Just as the Internet forever changed (some say destroyed) publishing, a digital currency known as Bitcoin threatens to change forever the way we do banking. Bitcoin is the first digital currency that is distributed via P2P network. No bank is required between the coin owner and whomever they are dealing with.
Decentralization is the basis for Bitcoin’s security model. Bitcoins can be sent to anyone with a Bitcoin address and a hash is used to secure the transactions. Other benefits include nontaxable transactions and the inability to have your accounts frozen. Because the transactions
leave no paper trail [Update: A reader left this link to Bitcoin Explorer which shows the trail] and are completely anonymous, several discussions have centered around the illegal possibilities of using untraceable money:
- Drug deals
- Hiring a hitman
While these possibilities certainly exist, it is more likely that major banks and governments will kill it before it gains too much traction. After all, what government would allow citizens to purchase goods and service stax free (well, more tax free than they already do on the Internet). What do you think about Bitcoin?
12 responses to “Bitcoin is the new black (market)”
if anyone is interested in reading more on bitcoin check out this ebook
isn*t tax creeping in until things are produced by work and rescources that got bought by coins?
Just learned about bitcoins and they seem such an amazing idea for me, money that’s totally global and independant of any government or the banking cartel. They’re especially great for me as I live in almost a 3rd world country, and with bitcoins I can quickly send money to anyone anywhere in the world and all that completely free!
Hoping it will get widely known and used by everyone on the world, I’m telling everyone about them.
And as for illegal uses, there have always been cash – even more anonymous. But I can imagine governments paid by private banks starting another “war on terror” to take another freedom from us :(
Why do people keep connecting BitCoin with “tax-free”? If you buy in your local jurisdiction that business will have to report the transaction for tax purposes just like cash, and if you buy from outside of it you will get slapped with taxes when the package comes through customs. How is that tax-free?
Not if you buy person to person. You could, for example, do freelance for a company and if they paid in Bitcoin, they could do it completely under the RADAR.
The banks will kill Bitcoin as much as RIAA killed Bittorrent. Or was it the other way around?
Its a big misconception that bitcoins are untraceable. I would say that they are more transparent and tracable than all other currencies. Just check out http://blockexplorer.com/
Thanks for that link!
> After all, what government would allow citizens to purchase goods and service stax free
oh you mean like how they outlawed cash?
It’s decentralized nature means that it cannot be ‘killed’ by governments or major banks. It can be outlawed, but it can still be used for whatever purpose you choose.
The best aspect of bitcoin is its predetermined inflation. No one can decided to print more bitcoins than the algorithm allows. The fact that it can be used by the black market is a side effect. One that plagues another system off untraceable money: cash.
Agreed and I don’t buy the old argument that we will be a cashless society in the future. Cash is still needed for important cultural action: tipping. Granted, you can tip waitstaff on plastic, but not valets, newspaper deliveryman, etc.