BitCoins: considered harmful

Bitcoins, the anonymous digital currency that is used to settle many transactions online, are not unlawful in most jurisdictions.

As a privacy nerd and a crypto geek, I think they’re pretty cool. But the more I think about them, the more I think that the system should be outlawed in a smart way that doesn’t just drive them further underground. I’m not sure such a smart way exists, by the way; but that doesn’t alter my case that they are essentially harmful.

Anonymity in expression is a vital part of the right to free speech. You don’t have to take anonymous comments seriously (in fact, you shouldn’t, on the whole, take them seriously); but you should be able to publish comments anonymously. The anti-liberals who often claim that those with nothing to hide have nothing to fear from the state’s rights to snoop, to identify and to punish those who speak wrongly want to introduce censorship and end anonymous commentary; but history tells us that the “nothing to hide, nothing to fear” argument is mostly rehearsed by tyrants.

Commerce, however, is different. Trade should always be open and in public. The fact that much trade carried out in official currencies, pounds, dollars, euros and the like, is often private, in cash, unreported, untaxed should be a warning. We can argue how much they should be – 0.4 or 0.4 percent of the economy – but  if we are not to live in an anarchy, we need taxes to pay for government services. Tax avoidance and tax fraud are widespread because we make use of the ability to carry out anonymous transactions in cash.

Trade conduced in BitCoins is taxable; most of it isn’t taxed because, like cash, it’s hard to trace. And there lies the rub. We have a duty as citizens to pay our taxes; they’re not optional. Nothing to hide, nothing to fear?

 

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