The terrifying Bitcoin
When international banking went pear-shaped, we began to see what a gulf there is between real money and the notional kind. Real money is geared to what you have actually earned, and a step over the limit brings you instant punishment. Notional money uses no banknotes, coinage or chequebooks and recognises no restrictions. It’s the stuff that Osborne invents at a computer stroke and calls Quantitative Easing – a form of pure mathematics.
The problem has always been that pure money values are skewed if someone puts a foot wrong in the real-money world. As we’ve seen, over-ambitious investment in Icelandic banks undid the system, as a sack gapes open when you pull one end of the stitching along the top. Within a few months of this happening, a ‘peer-to-peer electronic cash system’ arrived, based on an imagined unit called the Bitcoin. It works like a kind of PayPal, only free. A trader in London can send half a million quid to Moscow instantly, for no charge. Such a mutually beneficial system cannot be regulated or taxed, so traders love it.
The idea is not new. For a long time, communities have used small-scale Local Trading Currencies such as the Bristol pound. The Greeks were quick to invent a drachma/Euro substitute to circumvent the pressure of the EU. But the Bitcoin is far bigger than that, and growing fast. A site called Longbets.org predicts that it will ‘outperform the US Dollar, Gold, Silver, and the stock market by over 100 times over the next two years.’
The US government is frantically trying to shove the genie back into the bottle, complaining that the Bitcoin serves the interests of illegal traders such as drug dealers. This is true, but on the moral high ground, people are pointing out that if we all used the Bitcoin, governments could never again force us to pay for wars that we don’t support. But neither could they levy taxes or exercise financial control of any kind. The Bitcoin is the beginning of systematised anarchy, a space to be watched with mingled excitement and terror.
