Data editor at the Guardian, James Ball (@jamesrbuk), describes in a post why Bitcoin’s prospects significantly differ from centralized digital currencies like Liberty Reserve. Excerpts:
"The real transformative power of Bitcoin, or something like it, lies not in a speculative bubble, but in its potential to put currency outside of the control of governments, or law enforcement agencies."
"Bitcoin makes Liberty Reserve look quaint – as unlike the alleged money launderer, Bitcoin is decentralised. There’s no single company or entity controlling the currency, and so it’s nearly impossible to shut down."
"Where real money is exchanged into Bitcoins is still a potential weak spot for authorities – and some Bitcoin exchanges are looking to sign up with regulators."
"If Bitcoin, or a currency working in a similar way to it, got a stable value and a large user base, it could take cash flows forever out of the hands of government. Whether that’s a great thing or a terrible thing depends on what you’re trying to do, what you think of government and what country you’re talking about."
"The prosecutors of the southern district of New York are very publicly celebrating their shutting down of the Liberty Reserve operation. They should enjoy it – it may be one of their last such victories."
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