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'Non-political' Bitcoin is 'like internet – can’t be put away easily'

Published time: May 17, 2013 14:05
Edited time: May 17, 2013 14:56
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The crackdown campaign against the Bitcoin payment system was instigated by banks which see it as an “existential threat” to current financial system “crashing down and squeezing so much human energy out of our planet,” blogger Mike Gogulski told RT.

The US government has never made secret that it is keeping a close eye on virtual currency Bitcoin, but now it appears that scrutiny has turned into a crackdown on the decentralized digital currency.

On Tuesday the US Department of Homeland Security blocked the ability to process Bitcoin payments through Dwolla, an Iowa-based startup that allows customers to transfer their dollars into Bitcoins.

The authorities allege that the company has been operating as an unlicensed money transmitting business, because Dwolla was not registered with the Department of Treasury’s network.

The timing of the crackdown is no coincidence. On May 17 in San Jose, Silicon Valley, California starts ‘Bitcoin 2013: The Future of Payments’,  summit entirely focused on Bitcoin and its growing impact on the payments landscape.

The popularity of Bitcoin is skyrocketing, as the use of electronic currency looks more appealing to investors and customers worldwide. That threatens the long-held bread that governments and banks have had on currency regulation and interest rate manipulation, RT's Marina Portnaya explains.

To its disappointment, the financial industry finds itself being removed from the way the Bitcoin business is operating, while some American small businesses are starting to accept Bitcoins.

The Bitcoin concept first emerged in 2008. The idea was for users to avoid banks when transferring cash by connecting directly with each other.

“Bitcoin is a fundamental protocol for money over the internet. Launched in January 2009, Bitcoin is a decentralized peer-to-peer payment system, entirely regulated by its users. Whereas legacy payment systems rely on third-party intermediaries for access, execution and management, Bitcoin transactions are secured through a distributed computing network, seamlessly enabling direct monetary transactions.

The supply of Bitcoins is regulated by software and cannot be manipulated by any government, bank, organization or individual. There have been more than 11 million Bitcoins created to date, with 21 million maximum possible. Visit bitcoin.org for more information.”

(From press release on www.prweb.com)

Customers worldwide can spend Bitcoins to buy things without having to pay the normal, higher fees, so there is little wonder it's becoming so popular.

The currency's value reached a record high in April, and its subsequent decline is partly being put down to the pressure of red tape.

The US government has targeted Dwolla exchange company probably because the banks, which “actually own the US government” are “running scared,” political activist and blogger Mike Gogulski told RT. At the time of global crisis the banks believe Bitcoin is “an existential threat” that could “pull legs from under them.”

Many believe Bitcoin is either extremely volatile or pure and simple bubble, but Gogulski believes that trusting a currency is a matter of faith.

Humans have used many items as money, while sometimes devaluated banknotes were burnt in ovens to heat homes.

“Bitcoin is a long-term play right now. I see Bitcoin holding a much brighter future for us where we don’t have the weight of the banks and financial industry crashing down and squeezing so much human energy out of our planet,” Gogulski said.

History is going to prove that there is room for independent currencies, whether they're digital or not, he believes.

Bitcoin, just like the internet, is “out there” and cannot be put away easily, he pointed out.

“An independent non-political currency is going to arise and supplement, or at least strongly complement the existing national currencies,” Gogulski shared.

Bitcoin is a currency with no material value, but that is not a problem, because “to some extent no currency at all has a material value,” he said

“The value of currency arises by means of social consensus. When we agree that a certain thing, whether it be atoms of gold or pieces of paper, or numbers in an accounting ledger, or Bitcoins, has value and we trade in it, and express our faith in it that way – than it does require value through social exchange,” political activist explained.

“How does it acquire value? It acquires value by people using it," Gogulski concluded.

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