Containment of Liberalism against State Censorship of Kyperpunk in 2009,
growth in bitcoin mining as a new investment asset on Wall Street in 2020.
Bitcoin is also called anarchist (anarchist) currency. This is because it does not belong to the state or government. No government can stop the issuance of bitcoins unless the internet is turned off. It is a private currency, not controlled by the government. The "denationalization of money" by Austrian economist Friedrich Hayek is also consistent.
The people who actually created Bitcoin were Cypherpunk. It was a combination of cipher and punk, which means encryption, and a liberal movement that resisted government censorship and control by computers and cryptography. Unsurprisingly, they made bitcoin, a currency using cryptography.
“Computer technology will soon pave the way for individuals and groups to communicate and interact with each other completely anonymously,” said Timothy May, the late programmer known as the Cyperpunk legend, in the 1988 Cryptanarchist Declaration. will prevent any interference or attempt to alter or manipulate the behavior data. "
This cyberpunk spirit has established itself as the ideology of Bitcoin, according to which it is not subject to external control or interference through decentralization. However, as the price of bitcoin increased, Wall Street financial institutions began to notice and approach new investment assets. Ironically, bitcoin, the currency for liberals, is turning into a financial asset in the traditional financial sector.
Born in a financial crisis
The birth of Bitcoin is difficult to explain after the 2008 global financial crisis. A greedy bubble in the US real estate market led to the bankruptcy of New Century Financial (NEWC), the second largest US mortgage lender, in April 2007. A year and a half later, in September 2008, Lehman Brothers, the fourth largest investment bank in the US with a 158-year history, went bankrupt and the financial crisis intensified.
The 2008 financial crisis differed from the previous one in that the company or borrower who received the loan did not go bankrupt because they could not repay the money, but the bankruptcy of the financial institutions that provided the loan was blocked. Meanwhile, since the banks that wrote the "myth of defeat" went bankrupt one by one, it is no longer possible to calmly watch the existing capitalism and financial institutions.
On October 31, 2008, a nine-page document titled "Bitcoin: A P2P Electronic Money System" was released worldwide. The essence of the thesis was that it is possible to issue and use electronic money without financial institutions and centralized control. On January 3, 2009, the anonymous author Satoshi Nakamoto published the result of the implementation of the argumentation of the thesis. This was the moment when the Bitcoin cryptocurrency was born in the world, which anyone can issue and use without any control.
And Satoshi Nakamoto left the phrase about the first Genesis block of the Bitcoin blockchain. "Second aid to banks is inevitable from the finance minister." This is the headline of a January 3, 2009 article in the British daily The Times supported by the UK government to bail out banks hit by the global financial crisis. Satoshi Nakamoto made it clear that there are governments and financial institutions that triggered the financial crisis behind the birth of Bitcoin.
Four characteristics of Bitcoin
The Cyperpunk spirit is embodied in the technical specs of Bitcoin. The first is decentralization. Bitcoin does not have centrally managed devices like governments or financial institutions. In other words, anyone with a computer and Internet can issue bitcoins. This is expressed as "mining".
The second characteristic is the impossibility of forgery or falsification. Once written, Bitcoin cannot be erased or changed. You can modify files or images saved on your computer. However, due to the nature of blockchain that is stored by multiple people, it is not possible to change the content after it is written. What is written in bitcoins is always original.
This leads to the third characteristic - the inability to pay twice. Double payment means using the same currency in multiple locations. Often digital files, such as photographs, are easy to copy and distribute. However, if money is copied and moved, value is not guaranteed. Bitcoin, which only existed in the original, could be recognized as a store of value since double payment was not possible.
The last is transparency. Although the names of the senders and recipients have not been released, the transaction history of bitcoin exchanges is being disclosed on the Internet for anyone to find and find. It was through this characteristic that they were able to track crimes such as admission in video, room for yen (n), doctor's office, etc, which received bitcoins and sold sexually exploited videos or drugs.
Wall Street for buying bitcoins
At first, Wall Street viewed Bitcoin as "worthless junk." "Bitcoin is a scam" in 2017, said Jamie Deeman, CEO of JP Morgan, a US investment bank. Until recently, Goldman Sachs showed negative perceptions at an investment briefing, saying "Bitcoin is not an asset."
However, as the price of bitcoins rose and they gained attention as a store of value, their perception changed a lot. S&P, a global rating agency, predicted in January this year that "traditional investor investment in bitcoin will increase." In fact, renowned Wall Street hedge fund managers Paul Tudor Jones, Stanley Drunk Miller, and others like Mass Mutual and MicroStrategy are publicly buying bitcoins. Wall Street, which was initially negative, is investing in bitcoin at an alarming rate.
However, the more bitcoins are embedded in an institution, the further away from the cyberpunk ideal. Specifically, government and institutional investors are demanding anti-money laundering standards from traditional financial sectors in bitcoin. The International Organization to Combat Money Laundering (FATF), de facto led by the US Treasury Department, has issued a travel regulations (money transfer rules) directive that requires sender and recipient identification when transferring cryptocurrencies in 2019. The purpose of bitcoins, which dreamed of free funds for individuals' money transfers, free from government censorship and control, is disappearing.
Timothy May said, "The reason we are so enthusiastic about bitcoin is in the expectation that people will be able to trade freely, bypassing and neutralizing the ability to manage and control transactions." “We must reject any attempt to fit into the regulatory framework. “However, in light of recent trends, investors seem to prefer Wall Street investments with censorship and control, but with a welcome price increase over the anarchist currency Cyperpunk.
