Teck Talk / By Martha Knight

Money is baffling.

It is also elusive, to some of us anyway. I wish my experience with the stuff were not so limited. I watch it from a distance, and I don’t see well.

Currency is solid, regulated, known and understood, and is pegged to something tangible of which a finite amount exists, right?

A good friend of mine, gone now, in his day a loyal Democrat and longtime committeeman, used to insist, seriously, that there was no excuse for this country running out of money or even having to borrow. “They should just print as much as they need,” he declared. There were no two ways about it. Oh, if only the Congress could arrive at such clarity!

If my late friend had lived to see Bitcoin, he would have approved, I think.

You know, Bitcoin, the medium of exchange used on the Silk Road, to name just one virtual place of commerce.

No, not the Silk Road that rings faint memories, like distant temple bells, from Ancient History. Silk Road of our time was a marketplace where the shopper could buy child porn, guns, drugs, murder and other goods and services not openly bought and sold as a rule.

A huge problem with buying and selling illicit goods and services is how to pay for them. Checks are traceable. And so is legal tender. If only all that money didn’t have to be laundered!

At weusecoins.com Bitcoin is explained as a new kind of money. It is open source, not controlled by a single government or organization, free of middle persons and companies, efficient and low in transaction costs. It has been likened to Skype in that it is global in reach and lets users make phone and video calls without using phone companies and paying tariffs to countries. Another comparison is sending email without using postal systems or buying official stamps.

Sounds great, huh? So how do we get some Bitcoin money? We have to mine for it.

Roughly, that means aggregating valid Bitcoin transactions into blocks, which become part of the block chain. Miners have to compute cryptographic hashes representing the details of all included transactions in a block, and validate those transactions. They need some pretty good “hardware” to do this fast enough.

Collecting transactions, validating them, rejecting conflicting ones (pretended reuse of Butcoins already committed in real transactions), bundling them into blocks, recomputing cryptographic hashes until it finds the ones “good enough to count,” submitting them to the Bitcoin network—all this effort is required to keep things solid, and this is likened to mining although it is done on human directed, specialized hardware using open source programs, and is work that is rewarded in Bitcoins.

Who might be those among us who would find the Bitcoin system appealing? People who like wheeling and dealing, people who like money and what it can do, geeky types who like using computers to the hilt, people who have commercial smarts, people who like being early adopters, people who like saving fees and charges if they can, people who like to indulge in financial speculation…

And, inevitably, Bitcoin would attract users who like the unregulated, anonymous, sub rosa aspects of the new system. For a time Bitcoin seemed destined to be the funding mechanism of choice for illegal activities. But those halcyon days of numismatic liberty for the nefarious may be drawing to an end.

The Bitcoin marketplace called Silk Road has been shut down. Some principals have been arrested by the Brits and in the U.S. Financial regulators are beginning to bring Bitcoin into line with currency laws.

Survival of the Bitcoin system lies in its being a regulated financial instrument, not being a haven for fraudsters and monetary goons. Money as we have known it is not likely to go out of style, after all. There won’t be any easy way for people in general to get out of certain obligations, such as taxes and paying fines and judgments, and hide their liquid assets, much as some may have hoped Bitcoin would enable those slip-slide accomplishments.

At this point most people don’t know much of anything about Bitcoin. If it continues to be used and adoption spreads, that will not be because of wider use by the under-the-radar fliers., but rather because of adoption by more conventional buyers and sellers, investors and speculators, entrepreneurs and inventors.

There is a niche for virtual currency. Bitcoin wasn’t quite the first, and won’t be the only, such system. Short transaction cycles have a certain appeal.

As for currency that is privately issued, and independent of banks and almost (but not quite) unrelated to official, government backed currency—remember trading stamps?

They were like gold. Or maybe, panning for gold, patiently collecting tiny particles until they added up to something. The fine print did say that they were worth some regular money, stated in fractions of pennies. We could accumulate and spend our stamps at special stores.

Remember Top Value Stamps, Plaid Stamps and S&H Green Stamps? Those were the days! So many books for a blender, so many for a pair of earrings, a Hot Cars set. There were even fractions of books, with the full book being torn apart at the stamp store, the reminder assigned a value. Redeemed books and pages were put through a machine that punched holes in all the stamps, lest they be re-circulated.

Have you used Bitcoins? Do you plan to? Do you happen to have some old trading stamps in a drawer somewhere? Tell Drymar@gmail.com. Anonymously, if you prefer…