Here’s a curious question to ponder: Why does the U.S. government care so little about Bitcoin?
The Senate last month held its first-ever hearing on digital currencies and news organizations as reputable as the Washington Post labeled the affair: “A Bitcoin lovefest.” Various Obama administration muckety-mucks concluded that while Bitcoin clearly has a dark side attractive to the criminal element in society, the currency has legitimate uses.
Curious reaction, that is. After all, Bitcoin is a negotiable currency; companies including online retailer Overstock.com are accepting it in place of U.S. dollars. Yet, anytime anyone previously has set upon a similar course, the U.S. government has acted harshly to tamp down their conspiratorial aspirations. Just ask Bernard von NotHaus, the creator of Liberty Dollars, who was arrested and prosecuted in 2006 for “making, possessing and selling” a currency. In her victory speech after the conviction, U.S. Attorney Anne Tompkins asserted that: “Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism.”
So, given that Bitcoin’s purpose is to undermine fiat currencies, I ask you again to ponder: Why does our government care so little about Bitcoin — with more than $6 billion in circulation — if it cared so stridently about a rinky-dink effort to distribute about $7 million worth of Liberty Dollars?
The answer tells you why Bitcoin is destined to fail and disappoint the very people who so ardently support it at the moment.
If there’s one reality that has emerged in the wake of the 9/11 attacks, it’s that the American government is increasingly — even excessively — paranoid. It wants to know everything about everyone at every moment. Hence, the NSA spying scandal, which reeks — illegally and immorally — of Orwell’s Big Brother.
Legality and morality, however, have never been government’s strong suit. Information is all it cares about, regardless of the means by which that information is gleaned. And what better way to collect data on money flows than with a digital currency?
At the moment, Uncle Sam has no clue where my spending or your spending happens, unless the government subpoenas MasterCard and American Express — and even then that leaves out a large amount of cash transactions. But if we begin using Bitcoin for our purchases … well, then, Uncle Sam is downright ecstatic because an electronic record tracks our financial meandering all across the globe.
And do not buy into those lies that Bitcoin is untraceable.
Everything with an electronic footprint is traceable these days. And you don’t even have to be that savvy to follow Bitcoin transactions around the web. Indeed, researchers at University College Dublin — among several others — used publically available data floating around the internet and found that online activity in Bitcoin “is far from anonymous.” More darkly, they note that parties using marked Bitcoins could track a great deal more information on buyers and sellers.
Would government ever act to mark Bitcoins and then trace their flow for the government’s own paranoid purposes? I refer you back to the NSA spying scandal …
And don’t think Uncle Sam isn’t hip to Bitcoin. The largest owner of Bitcoins today is, in fact, the U.S. government, which seized 144,336 Bitcoins — worth more than $92 million at the moment — in closing down Silk Road, a black-market website.
The Better Investment is the Anti-Bitcoin Currency
Simply put: Regardless of all the chatter about Bitcoin — good, bad and effusive — the currency’s greatest weakness is the selling point that proponents talk up the most … online anonymity that undermines fiat currencies.
The fact that Bitcoin is an online currency means it’s not as anonymous as proponents assume it to be. It’s traceable. And that is precisely why the U.S. government does not throw a conniption fit about the crypto-currency. It wants Bitcoin and other digital currencies to exist. It wants them to take hold universally. The greater the volume of transactions that occur digitally, the easier it is for government to covertly gather financial data on us.
Which is why I will forever remain a fan of gold and silver. They’re not only anti-dollar currencies to protect us from the constant and continual devaluation of the greenbacks in our savings accounts, they are now the anti-digital currency to protect us from invasive government snooping.
There’s no question that currency as we know it will one day vanish and that digital dollars and cents are all that we will have. But even in that world — actually, specifically in that world — it will be gold and silver that provides the only opportunity for financial anonymity. That’s why I continue to buy gold and silver coins. It’s not hard to see the future if you look. Anytime government shrugs at something you know it should care about, chances are government has an ulterior motive.
Beware of what Bitcoin represents.
Until next time, stay Sovereign …
Jeff D. Opdyke
Editor, Profit Seeker