The Edmond Sun

Opinion

March 1, 2014

Bits about Bitcoin and why you should care

WASHINGTON, D.C. — Many people have no clue about this thing called Bitcoin. This week’s collapse of the Mt. Gox Bitcoin exchange demonstrates, it’s time they do.

Bitcoins are virtual currency. Like gold and corn, prices vary daily. Unlike gold and corn, there’s no “there” there — no physical stuff, or even made-up stuff backed by anyone or anything. Bitcoins are bought online and used in an unregulated Bitcoin electronic financial currency system. Some purchase Bitcoins hoping their value changes. Others use them for online payments. No traditional financial institution (like a bank) is used, and payments are made directly, without intermediaries such as PayPal. Thousands of companies now accept Bitcoins.

Millions of user computers hold Bitcoins in “digital wallets” or investors use online “wallet services.” The Bitcoin system is decentralized by design, operating in international cyberspace, hence subject to cyber theft. To secure anonymity, user identities are encrypted. It’s all very cloak-and-daggerish. That provides advantageous appeal for people who distrust governments and large multinational banks. Bitcoins, temporarily, offer an alternative to both.

However, criminals conducting clandestine transactions may use Bitcoin for illegal drugs, weapons, slave labor or gambling. Forget the quintessential standoff where brief-cased Benjamins are exchanged for illicit goods or services. “First, show me the money.” Nah. With Bitcoin the payment is made online; the illegal matter is simply conveyed. Easy breezy. Bitcoin has the potential to make narcotics and weapons trading, human trafficking and money laundering creepily corporate ... and eerily efficient.

This week, alleged technology and security issues shuttered the portals of Mt. Gox, the world’s once-largest Bitcoin exchange. Millions of customer funds vanished into the thin air in which they were invested — poof! Furthermore, without a pittance of regulation, the value of Bitcoins is exceedingly susceptible to manipulation, and an open range for fraud and abuse. Buyer beware? You betcha.

The question for those involved in this pioneering endeavor is: How can Bitcoin enjoy a vibrant expansion of legitimate commerce while ensuring fundamental consumer protections? The answer requires leadership, vision and acceptance of a basic, balanced, harmonized regulatory regimen. Voluntarily establishing global, industry-wide parameters will prove a formidable challenge given the inherent nature of a cryptocurrency system and stakeholders who seek to operate in an entrepreneurial, innovative netherworld without physical constraints. “We aren’t part of the stink’n system and we la-la-like it.”

Meanwhile, the overall Bitcoin experiment is fast-forwarding at breakneck speed. Absent an industry led effort to address intrinsic pitfalls and liabilities through enhanced self-regulation, it’s simply a matter of time before Bitcoin’s bite draws enough blood to compel policymakers and regulators to action.

BART CHILTON is a commissioner on the U.S. Commodity Futures Trading Commission and the author of “Ponzimonium:  How Scam Artists Are Ripping Off America.” Readers may write to him at: CFTC, Three Lafayette Centre, 1155 21st Street NW, Washington, D.C., 20581; website: www.cftc.gov; email: bchilton@cftc.gov.

1
Text Only
Opinion
  • Sheltons travel for better life for family

    Some time around 1865 a mixed-race African American couple, William and Mary Shelton, made their way from Mississippi to east Texas. Nothing is known for certain of their origins in he Magnolia state, or the circumstances under which they began their new lives in Texas.

    July 29, 2014

  • Film critic Turan produces book

    Kenneth Turan, who is the film critic for National Public Radio’s “Morning Edition,” has written a book “Not to be Missed, Fifty-Four Favorites from a Life Time of Film.” His list of movies span the gamut from the beginnings of filmmaking through the present day.
    There are some surprising omissions on his list. While he includes two films, “A Touch of Evil” and Chimes at Midnight” made by Orson Welles, and one, “The Third Man,” that Welles starred in but did not direct. He did not however, include “Citizen Kane,” that was the first movie Welles made, that is  often cited by both film critics and historians as a favorite film.

    July 28, 2014

  • Logan County’s disputed zone

    Watchers of “Star Trek” may recall the episode from the original series entitled, “Day of the Dove.” In this episode, Captain Kirk and his crew are forced by a series of circumstances into a confrontation with the Klingons. The conflict eventually resolves after Kirk realizes that the circumstances have been intentionally designed by an alien force which feeds off negative emotions, especially fear and anger. Kirk and his crew communicate this fact to the Klingons and the conflict subsides. No longer feeding upon confrontation, the alien force is weakened and successfully driven away.

    July 28, 2014

  • Russell leads in Sun poll

    Polling results of an unscientific poll at www.edmondsun.com show that Steve Russell, GOP candidate for the 5th District congressional seat, is in the lead with 57 percent of the vote ahead of the Aug. 26 runoff election. Thirty readers participated in the online poll.

    July 28, 2014

  • Healthier and Wealthier? Not in Oklahoma

    Increased copays, decreased coverage, diminished health care access, reduced provider budgets and increased frustration are all the outcomes of the Legislature’s 2014 health care funding decisions. Unlike some years in the past when a languishing state economy forced legislators into making cuts, the undesirable outcomes this year could easily have been avoided.

    July 26, 2014

  • Medicaid reform a necessity

    Historically, education spending by the state of Oklahoma has been the largest budget item. This is no longer the case. In recent years, the state of Oklahoma spends more on Medicaid (operated by the Oklahoma Health Care Authority) than common education and higher education combined, according to the state’s Comprehensive Annual Financial Report.

    July 25, 2014

  • Remembering lessons from 1974

    This week marks the 40th anniversary of an important milestone in America’s constitutional history. On July 24, 1974, the Supreme Court voted 8-0 to order the Nixon White House to turn over audiotapes that would prove the president and his close aides were guilty of criminal violations. This ruling established with crystal clarity that the executive branch could not hide behind the shield of executive privilege to protect itself from the consequences of illegal behavior. It was a triumph for the continued vitality of our constitutional form of government.

    July 25, 2014

  • RedBlueAmerica: Is parenting being criminalized in America?

    Debra Harrell was arrested recently after the McDonald’s employee let her daughter spend the day playing in a nearby park while she worked her shift. The South Carolina woman says her daughter had a cell phone in case of danger, and critics say that children once were given the independence to spend a few unsupervised hours in a park.
    Is it a crime to parent “free-range” kids? Does Harrell deserve her problems? Joel Mathis and Ben Boychuk, the RedBlueAmerica columnists, debate the issue.

    July 24, 2014

  • Technology that will stimulate journalism’s future is now here

    To say technology has changed the newspaper media industry is understating the obvious. While much discussion focuses on how we read the news, technology is changing the way we report the news. The image of a reporter showing up to a scene with a pen and a pad is iconic but lost to the vestiges of time.
    I am asked frequently about the future of newspapers and, in particular, what does a successful future look like. For journalists, to be successful is to command multiple technologies and share news with readers in new and exciting ways.

    July 23, 2014

  • New Orleans features its own “Running of the Bulls”

    On July12, the streets of the Warehouse District of New Orleans were filled with thousands of young men who were seeking to avoid being hit with plastic bats wielded by women on roller skates as part of the annual “Running of the Bulls” that takes place in New Orleans.
    The event is based on the “Running of the Bulls” that occurs in Pamplona, Spain, that is  part of an annual occurrence in which a group of bulls rampage through the streets of Pamplona while men run from them to avoid being gored by their sharp horns. That event was introduced to the English-speaking world by Ernest Hemingway, who included scenes from it in his critically acclaimed 1926 novel “The Sun also Rises.”

    July 22, 2014

Poll

The runoff race for the 5th District congressional seat is set for Aug. 26. If the voting were today, which candidate would you support?

Al McAffrey
Tom Guild
Undecided
     View Results