Bitcoin’s amazingly bad, but kind of great, week

Bank runs, an Apple ban, arrests and a Russian crackdown make for bad headlines, but don't count the currency out

Topics: Bitcoin, Money, Russia, MtGox, coinbase, cryptocurrency, Apple, , ,

Bitcoin's amazingly bad, but kind of great, week (Credit: Reuters/Jim Urquhart)

What do Vladimir Putin and Apple have in common? Answer: They don’t like bitcoin, the so-called cryptocurrency that just endured its most newsy week ever.

On Thursday, Russia’s prosecutor general’s office banned the use of bitcoin and all other cryptocurrencies, declaring that “the monitoring of the use of virtual currencies shows an increasing interest in them, including for the purpose of money laundering profit obtained through illegal means.”

Russia’s crackdown came one day after Apple, without explanation, dumped the last remaining bitcoin “wallet” app, Blockchain, from the App Store. (In bitcoin parlance, a “wallet” app allows for the secure storage and transmission of bitcoins.) In response, some outraged bitcoinistas videoed themselves smashing their iPhones.

Both actions occurred in the wake of last week’s arrest of a Brooklyn, N.Y., bitcoin entrepreneur, Charlie Shrem, on charges of money laundering linked to transactions on the Silk Road online drug emporium.

Throw in a virtual bank run on the one-time king of the bitcoin hill, MtGox, and a rash of thefts from accounts at Coinbase, a bitcoin wallet service backed by the elite Silicon Valley venture capital firm Andreessen Horowitz, and it’s no wonder that the price of bitcoin has dropped 20 percent over the past couple of days. As economics commentator Felix Salmon warned on Friday morning, bitcoin’s quest to become entrenched as a legitimate payment mechanism accountable to no one but its own users faces serious opposition from existing incumbents, both of the government, and corporate, variety.

You Might Also Like

But there’s another lesson to be drawn here. It’s much worse to be ignored than to be considered a threat. If the creators of Blockchain are correct, and Apple has a ban on all bitcoin-related apps because it sees them as competitors to its own payment processing monopoly, then isn’t that all the more reason to take bitcoin seriously? Likewise, having Putin’s Russia declare you an enemy of the state is practically a badge of honor. Yes, it’s tempting to look at the travails of MtGox and the constantly bubbling stories of thefts and hacks as proof that bitcoin is not ready for prime time, but those are exactly the growing pains that one would expect from a fast-growing, non-regulated market. The bitcoin survivors will surely be the companies that gain a hard-won reputation for not being unreliable magnets for thieves.

It’s perfectly reasonable for law enforcement authorities and governments to take a dim view of a technology that enables money laundering and tax evasion, and that is actively touted by many of its acolytes as means for breaking the power of the state. But as Sarah Jeong explains at Slate, that doesn’t mean bitcoin is devoid of democratic value.

Money is speech, as Citizens United would have us believe. And as immensely unpopular as that decision is, the court had a point — money is essential to political participation, and restrictions on the use of money in political activities can silence the cause of both the plutocrat and the dissident….

But if money is speech, and free speech can require a certain degree of privacy, even anonymity, particularly so when the speaker supports an unpopular political cause — then why don’t we have a right to anonymous payments?

When I first wrote about bitcoin a little under a year ago, I expressed some caution about whether the much-hyped “currency of resistance” would be able to fend off the supervision of government. “The Eye of Sauron will come looking,” I joked. (And whaddya know, here comes Putin!) But perhaps the most impressive aspect of bitcoin’s evolution since then is that even as governments and corporations have started paying seriously negative attention, in the process of doing so they’ve also conferred a distinct air of legitimacy on the entire bitcoin enterprise. A week full of “bad” news just confirms that bitcoin is for real.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails
    Martyna Blaszczyk/National Geographic Traveler Photo Contest

    National Geographic Traveler Photo Contest Entries

    Slide 1

    Pond de l'Archeveche - hundreds thousands of padlocks locked to a bridge by random couples, as a symbol of their eternal love. After another iconic Pont des Arts bridge was cleared of the padlocks in 2010 (as a safety measure), people started to place their love symbols on this one. Today both of the bridges are full of love locks again.

    Anders Andersson/National Geographic Traveler Photo Contest

    National Geographic Traveler Photo Contest Entries

    Slide 2

    A bird's view of tulip fields near Voorhout in the Netherlands, photographed with a drone in April 2015.

    Aashit Desai/National Geographic Traveler Photo Contest

    National Geographic Traveler Photo Contest Entries

    Slide 3

    Angalamman Festival is celebrated every year in a small town called Kaveripattinam in Tamil Nadu. Devotees, numbering in tens of thousands, converge in this town the day after Maha Shivratri to worship the deity Angalamman, meaning 'The Guardian God'. During the festival some of the worshippers paint their faces that personifies Goddess Kali. Other indulge in the ritual of piercing iron rods throughout their cheeks.

    Allan Gichigi/National Geographic Traveler Photo Contest

    National Geographic Traveler Photo Contest Entries

    Slide 4

    Kit Mikai is a natural rock formation about 40m high found in Western Kenya. She goes up the rocks regularly to meditate. Kit Mikai, Kenya

    Chris Ludlow/National Geographic Traveler Photo Contest

    National Geographic Traveler Photo Contest Entries

    Slide 5

    On a weekend trip to buffalo from Toronto we made a pit stop at Niagara Falls on the Canadian side. I took this shot with my nexus 5 smartphone. I was randomly shooting the falls themselves from different viewpoints when I happened to get a pretty lucky and interesting shot of this lone seagull on patrol over the falls. I didn't even realize I had captured it in the shot until I went back through the photos a few days later

    Jassen T./National Geographic Traveler Photo Contest

    National Geographic Traveler Photo Contest Entries

    Slide 6

    Incredibly beautiful and extremely remote. Koehn Lake, Mojave Desert, California. Aerial Image.

    Howard Singleton/National Geographic Traveler Photo Contest

    National Geographic Traveler Photo Contest Entries

    Slide 7

    Lucky timing! The oxpecker was originally sitting on hippo's head. I could see the hippo was going into a huge yawn (threat display?) and the oxpecker had to vacate it's perch. When I snapped the pic, the oxpecker appeared on the verge of being inhaled and was perfectly positioned between the massive gaping jaws of the hippo. The oxpecker also appears to be screeching in terror and back-pedaling to avoid being a snack!

    Abrar Mohsin/National Geographic Traveler Photo Contest

    National Geographic Traveler Photo Contest Entries

    Slide 8

    The Yetis of Nepal - The Aghoris as they are called are marked by colorful body paint and clothes

    Madeline Crowley/National Geographic Traveler Photo Contest

    National Geographic Traveler Photo Contest Entries

    Slide 9

    Taken from a zodiac raft on a painfully cold, rainy day

    Ian Bird/National Geographic Traveler Photo Contest

    National Geographic Traveler Photo Contest Entries

    Slide 10

    This wave is situated right near the CBD of Sydney. Some describe it as the most dangerous wave in Australia, due to it breaking on barnacle covered rocks only a few feet deep and only ten metres from the cliff face. If you fall off you could find yourself in a life and death situation. This photo was taken 300 feet directly above the wave from a helicopter, just as the surfer is pulling into the lip of the barrel.

  • Recent Slide Shows

Comments

Loading Comments...