A bit of self-criticism

Bitcoin model

I recently learned about something called Bitcoin, a virtual currency described as "one of the first implementations of a concept called crypto-currency, which was first described in 1998 by Wei Dai on the cypherpunks mailing list. Building upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, Bitcoin is designed around the idea of a new form of money that uses cryptography to control its creation and transactions, rather than relying on central authorities" (bitcoin.org).

At first, I thought the Bitcoin model was something like Paypal, a secure system of online payment transactions.  I  thought bitcoins were something like Euros, a currency backed by, and used within, a system of governments.  I also considered Bitcoin to be some kind of credit system.  All in all, my narrow, linear thinking was once again completely off-base.  I had to climb out of my ideological model to question what money actually is, and from where it derives its inherent value and security.  I had to let go of the image of gold bars sitting in a steel vault in Fort Knox, KY.  I had to let go of the notion that, somehow, those gold bars guaranteed my concept of security and value.  "In God we trust" really means the paper (or coin or credit card) I give you is valued and secured by our mutual assumption of what those gold bars represent.  I suspect danah boyd would describe this model as atom-ic. 

Bitcoin is a new model that invites us to take a completely different view on the creation and security of an economic system whose "rules are enforced collectively by the network."  It creates and secures "money" with technology (bits) rather than steel and gold (atoms).  The fundamentals of the Bitcoin system are laid out on its web site, however,  I don't think the basic economic principles are what frightens me.  I think there are 2 basic threats that this new Bitcoin system brings: 1) it challenges my assumptions of security by guaranteeing value with bits rather than atoms, 2) it creates a new power structure that challenges my assumption of the status quo.

It's a revelation for me to recognize myself as the one who feels threatened by Bitcoin; in this scenario, I am the one whose assumptions seek to maintain the status quo!  Gulp.   I want to be the rebel, but I can't be the one who advocates change without first recognizing my own, threatened position.  I suppose this blog post is a preview of my presentation this week.  Hopefully, I will be able to show you how my espoused theories were in conflict with my theories in action.   It was both wonderful and awful to recognize this in myself. 

By the way, Bitcoin has come under attack in the news this week.  I am neither for nor against Bitcoin, I used it as an example to make my point.  It is interesting, however, to dissect the challenges to Bitcoin.  Valid or otherwise, I can see the threatened powers-that-be behind these attacks.   

I hope I haven't convinced you I'm crazy.  This has been a very interesting week for me.  Thanks for listening to my madness.  Susan