Many libertarians love the idea of using Bitcoins as money, because there is a fixed supply. The more important issue is why are those who favor all powerful government and endless money printing not more upset about Bitcoins?
Let me point to three explanations everyone should consider:
1. Getting a Bitcoin wallet is just a matter of buying them as you would any other good or service, but there is no privacy in choosing Bitcoin specifically. If Bitcoin were to become universal, the left would have a major breakthrough: The end of cash transactions as we know them, a fully digital currency which can be tracked and analyzed to the Nth degree. A currency like the dollar, that is based on faith and credibility but no hard backing.
2. Perhaps Mr. Obama and the Treasury have calculated that in addition to ending cash hoarding, the rise of a universal digital currency can undermine far more tangible and private forms of wealth preservation, such as precious metals.
3. Also, Mr. Obama and the left are patient. Once Bitcoin or some other alternative is in wide use, regulators can eventually force the creation of more Bitcoins to expand the money supply. Just food for thought. Alternative currencies will continue to gain popularity, and Mr. Obama and the Treasury Department know it. Perhaps they are merely bending to the public will, or perhaps they figure that Bitcoin is their least worst option.
In the meantime, lots of speculators are making big bucks trading Bitcoins. Many respected observers also believe that Bitcoins are an unstoppable freedom trend that is too late for the federal establishment to stop. They could be right too.
What do you think?