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  This week is a big hoopla on the Capital Hill where Congress is holding several hearings on Bitcoin -- so called "virtual currency". But even ahead of this hearing that supposed to establish or reject legitimacy of "virtual currency",  Federal Election Commission was marching ahead of progress - holding a hearing whether to allow candidates and PACKs to accept donations in Bitcoin. Apparently there is not enough money in our election system! So what is this Bitcoin? The best explanation could be found on Bloomberg - Are Bitcoins the Criminal's Best Friend? Apparently, they are judging just by two most recent cases - Bitcoin Savings & Trust and Liberty Trust. Yet, remaining Bitcoin exchanges, including Bitcoin Foundation that sent her general counsel to testify on the Hill, hail it as a great financial innovation. Strange, but after success of another recent "successful" innovation - dismantling Glass–Steagall Act that was in the way of CDO and mortgage backed securities - we should expect that our wise representatives in Congress and Government would be a bit more cautious. However, they apparently are either in state of euphoric delusion or hypnotic coma. They have no more real problems to discuss and only other solution than repeal Obamacare to save American economy is Bitcoin economy. Of course, if we are to switch to Bitcoin economy that immediately will erase American National Debt since Bitcoin exchange rate skyrocketed above $500 simply because of the hearing (imagine what it will be if Congress to approve Bitcoin as a legal tender!) and solve all the problem. Listening to all this talk of financial innovations and promises of huge money to be made one can only wonder how much drugs have been purchased on the Silk Road website before it was shutdown and distributed for free by Bitcoin's supporters. I guess including the output of drugs (consider how much legalizing of pot will do for the country!) into the Gross Domestic Product will certainly justify all this excitement!!
   Interestingly enough all this promises of great benefits such as instant payments, and easiness and eliminations of bank fees and ... instant payment do not make any sense. So far there were not so many complaints about speed of transactions with credit card payments or PayPal or Google. And as far as the bank fees concerned -- get real, are all this Bitcoin exchanges will function for free, no fees? Doubt that, because as they say - big money will be made. Of course, there is one issue that credit cards and PayPal or Google cannot provide - anonymity. Bitcoin does provide that (to a some degree because you should be certain that NSA can trace Intenet transactions, even it might take sometime). However, who might need that?... Obviously corrupt politicians, tax cheats (like filthy rich who lost some of tax heavens) and, of course, drug dealers, contract killers and anyone else who needs to launder the money. On another hand, Bitcoins salesmen conveniently forget about Internet scams and hacking and simply what to do if the power or Internet connection is down and you cannot have access. Also pay attention in the video how Bitcoins are made - you should not have any doubt that they are impossible to counterfeit!

Most of us know the history of money - that Indians used sea shells, and such metals as gold, silver and copper coins. Some of us know that during tulip Dutch craze in 17th century tulip bulbs were used as money as well. Now, 300 years later, in the digital age some people are trying to convince us that Bitcoin -- something which is completely intangible, not linked to anything real like amount good and services available even not perfectly measurable, should be better as means of exchange. I can understand these theorists - after all if Madoff was able to convince quite a few sophisticated people that he found a Holy Grail of investment and bankers convinced Greenspan and other regulators that securitized mortgages and CDO are safe financial instruments, they cannot argue that Bitcoins are better than US dollars!

As Woody Allen said it is all "a travesty of a mockery of a sham of a mockery of a travesty of two mockeries of a sham".

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Poll

Should Bitcoin be accepted as ligitimate payment system in US?

17%3 votes
23%4 votes
0%0 votes
5%1 votes
52%9 votes

| 17 votes | Vote | Results

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