Tag: Bitcoin

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

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.

Anti-Capitalist Meetup: Money and Magic Beans by Northsylvania

“Once upon a time there was a poor mother who lived alone with her son, Jack. All they had in the world was an old cow to give them milk. One day the cow stopped giving milk so the woman had to sell her. She told Jack to take the cow to market and to get as much money as he could for her.

On his way to market Jack met a man who wanted to buy the cow. He offered Jack five beans for the cow. Jack knew that his mother would be very angry if he sold the cow for beans. “They are very special beans” said the man. “They are MAGIC ! – they will bring you good luck!” Jack thought that he and his mother needed some good luck, so he gave the cow to the man in return for the magic beans.”

    Jack’s tale begins with some economic truths: trade is grounded in the perceived fair value of an exchange of goods and services and, in times of hardship, people will accept forms of trade that they might not consider otherwise. Fortunately, the old man did not take advantage of Jack’s naive ideas of fair value, as the beans were indeed magic. (Why the man was willing to trade them for a spent cow remains open to question.)

    Most of us make less fanciful decisions, and consider carefully whether an item we are purchasing is a good value, but until recently, most of us have not questioned the inherent worth of cash in pocket, the piece of plastic that represents funds in our account, the place where this money is kept, or the balance between trust and government regulation that keeps the entire system running. Since the financial crash things have begun to change. Kos diarists have examined the role the banks play on a personal level: skimming a little off every transaction, and assessing excessive fees. Others, particularly bobswern and gjohnsit, have assessed the banks’ culpability in crippling the system itself.

This trend has accelerated to the point that trust in banks is becoming increasingly difficult. Rolling Stone’s Matt Taibbi has shown the breadth and depth of manipulations meant to keep tight control of money in a few centers. He also shows exactly how national governments, their courts and regulatory authorities, have become helpless or even complicit in this process.

It’s now evident that there is a ubiquitous culture among the banks to collude and cheat their customers as many times as they can in as many forms as they can conceive,” he said. “And that’s not just surmising. This is just based upon what they’ve been caught at.

The foundation of the Capitalist system itself has been called into question, at least in its present incarnation. If governments can’t regulate their own money supply for the benefit of the majority of their own citizens, and banks abuse their position shamelessly on account of that, people will eventually turn elsewhere. I believe that the rise of virtual currencies, such as the Bitcoin, and alternative trading schemes, such as local scrip and barter exchanges, are symptoms of an economic system that is bent to the breaking point.