Market Overview

Why Julian Assange of Wikileaks Loves Bitcoin


Bitcoin is a digital peer-to-peer technology and currency that allows users to transact online without using credit cards or bank accounts.

Think of Gnutella (or if you are not familiar with that, the old Napster (NYSE: BBY) except decentralized). However, with Bitcoin, you are not trading music files or movies. You are simply trading a specific type of file.

The file, in and of itself, has no value. Just as all fiat currencies have no inherent value. Yet, like fiat currencies, economic agents all over the world have agreed to offer goods and services in exchange for Bitcoin files.

Bitcoins have numerous advantages over traditional currencies—they can be traded online without intermediary institutions and they are inherently resistant to inflation. The Bitcoin is also free from central bank control, which might please certain libertarian-leaning individuals.

Major online retailers like Amazon (NASDAQ: AMZN) have yet to begin accepting Bitcoins, but traders can use them on other sites.

Most infamously, Silk Road, where users can swap Bitcoins for drugs.

Alternatively, they can donate to the anti-government privacy group Wikileaks.

Wikileaks currently accepts Bitcoin donations.

The Bitcoin is ideal for Wikileaks. While a record of every Bitcoin transaction is stored on every user's computer to prevent digital counterfeiting, Bitcoin transactions offer a degree of anonymity. People who support Wikileaks but fear being connected to the organization can offer their support through Bitcoins.

Additionally, Wikileaks has had its funds frozen by major banking institutions in the past. With Bitcoins, the freezing of funds is simply not possible.

Bitcoins are potentially the most interesting economic development in the internet age. It will be interesting to see how the market continues to utilize the Bitcoin going forward.

Posted-In: Bitcoin Gnutella Napster Silk RoadPolitics Forex Global Economics Best of Benzinga


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