Eight months ago, Senator Chuck Schumer started a moral crusade against geekdom’s currency. In the red corner: a bureaucrat, in the blue corner: geeks, hackers and anarchists.
It’s an online form of money laundering… anonymous, secure and untraceable; a lethal combination… before it escalates any further, we are going to see that it gets shut down and shut down now.
Strong words from a weak politician. Eight months later and the Silk Road is booming. Senator Schumer’s statement was a blatant political move and nothing resembling a mote of an attack against Silk Road marketplace. Had he truly wanted to cause trouble for the Silk Road, he would have a) notified the authorities and b) said nothing. Instead he chose to wage a full-scale advertisement of the Silk Road, letting its existence be known internationally.
For those of us who had been with bitcoin since early on, we would become excited at the smallest appearance of bitcoin in the press. We all knew the amazing ramifications of this cryptocurrency (or commodity), and were awaiting that inevitable breakthrough that came a few years early with Schumer’s announcement. It was not the right kind of press we were hoping for, but press is press. And while dealing with the moral panic, it gave you a platform for expounding on the social benefits of bitcoin.
The biggest point to press home was that bitcoin was here to stay and would not, could not be shut down. That any attack on this fledgling currency would not stop the illicit or illegal uses, but would harm the massive positive social good. Illegitimate use would continue, legitimate use would discontinue.
Science & technology are neutral. The atom bomb can take us to new worlds or wipe entire countries off the earth. Science & technology are neither hostile, nor benign. A hammer can equally be used for creating superb carpentry or for monstrous acts.
Bitcoin is neutral technology. To blame disagreeable use on this new monetary system is shifting the blame away from the perpetrator. We do not reactionarily outlaw the internet because a minority of people occupy dark back alleys and engage in shady practices. We recognise the far greater utility that the internet harbours. Likewise bitcoin is a system which has the potential for enormous positive social good.
“I just can’t see a way of making it available to everyone else without making
it available to them [bad guys]. There’s lots of technologies that are like
that, even military technologies. GPS receivers are a military technology. They
were developed for the military. And terrorists could use GPS receivers to guide
them to their targets. And the only way to stop that is to take it from everyone
else. Imagine if no-one could use GPS receivers. What that would do to the
economy.” – Philip Zimmermann on PGP
Judging from Schumer’s history, it is not worth reading too much into his outburst as he has a history of making bold empty statements. However his statement did mark the start of bitcoin’s media attention. It took a senator’s statement to make bitcoin hip and trendy.
Reuters put out an article which was anti-bitcoin. Quoting verbatim the DEA on bitcoin: “new technologies and schemes perpetrated by drug trafficking networks.”. Most worryingly of all, the largest bitcoin exchange at the time (MtGox) had no contact or company details available and looked extremely shady.
While little information about Bitcoin exchanges is publicly available, an item posted on a website called Bitcoin Watch states that Mt. Gox’s bank account is in Japan, and anecdotal evidence suggests many other exchanges operate outside of the US.
Mt. Gox’s website does not list a phone number, representatives could not be reached via email.
With us running the UK exchange Britcoin (now Intersango), this reflected very poorly on us. People have asked us why we have stated ourselves in favour of regulation. We were forced to make a bold statement at that time to counter-act the bold statements of others. Without decisive action, bitcoin was in danger of being labelled as a scheme for drug-trafficking networks. The fear was that irrational fervour could lead to disastrous short term results.
We called several media outlets explaining about how this was an irrational attack. We even called the author of the Reuter’s article, spent 3 hours explaining to him the intracies of bitcoin and passed him MtGox’s contact details. The next day he put out a turnaround article positive towards bitcoin.
At the time, the development house for Intersango (despite being a UK company), was located in Warsaw, Poland. The Polish exchange Bitomat was close by and we were familiar and friendly, with our groups meeting occasionally. We co-wrote and co-signed a statement together that we put out publically.
13th June 2011
Dear Brett Wolf,
I have become aware of your article and would like to offer you more
information. While MTGox (the largest exchange) is not reachable, I am
able to put you in communication with lead developers as well as the
owners and operators of the 2nd and 3rd biggest exchanges.
Bitomat (Bitomat.pl) – The Polish exchange which today transfered 40,000
$ worth of bitcoins 24 hours.
Britcoin (Britcoin.co.uk) – The UK exchange which transacted 25,000$
worth of bitcoins in the last 24 hours.
Bitcoin was not developed as a means to transact and support the illegal
drug trade. It’s creator and early developers are clearly idealists
wishing to change the inequalities in the world, especially when it
comes to financial transactions.
I am personally in talks with the head of SWIFT which has been the world
standard in banking transfers for 30 years. SWIFT is the backbone of
more than 9000 banks across the world. A more efficient means of
commerce will not only make the world richer but help those less well
If you simply look at the spreads on Western Union, you will see the
While the MTGox owner is unreachable, we are more than happy inform you
as to the nature of bitcoin and it’s true purpose and prolific
As Bitcoin is decentralized, no one is an official spokesperson… A
system like this has it’s advantages and disadvantages. One disadvantage
is that there is no organized and collective movement to champion the
prolific nature of Bitcoin. It would be a shame to lose so much
opportunity for social good and a wealthier world for all its
inhabitants due to the careless and blind dismissal of Bitcoin.
Please contact us.
Donald Norman (Bitcoin advocate – www.bitcoinconsultancy.com)
Skype – [clipped]
+48 7435 435 122
Amir Taaki (http://britcoin.co.uk)
Bartek Szabat http://bitomat.pl
Those who wonder why we advocate regulation of bitcoin exchanges- would you have rather we gave everyone the finger and handed them The Crypto-Anarchist Manifesto? It is fun to play with fire, but not at all prudent.
Note that we did not call for bitcoin to be regulated, but for bitcoin exchanges to be regulated. For people to have a legal recourse if an exchange loses their money. For exchanges to abide by industry standards. Not to stop people using bitcoins.
The last segment of this saga was when channel4 news invited me in London to be interviewed on bitcoin. It was one of the sharpest and best interviews I ever gave, and every answer was spot on perfect.
The final piece was completely biased and one-sided, being anti-bitcoin. Worse yet they cut me completely (citing time constraints) while only giving air-time to people voicing their anti-bitcoin sentiments. Looking back, they were trying to trip me up for a damning clip to support their slant.
Shame on you channel4. Since this interview, I lost the respect I once had for them. Contrariwise journalists from other organisations have done excellent reporting on bitcoin which instilled in me huge respect for their professionalism and organisations. My favourite was this piece by the BBC. At the beginning of our interview he was skeptical, and by the end he was enthusiastic for bitcoin.
Journalists are people, and most of them want to tell the truth. Despite being conflicted with information, they will try their best to discern the facts. If we only have to call a journalist and explain bitcoin for 3 hours. This is why we will win. This is why truth will prevail.