The MintChip Challenge, Bitcoin and The Dark WebTheodore Iacobuzio |
That’s what my kids would ask about my interest in Bitcoin, the virtual currency that recently tanked from $200 to about $55 apiece. Only to rise again?
Consider the following:
- U.S. retail sales fell in March by more than in nine months, according to the Commerce Department
- Cyprus may be forced to give up much of its gold, as well as its uninsured savings
- President Obama’s new budget includes provisions for capping 401(k)s
These items aren’t related in the sense that there’s a cause-and-effect connection between them. But they are all features of the same environment: a search for safety, whether you’re a consumer or the tax man. In such an environment eulogies for Bitcoin may be premature.
That said, governments are offering alternatives. The Royal Canadian Mint has developed something similar called MintChip, and challenged developers to come up with apps that make the virtual currency easier to use (a wallet won first prize).
Haven’t heard much about MintChip? Funny about that. The reason could very well be that Bitcoin, besides furnishing a refuge for those very consumers wishing to park money outside the financial system and not under a mattress, is largely for use as far as payments are concerned on The Dark Web. At least that’s the assumption, because, you see, nobody really knows. And virtual currency a government “mints” wouldn’t do in the darkness.
The Dark Web is where you buy illegal merchandise, of course.
Ever since the fall of the Berlin wall (25 years ago next year!) there have been various predictions regarding the decline of the nation state, some gleeful and some more in sorrow than in anger. The emergence of non-territorial powers, from WikiLeaks to terrorist organizations has certainly been a feature of the geopolitical scene of the new century. It’s past time for a debate on all this from a financial point of view.
The first prize the Canadian government offered the developers, by the way, was two pounds in gold.
Which is dropping.
Topics: Payments Strategy