OK

This is only a Preview!

You must Publish this diary to make this visible to the public,
or click 'Edit Diary' to make further changes first.

Posting a Diary Entry

Daily Kos welcomes blog articles from readers, known as diaries. The Intro section to a diary should be about three paragraphs long, and is required. The body section is optional, as is the poll, which can have 1 to 15 choices. Descriptive tags are also required to help others find your diary by subject; please don't use "cute" tags.

When you're ready, scroll down below the tags and click Save & Preview. You can edit your diary after it's published by clicking Edit Diary. Polls cannot be edited once they are published.

If this is your first time creating a Diary since the Ajax upgrade, before you enter any text below, please press Ctrl-F5 and then hold down the Shift Key and press your browser's Reload button to refresh its cache with the new script files.

ATTENTION: READ THE RULES.

  1. One diary daily maximum.
  2. Substantive diaries only. If you don't have at least three solid, original paragraphs, you should probably post a comment in an Open Thread.
  3. No repetitive diaries. Take a moment to ensure your topic hasn't been blogged (you can search for Stories and Diaries that already cover this topic), though fresh original analysis is always welcome.
  4. Use the "Body" textbox if your diary entry is longer than three paragraphs.
  5. Any images in your posts must be hosted by an approved image hosting service (one of: imageshack.us, photobucket.com, flickr.com, smugmug.com, allyoucanupload.com, picturetrail.com, mac.com, webshots.com, editgrid.com).
  6. Copying and pasting entire copyrighted works is prohibited. If you do quote something, keep it brief, always provide a link to the original source, and use the <blockquote> tags to clearly identify the quoted material. Violating this rule is grounds for immediate banning.
  7. Be civil. Do not "call out" other users by name in diary titles. Do not use profanity in diary titles. Don't write diaries whose main purpose is to deliberately inflame.
For the complete list of DailyKos diary guidelines, please click here.

Please begin with an informative title:

A recent diary did an interesting job mocking bitcoin, the digital currency favored by libertarians. Although bitcoin has serious flaws, liberals who make fun of it and fail to see the amazing potential of this innovation are missing the point and missing a big opportunity.

I'll get right to the point: Bitcoin is a legal and government-regulated alternative currency, based on open source code. Anyone in the world -- with any political ideology and specific ideas for a different kind of monetary system -- can take the bitcoin code and modify it to create a different digital currency with the features they prefer. Just because bitcoin is the first one that has achieved a multi-billion dollar market cap doesn't mean it will be the last, or necessarily the most successful in the long term.

Many alternative currencies based on the bitcoin code have already been created, ranging from serious ones to joke coins such as "dogecoin." Most of them are get-rich-quick schemes that concentrate wealth in the hands of the early adopters. But it doesn't have to be that way. The technology exists to create a different kind of digital currency based on different values.

The rise of bitcoin -- and the willingness of major governments such as the United States and Germany to consider private digital currencies as real monetary units and legal means of exchange -- has opened the door to the possibility for revolutionary change in the monetary system.

Liberals who mock bitcoin because it's a libertarian invention and currently has some security flaws may be unaware that liberals could create their own digital currencies to compete with bitcoin and the U.S. dollar, and that the security flaws of all digital currencies could be solved with further work by skilled software developers.

The invention of private forms of money may be a much-needed populist alternative to the mainstream, government-issued currency that is managed and distributed according to the interests of Wall Street. The monetary system that controls the U.S. dollar is corrupt, undemocratic and unaccountable, and funnels more and more money to the already rich. When the Federal Reserve creates new money, they do so by giving it to wealthy investment banks, which use it to buy stocks and risky financial instruments such as derivatives. Most of the new dollars being created by the Fed never "trickle down" to ordinary people who run small businesses on Main Street, or who are struggling to pay their bills because of unemployment, underemployment, and the lack of demand in the economy caused by the accumulation of wealth at the top.

The people who created bitcoin didn't like the idea of a centrally managed money supply -- in part because, as libertarians, they are against centralized authority as a matter of principle -- but also in part because everyone should be appalled by the way the mainstream global economic system is based on cronyism at the highest levels: bankers scratching each others backs, giving each other free money created out of thin air and accumulating more and more wealth and power for themselves.

We progressives justifiably believe that some kind of central banking is necessary to create a stable economy, but that doesn't mean we should embrace the Fed and reject the innovation of digital currency entirely. There are ways for digital currencies to include central banking. There are ways for digital currencies to avoid creating more economic inequality, and all the other philosophical and structural problems associated with bitcoin. Alternative cryptocurrencies that learn from the mistakes of bitcoin could make a positive difference! I myself have thought of some detailed ideas for how this could be done, technologically and organizationally. Anything is possible, if you understand the technology and have a creative mind and want to come up with potential solutions to reform the monetary system.

Anyone who wishes to discuss this subject with me in more detail, I invite you to message me. I look forward to a constructive discussion about the potential of digital currency to advance the cause of economic justice.

Intro

You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

Extended (Optional)

Originally posted to Eric Stetson on Wed Feb 12, 2014 at 03:58 PM PST.

Also republished by Changing the Scrip.

EMAIL TO A FRIEND X
Your Email has been sent.