icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm
13 May, 2014 00:53

Tensions in bitcoin community over political lobbying

A number of countries have warned against bitcoin, creating an ugly perception of the cryptocurrency. Yet the decentralized digital payment has enough of a footing to hire lobbyists to combat that idea and potentially help pave the way to its legitimacy.
Tensions in bitcoin community over political lobbying

Bitcoin and other virtual currencies are perhaps as unpopular with certain lawmakers and regulating bodies as they are popular with civil libertarians. The Indiana Secretary of State on Monday warned merchants against using any alternative forms of currency, citing a volatile value that changes by the day, among other factors.

Such advisories have become increasingly frequent, with Russia and China outright prohibiting the use of bitcoin and the US Internal Revenue service announcing bitcoin will be regulated as a product, greatly hurting its prospect at being used as a widespread currency.

Now, though, the Bitcoin Foundation, a lobby group dedicated to boosting the public image and practical use of the currency, has hired a team of lobbyists in an attempt to reverse the tide. Jim Harper, a former official at the libertarian Cat Institute, was hired in March to “identify political impediments to bitcoin adoption, and build confidence in bitcoin among governments around the world,” according to the Wall Street Journal.

The move came just weeks after the shutdown of Mt. Gox, a Japanese-based exchange that, at its peak, handled 70-percent of all bitcoin transactions in the world. The 850,000 bitcoins in Mt. Gox at the time, valued at more than $450 million, were deemed missing and likely stolen, with the incident slashing the value of bitcoin.

I’m excited by the opportunity to help the foundation achieve bitcoin’s promise for improving global financial inclusion, strengthening financial privacy for law-abiding consumers, increasing liberty and dignity for people the world over, and providing a stable money supply in countries where monetary instability may threaten prosperity and even peace,” Harper said at the time.

However, despite his job of trying to help bitcoin, Harper’s hire has not been popular among all potential bitcoin users, as evidenced by a Reddit discussion highlighted by Vice News. Part of bitcoin’s appeal is the very notion it is not part of the mainstream and is thus able to avoid most detection from law enforcement.

When you’re most desperate for air is when you struggle hardest to breathe. And when you’re desperate to sustain your livelihood, because your hyperinflating state controlled currency is preventing you from living freely, that’s when you start looking for alternatives,” wrote user PacificAvenue.

The masses will adopt bitcoin but only by necessity. Lobbying doesn’t change that.”

Lobbying proponents responded by discussing how much value bitcoin lost each time it suffered a setback, especially in the case of China’s prohibition.

A lot of different government officials and federal agencies are trying to wrap their mind around bitcoin,” Harper told CNN when he was hired. “The most important thing we’re doing is explaining how bitcoin works.”

Even if an effort was not underway, other companies are trying to find out more about cryptocurrency. MasterCard revealed in an April quarterly report that lobbyists working for its firm Peck Madigan Jones were focused on “bitcoin and mobile payments.”

MasterCard refused to go into detail on the exact goal of the effort, saying only in a statement to the Hill that it was “gathering information in connection with recent congressional hearings to better understand the policy issues around virtual and anonymous currencies.”