Bitcoin is also called an anarchist (anarchist) currency. This is because it does not belong to the state or government. No government can stop the issuance of Bitcoin unless the internet is shut down. It is a private currency out of the government’s monopoly and control. Austrian economist Friedrich Hayek’s’denationalization of money’ is in line with.
The people who actually made Bitcoin were Cypherpunk. It was a combination of cypher and punk, which means encryption, and was a liberal movement that resisted government censorship and control with computers and cryptography. It was not surprising that they made Bitcoin, a currency using cryptography.
“Computer technology will soon open the way for individuals and groups to communicate and interact with each other completely anonymously,” said Timothy May, the late programmer who is called the legend of the cyperpunk, in the’Crypto Anarchist Declaration’ in 1988. It will prevent any interference or attempt to alter or manipulate behavioral data.”
This cyperpunk spirit has established itself as Bitcoin’s ideology that it is not subject to external control or interference through decentralization. However, as the price of bitcoin rose, Wall Street financial institutions began to see and approach new investment assets. The ironic thing is happening that bitcoin, a currency for liberals, is converted into a financial asset of a traditional financial sector.
■ Born in the financial crisis
The birth of Bitcoin is difficult to explain after the 2008 global financial crisis. The US real estate bubble, which began with greed, led to the bankruptcy of New Century Financial (NEWC), the second largest subprime mortgage lender in the US in April 2007. A year and a half later, in September 2008, Lehman Brothers, the fourth largest investment bank in the United States with a history of 158 years, went bankrupt, and the financial crisis began in earnest.
The 2008 financial crisis was different from the previous one in that the company or the borrower who received the loan was not going bankrupt because they could not repay the money, but the bankruptcy of the financial institutions that gave the loan was blocked. In the meantime, as the banks that wrote the’indefeat myth’ went bankrupt one after another, it was said that they should no longer watch the existing capitalism and financial institutions.
On October 31, 2008, a nine-page paper called’Bitcoin: P2P Electronic Money System’ was released to the world. The gist of the thesis was that it was possible to issue and use electronic money without financial institutions or centralized control. On January 3, 2009, the anonymous author Satoshi Nakamoto, who wrote this paper, published the results of realizing the claims of the paper. It was the moment when a cryptocurrency’Bitcoin’ that anyone can issue and use without any control was born into the world.
And Satoshi Nakamoto left a phrase on the first Genesis block of the Bitcoin blockchain. ‘Second bailout for banks is imminent by the Finance Minister’. British daily newspaper <더 타임스>The title of the January 3, 2009 article is that the UK government is supporting the banks who are struggling with the global financial crisis. Satoshi Nakamoto made it clear that there are governments and financial institutions that caused the financial crisis behind Bitcoin’s birth.
■ Four characteristics of Bitcoin
The spirit of cyperpunk is embedded in the technical characteristics of Bitcoin. The first is decentralization. Bitcoin has no centrally controlled devices such as governments or financial institutions. In other words, anyone with a computer and the Internet can issue bitcoins. This is expressed as’mining’.
The second characteristic is the inability to forgery or tamper with. Once recorded, Bitcoin cannot be erased or changed. Files or images saved on the computer can be modified. However, due to the nature of a blockchain that is stored by several people, it is impossible to modify the contents once recorded. What is written in Bitcoin is always original.
This leads to the third characteristic, the inability to pay double. Double payment refers to the use of the same currency in multiple places. Often, digital files such as photographs are easy to make copies and distribute. However, if money is copied and moved around, the value is not guaranteed. Bitcoin, which only existed in the original, could not be double-paid, so it could be recognized as a means of storing value.
The last is transparency. The names of the senders and receivers are not disclosed, but the transaction history of the exchange of bitcoins is disclosed online so that anyone can search and find them. It is thanks to this characteristic that crimes such as welcome to video, yen (n) room, doctoral room, etc., who received bitcoin and sold sexual exploitation videos or drugs, were tracked.
■ Wall Street to buy bitcoin
At first, Wall Street viewed Bitcoin as’useless trash’. “Bitcoin is a scam” in 2017, said Jamie Dyman, chief executive of US investment bank JP Morgan. Until recently, Goldman Sachs showed negative perception at the investment briefing, saying, “Bitcoin is not an asset.”
However, as the price of bitcoin rose and they received attention as a means of storing value, their perceptions changed a lot. S&P, a global credit rating agency, predicted in January this year that “traditional investors’ investment in bitcoin will increase.” In fact, famous Wall Street hedge fund managers Paul Tudor Jones, Stanley Drunken Miller, and other companies such as Mass Mutual and MicroStrategy are publicly buying Bitcoin. Wall Street, which was initially negative, is investing in bitcoin with dreadful momentum.
However, the more bitcoin is incorporated into the institutional sphere, the farther away from the cyperpunk ideal. In particular, the government and institutional investors are demanding anti-money laundering standards of traditional financial sectors in Bitcoin. The International Anti-Money Laundering Organization (FATF), de facto led by the U.S. Treasury Department, issued a guideline for Travel Rules (Money Transfer Rules) that requires verification of the identities of senders and recipients when transferring cryptocurrencies in 2019. The purpose of Bitcoin, which dreamed of a free means of remittance by individuals, free from government censorship and control, is fading.
Timothy May said, “The reason we are so enthusiastic about bitcoin is because of the expectation that individuals can freely trade by bypassing and neutralizing the power to manage and control transactions,” said Timothy May. “If you don’t want to make Bitcoin a subclass of PayPal or Visa In other words, we must reject any attempts to fit into the regulatory framework.” However, in light of the recent trends, investors seem to prefer Wall Street investments with censorship and control but sweet price rises over Cyperpunk’s anarchist currency.
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