The buzz about bitcoins

Bitcoin, the revolutionary virtual crypto-currency that's taking the whole world by storm, has been called everything from "the doom of the dollar" to "the global economy's last safe haven". Whether an impractical libertarian reverie or a house of cards just waiting to cave in, Bitcoins have moved on from the shady back-alleys of techie territory and are fast approaching the bourgeois border.

At first glance, the Bitcoin peer-to-peer network reminds the average cyber-citizen of popular file-sharing protocol BitTorrent. It's entire existence rests on a community of anarchist number-crunchers who believe in it like a certain fairytale emperor believed in his “new clothes”. You can't hold a Bitcoin in your hand, but you can dig it up, put it in your e-wallet, and then go buy an ice-cream from anybody who's looney enough to take your “money”. How? Simple, just work your way through a series of mind-numbing algorithms; if you're done fast enough, you deserve a Bitcoin (and a pat on the back). If that's too formidable a task, google one of the numerous exchanges on the web that'll transmogrify your hard-earned dollars and dineros into binary money made magically out of thin air.

Can't get your head around Bitcoin? Well digital currencies have been around for a while now like Paypal. What sets Bitcoin apart is that it's decentralized and untraceable. This means you don't have the government breathing down your back with a hardback “Rules and Regulations” manual. Anonymous transactions provide the free pass all tax-skimmers and drug-dealers dream about. But it's not all felony and fraud. With bank secrecy law becoming a thing of the past, privacy and liberty of the free individual in regards to activities that are more embarrassing than criminal are on the line.

But truth be told, it's unlikely that Bitcoins will become the moolah of the masses, as things are now. Bitcoins were devised so that only 21 million can exist at a time. Sure, the debt-ridden Cypriots have lost all faith in banks and gone over to the digi-side. And no doubt the Iranians are using Bitcoins to skirt around American sanctions. But it is a system wired to explode sooner or later, and when it does, what happens then? The US is already attempting all sorts of break-ins, fumbling for loopholes being the control freak it is. The Department of Homeland security recently closed down an account belonging to Mt. Gox, the largest Bitcoin trader, over falsified documents. It's even cooking up new virtual currency laws that'll have users registers under the government.

You really can't call the US the bad guys here. With no adherence to national borders, you can “carry” Bitcoins without the customs agent detecting how much you have on you. On the other hand, hackers are stealing Bitcoins from the digital wallets, hijacking computers to create new ones, and shutting down exchange sites that's lead values to plummet like crazy. In the fast-moving Bitcoin world, there are even signs of an aristocracy and a pleb society, i.e., latecomers who buy in at increasing dollar and euro prices. No strings attached might not be the best option (or even an option at all) for us ordinary folks right now. Without a Bitcoin Central Bank, apolitical money might just be a dangerous illusion waiting to go wrong. There's also talk of a surge in contracted murders and illegal activity, since online black markets like Silk Road and other shady back alleys of the internet practically run on Bitcoins.

And yet business has been very good. Not only does Bitcoin boast a billion-dollar market (whatever that means), its cult following had their very first congregation in San Francisco last month. Apparently, Bitcoin ATMs and Bitcoin cards will soon become a reality, along with services on Twitter, and apps for transactions and your e-wallet.

Bitcoins might not be the change we can believe in unless it offers something paper money doesn't. It doesn't have the best state-backing either. Nothing gets done without a call from the guys upstairs and they're not convinced - why would they just give up the freehold they've possessed for time immemorial? But with everything going wireless, “Bitcoin will do to money what email did to the postal service”, even if it isn't in our lifetime.