Buying Something with Nothing
Two men approach each other in a field of overgrown thickets of brush, one with a bale of golden wheat wrapped in cloth and thrown over his shoulder, the other encouraging two young cattle to follow him. They stop when they get close enough to make eye contact, nod, and exchange pleasantries.
The one man drops his heavy gathering of grain, wipes the sweat trickling down his forehead, and picks up the loose, hemp ropes encircling the cattle’s neck. He walks away with his cattle, leaving the grain behind for the other man. On the forlorn Pacific Coast, Native Americans gather the abandoned shells of molluscs sinking into the wet sand of an ebbing tide; women with long skirts rimmed with ocean foam collect the shells in their woven baskets to exchange with the fishermen for a few trout. In the Sahara, the beating rays of sun reflect off the irregular metal coins in the coarse, dusty hands of a peddler who raises them above his head to a man concealed in rich burgundy and royal blue cloths atop a camel, with only his almond eyes exposed to the air. In pre-renaissance London, a hand grasps a calico pouch of clinking gold coins, the other clutches a few paper notes, the boy weaving through the narrow and crowded cobbled street, pushing past street vendors shaking slabs of meat in the faces of prospective buyers and busty women in corsets pouring used bath water out of second-story windows.
A fatigued mother of a war-torn family in adolescent America stuffs pillow-cases with worthless continentals. Men in fedoras and crisp suits buy and sell stock in high-rise office-buildings on the paved streets of New York City while women with thin, elegant cigarettes held in one hand up to red stained lips, drop a few gold coins in the hands of a beggar with the other. A rough hand slides the face of Ben Franklin on a hundred dollar bill across a low-lit table. A woman wields influence over the world from her Beverly Hills mansion on the commercialized Pacific Coast, her manicured finger moving the cursor on her laptop to the red button purchase. Even though she’s made millions off her calorie-free margarita mix, years have past since she’s seen any of it, physically held it in her hands.
She buys trinkets and treasures, ladyfingers and luxuries without equating the purchases to dollar bills, moving farther and farther away with every press of the button, a growing abstraction from her money. Americans started with the most tangible and trackable form of currency available; cows. A living being that they could look at and count, point a finger at, touch, and even recognize, to prove the legitimacy of their exchange. We used forms of currency made available to us in abundance; those near the ocean used shells and those near surpluses of clay used round, painted beads. We used paper money, went on the gold standard, created the concept of loans, credit, and balance, came off the gold standard, returned to bills. But the objects of exchange had always been tangible; until the revolution of technology, when computers evolved from hulky and government owned, to commonly available in homes and offices across America.
Society changed forever, the economy changed forever, shopping changed forever. Now, the average American woman buys new Dior sunglasses or a vintage pair of pumps with only a 12 digit code that she types in five seconds, then receives her items in just days. Now take away the credit card. Without that thin piece of plastic, a random sequence of digits stands alone between the woman and her Jimmy-Choo’s. Here lies the surface-level explanation for Bitcoin, before further research drops the average-American’s level of understanding into a technical rabbit hole.
Roger Burdock, a Bitcointalk forum member describes the ideal goal behind Bitcoin as “a fixed supply, a first-of-its-kind, global-in-scale, voluntary, decentralized open-source digital currency and payment network that enables direct, peer-to-peer, borderless, pseudo-anonymous, nearly-instantaneous, nearly-free and irreversible cash-like transfers of value.” As an unregulated, digital form of currency, Bitcoin revolutionizes the way Americans view money transactions by creating a forum for person-to-person transactions that eliminate the middle-man. This means that users of Bitcoins buy and sell under a username unconnected to their true identity, without having to pay additional money to credit card companies and banks with each transaction. Furthermore, Bitcoin can be used internationally and does not fluctuate in accordance with government run systems for currency. The network instead creates Bitcoins at a predictable rate.
A circulation of a little above 12.5 million Bitcoins exists today, which will continue to rise at an expected rate monitored by complicated, mathematical logarithms until the number rises to 21 million at the estimated year of 2140. But let’s go back to 1776 when the Declaration of Independence first proclaimed the United States a nation. We threw tea into the river and smashed small-porcelain cups, we tarred and hung a few tax-collectors, sewed our star-spangled banner and thrust our pistols into the air as we took a swig of good ol’ American ale. We pride ourselves on freedom and equality, a kind of screw-the-system pride that empowered us to fight the American Revolution in order to choose how we run our government and society, which explains the particular success of Bitcoin in America.
While he wishes to remain anonymous, denying any relation to the Bitcoin enterprise, Satoshi Nakamoto has been recognized as the creator of Bitcoin. Living in a modest home in Temple City, California, this 64-year-old Japanese-American wishes to live a quiet and secluded life. Gavin Andresen, the scientist behind the development of Bitcoin, explained that Nakamoto ” doesn’t like the system we have today and wanted a different one that would be more equal. He does not like the notion of banks and bankers getting wealthy just because they hold the keys.” Nakamoto exemplifies the true American dreamer, from Oregon to Florida to Maine. If you study the types of people who use Bitcoin, their age, gender, location of residency, ethnicity or cultural background, you find no distinct subculture of Bitcoin followers.
To be sure, big business and cutting-edge technology wizards command a large portion of Bitcoin. MIT gives each future nerd-turned-millionaire freshman 100 dollars worth of bitcoins upon enrollment to peak their interest in this expansive and lucrative profession. But the mothers of young children and small business owners of local delis create the more valuable client. And the numbers of these ordinary Bitcoin users continues to increase. Enough businesses across the nation accept Bitcoins, that traveling from the Pacific to the Atlantic all on Bitcoins is possible. If an average American, let’s call him John Anderson, wants to travel from Oregon to Maine exclusively through Bitcoin expenditures, here’s how he might do it.
Starting in the lush fauna of the Oregon countryside, John can rent a car from cheapairs to get out from under the grey and dismal skies to the sunny beaches of San Diego, where he can stop to have a burger at Downtown Johnny Brown’s. But on his way, he’ll stop by the ARCO Arena and watch the NBA Sacramento Kings play. From there, John can stay at the Mammoth Condo village, a home-style cottage nestled in-between two frosted mountains. If he’s feeling lucky, or maybe craving some excitement, he could stop by The D Las Vegas Casino Hotel, where he can drop a few Bitcoins at the Roulette table. While driving through the arid deserts of Arizona, he’ll pull over on Route 66, emerging from his air-conditioned car into the storm of dust, shuffling to The Ice Box: Authentic Shaved Ice to get a Supreme Ice with three flavors.
Our John Anderson will wind up in the mountains of Colorado where he’ll need to stop at the Greeley gas station to refuel. Inside their convenience store, he might notice a sign that says “Take The Power Back! Let The Banks Eat Cake!” or the store owner gloating about the $35,000 he’ll save without the credit card processing fees. Maybe John will stop at the Lido Asian Cuisine in Oklahoma and the Little Caesars in Kansas before finally arriving in Texas. In Texas, it’ll be time to stop at the Bitcoin ATM and restock. Then, as he ventures on, he might feel a little out of place and want to change his look at the Central Texas Gun Works, where he would buy a cowboy hat and a gun holster.
Maybe John’s new image will embolden him, and perhaps he’ll fire some test shots in the gun range. But, since he’s from Oregon, poor John would probably end up at Rapid Med Urgent Care Center, where he’ll drop a few Bitcoins to repair a shoulder dislocation caused by the kickback of a .557 T-Rex Shotgun. From the onset, there existed a dream. Each of this nation’s people trusted the validity of this dream, living in hope.
Until years later the dream finally unraveled. Up spewed money and greed and excess. Up overflowed shiny trinkets like thousands of still-wrapped presents underneath the decorated tree in the living room. Round shiny coins, gold, nickel, and copper, were saved in a large vault and held collectively in deep jean pockets and exchanged for the trivial gadgets of our modern society. Voila, America! The American dream used to be a white picket fence surrounding a two-story house for a family of five, with a puppy running through water shooting from sprinklers in the backyard, and a fresh Apple pie cooling on the window sill, and Dad in his usual chair, shotgun leaning against the side. It used to be meat and potatoes, American flags and poodle skirts. But Americans have grown weary of moderation and comfort; if you think money is the root of all evil, I’m here to tell you that you’re wrong. Human greed is the root of all evil, money’s just the accomplice. If you think Americans will use an anonymous currency exchange site for ordinary purchases instead of making millions, then you’ve never taken an American History class.
Bitcoin miners, essentially anyone with expensive computer software, control the production of Bitcoins by acting as faux-middlemen, allowing Bitcoin to use their server to solve complicated algorithms to verify transactions, preventing double spending. At the current rate, the miners solve a block every ten minutes, which validates a bundle of impending transactions by adding them to a public ledger listing all the purchases ever made in Bitcoins. In return, miners earn Bitcoins after they verify a block. “If you mine at the moment, you have to be very lucky to get anything,” said Mehmet Vatansever, who bought $16,000 worth of mining computers in February to chase after new Bitcoins. “It’s a very difficult business. The viability of Bitcoin relies on proper recording of unique transaction ID’s that connect to each exchange; a viability that has proven to be prone to a transaction malleability bug in Bitcoin Software.
” Say Tookewl21 wants to buy a tractor. Instead of trekking to the local farm supplies store or haggling prices with the corn-farmer two towns over, he logs into his Bitcoin account and finds Murica1776 wants to sell his John Deere 300x for one Bitcoin (the equivalent of $411 as of May 13, 2014). He contacts Murica1776, who agrees to sell it to him. Tookewl21 transfers his Bitcoin to Murica1776 which assigns an electronic signature, or code, to the exchange. While in transit, a third party changes the ID without notifying Tookewl21.
A miner receives the altered ID, and logs it into the open source ledger, therefore validating the transaction. But even though an ID has been documented and the Bitcoins have been transferred, the “name” has been changed, leading Tookewl21 to believe that the transaction didn’t go through. Maybe he’ll send the transaction again. And resend it again. Multiple times.
Maybe his computer doesn’t recognize the ID change and resends the transaction 100 times a minute. Imagine sitting in front of your computer screen, watching your bitcoin balance reduce until it finally hits zero. Frozen in front of the computer screen, the artificial light illuminates your face and reduces your pupils to beady dots. You take off your glasses. Slam your laptop closed. Close your eyes.
Rest your elbows on either side of your computer and bury your face in the palms of your sweaty hands. Maybe you sit in a secluded apartment with shades over the windows and triple locks on the door, where the closets remain empty, hangers left off to the side and a still-packed suitcase pushed to the back, and the refrigerator holds a half-gallon of milk and two-day old Chinese food. Your name is Defcon. You run Silkroad 2.0, the Ebay of the Deep Web that sells illegal drugs, weapons, prostitutes, art, and more. You’ve just lost 2.7 million dollars worth of Bitcoins. All the 2.7 million dollars your followers invested in your business. The druggies, the convicts, the murderers, the underworld, all who’ve just lost millions of dollars, and who lose their tempers easily.
Your moist t-shirts sticks to your back. You open your computer back up and begin to type “I am sweating as I write this… I must utter words all too familiar to this scarred community: We have been hacked.” The transaction malleability bug, an obvious error on Bitcoin’s part, will not be enough of an explanation to keep you safe from your clients. “This was not a worst-case scenario: nobody will be getting arrested from this. The details we have on the hacker are below. Stop at nothing to bring this person to your own definition of justice.
” That’s it. You’ll remain in command while you deflect the anger. All you need to do is type in the usernames. Our John Anderson carries on. The robust Americanism of Texas may wear off and John might want to continue his all-Bitcoin trek across the United States. He could follow the coast into jewel-encrusted parades of Carnival Season in New Orleans.
Perhaps John will wander the streets, past the old Georgian mansions and Live Oaks draped in Spanish moss. He’ll stop at David’s Antiques where he’ll discover an exceptional copy of the American Gothic. And the price, 10 Bitcoins, will be so good he’ll have to buy it. But when he arrives in Florida, he’ll read the front page of the newspaper and find that the original American Gothic has been stolen. And they have linked the painting to a Bitcoin username.
His username. See, John stumbled into the underworld of Bitcoins where the online currency sustains the other American dream; get rich by any means. John will exchange the American Gothic for a red Spider Ferrari at Exotic Car Rentals in Miami. A barbed-wire tattoo at Anonymous Tattoo in Georgia and a “mom” tattoo at No Egrets Tattoos Studio in Tennessee completes his transition. Speeding through the East Coast with the top down, he’ll spend more time on the Silk Road 2.
0 than on Route One. John will change his name to smokinglife and help rob Silk Road 2.0 which begins the flow of death threats from Defcon himself. John might then drive to The Church of St. John the Evangelist in New York where he’ll make a sizable donation in Bitcoins, living out the rest of his life as a hermit in Maine. The dream of equal opportunity, so lusty and intriguing, lends itself in perfect partnership to Bitcoin.
The notion that I could be Defcon, a 17-year old private-school co-ed, leading a double life as the ruthless leader of the world’s largest online drug market, demanding the same respect and loyalty as a 50 year-old male convict, tattooed and toothless, offers a real-life possibility. Because behind a computer screen and a username, prejudice and prejudgment based on appearance become impossible, leaving everyone to be assessed according to their intellectual capacity and presence.