Pieces of eighthttps://indianexpress.com/article/opinion/editorials/pieces-of-eight/

Pieces of eight

If a market for bitcoins exists, it should be regulated rather than demonised

Newsweek, which vanished into the ether last year, returned to print with a cover story unmasking Satoshi Nakamoto, the pseudonymous creator of the algorithm which generates Bitcoins. Too bad that this was the 10th Nakamoto to be unmasked, all in error. And though this candidate was the first to be born named Satoshi Nakamoto, the real creator of Bitcoin surfaced on the net to trash the Newsweek story, posting from an authentic ID that had gone silent five years ago.

The fascination with the identity of the creator of an anonymous currency is ironic. It has distracted attention from the real Bitcoin story — its runaway success shows that there is a demand for a completely dematerialised currency which is not based on physical value but only on the calculus of scarcity, and which can be transmitted across the internet, bypassing formal banking channels. A market for such currencies obviously exists, and nations should collaborate to regulate them rather than driving them offshore and underground.

In the media, Bitcoin coverage has been driven by the fear of the unknown. Stories highlight the popularity of Bitcoin with internet escrow services which facilitate peer to peer trades in drugs and other contraband. They neglect to mention that Bitcoin powers a tiny fraction of the global contraband trade, almost all of which is transacted in paper currencies like dollars and euros. Gleeful reports abound about excessive Bitcoin volatility, about China banning the currency to prevent offshoring, about the biggest Bitcoin agency being hacked and filing for bankruptcy. Bitcoin is indeed hard to track but if a market exists, it should be regulated rather than demonised. Wild West curiosities today, digital currencies will be as mainstream as plastic money in the very near future.