

So, Bitcoin isn’t going anywhere. It’s true that Bitcoin has been used for money laundering and drug trafficking. It’s true that Bitcoin is extremely volatile. However, If Sen. Manchin truly wanted to protect  “working Americans”, why not lump regulations on Bitcoin with a comprehensive package of Wall Street and Bank reforms? If it’s not OK for an enterprising group of nerds and hackers to play with their own brand of risky investment, why is it OK for rich suit-wearing banksters to play craps with our 401k’s on Wall Street?

Joe Manchin’s call to ban Bitcoin is just another center-right neoliberal fail. It’s part of the Neoliberal agenda to give Wall Street carte blanche to do as they please, but Main Street has to be carefully controlled and saved from themselves. Yeah, Bitcoin is risky. Those who invest in Bitcoin know what they’re getting into, and do so at their own risk. Manchin’s proposal is unnecessary and misguided, but not surprising. This is classic center-right Manchin.

There are political implications to this too. Bitcoin enthusiasts are most often young, smart, and computer savvy. Neoliberals like to think that their agenda “plays to the middle”, and wins elections. But, the Bitcoin world will remember this.

What’s that sound? It’s the sound of Bitcoins being deposited in Rand Paul’s presidential campaign coffers, and of the youth vote incrementally moving away from Democrats.

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