Digital Gold

“Turns out, in China, there’s no ethics—there’s no moral obligation,” Bobby would say of his discovery, with a hint of amusement and a dash of frustration. “Westerners see that as a bad thing. Chinese see that as, ‘We’re being flexible.’”

Debt: The First 5,000 Years.

Whereas in the United States, banks were unwilling to do work unless they were explicitly given a green light by regulators—and sometimes not even then—in the Wild West of China, the banks would try just about anything until they were explicitly told it was not allowed.

While Wall Street research reports were talking about the possibility of a new payment system, the best minds in the Valley were thinking in much more ambitious terms after looking deeply at the code underlying Bitcoin. These views were crystallized, and projected to a much broader audience, the day after Wences’s breakfast with Hoffman, when Marc Andreessen, cofounder of the investment firm that had put $25 million into Coinbase, published a lengthy cri de coeur on the New York Times website, explaining what had the Valley so worked up.
“The gulf between what the press and many regular people believe Bitcoin is, and what a growing critical mass of technologists believe Bitcoin is, remains enormous,” Andreessen explained.

We foresee a real possibility that all currencies go digital and competition eliminates all currencies from non-effective governments. The power of friction-free transactions over the internet will unleash the typical forces of consolidation and globalization and we will end up with six digital currencies: US Dollar, Euro, Yen, Pound, Renminbi, and Bitcoin.
The question then becomes, is Bitcoin viable if the government digital ledger systems are just as good? We think yes, for two reasons:
1. There will always be transactions for which “official money” is less good than Bitcoin
2. If you live outside the US, it is dangerous to have all your money controlled by a state where you have no rights.

The idealists who had been driving the Bitcoin world often got caught up in what they wanted the world to look like, rather than figuring out how to provide the world with something it would want.

The head of Google’s payments division, Osama Abedier, called Mike in to get a tutorial on the technology. Mike knew that Google had long struggled with how to build its own digital payments system. The program that Abedier was working on, known as Google Wallet, was not creating a new payment system—instead it was looking to provide a new means of using existing credit cards and bank accounts online. All the fees and restrictions with credit cards and bank accounts still applied to Google Wallet.
Mike gave Abedier a lesson on the basics of a virtual currency that had no central authority and essentially no transaction fees. When Mike finished his presentation, Abedier told him, “I would never admit it outside this room, but this is how payments probably should work.”

Many Bitcoin fanatics would later talk about their ecstatic moments of conversion to the Bitcoin cause, but few were as extreme as Roger’s. While the podcast was still playing, Roger did a search for Bitcoin on the laptop he had on his kitchen table and began making his way through everything he could find.
He was so entranced by the idea of a financial system outside the control of the government that he read clear through the night to the next day. After a short nap, he began reading again and went on reading for a few days until he eventually felt so weak, and so gripped by a sickness taking over his throat, that he called a friend and asked to be taken to the hospital. There he was connected to an IV sack that pumped antibiotics and sedatives into him. It might have been the drugs, but as he lay in his hospital bed, he felt he had found a kind of promised land that he had been waiting for all of his short life—the Galt’s Gulch he had been searching for like a libertarian Indiana Jones.