Bitcoin vs. Big Government

Interest in Bitcoin has surged along with its valuation. Last
week saw its exchange rate soar past $100 for the first time ever,
landing the virtual currency on the front pages of The
Washington Post
and the Financial Times. Yet the
media frenzy, which has focused on the rapidly rising valuation and
its possible causes stemming from the bank crisis in Cyprus, is
overlooking Bitcoin’s true radical significance—that it can’t be
controlled by government.

In his new book,
This Machine Kills Secrets
, Andy Greenberg recounts
the history of the 1990s cypherpunk movement that paved the way for
WikiLeaks and Anonymous. The early Internet’s crypto-anarchists
foresaw a future world in which widely available cryptography
secured personal anonymity and privacy to such an extent that it
threatened the authority of the state. Their key insight, Greenberg
explains, is that anything that can be done cryptographically can
be done without government oversight.

Before eBay or WikiLeaks, cypherpunks like Tim May imagined
online markets for information in which buyers and sellers
transacted anonymously using untraceable digital cash. Anything
from state secrets to private credit reports would no doubt become
available for the right price. These ideas were notoriously taken
to the next level by the radical libertarian Jim Bell who proposed
a system  for anonymously crowdfunding the assassination of
corrupt government officials.

While almost all the technology necessary for such black markets
was available when the cypherpunks were writing, there was one
conspicuous exception: true digital cash.

Until Bitcoin, virtual currencies have in one way or another
relied on a third party intermediary, such as a bank or a creditYou can read the rest of this article at: