Bitcoin and Morality

Posted on by Daniel

Bitcoin — a currency by most measures — is consistently framed as ‘amoral.’ Let’s think about why currencies are not compatible with morality.

An unethical or amoral use for a unit of exchange says nothing about the unit, and everything about the user. Those who don’t understand Bitcoin seem to think its uses make it good or bad. Cash, silver, gold, diamonds & bitcoins: These are units of value that can be used to purchase things no matter how the larger society perceives them.

The fact that you can buy drugs, guns, and assasinations, with Bitcoins is indisputable. Bitcoin was not built for the narrow purpose to purchase ‘illicit’ things. Teddy bears, maple syrup and beef jerky are all for sale. It was built to be a secure network of exchange, secured by the computing power of its participants. Sure, Bitcoin’s creator endowed its very DNA with an offhanded critique of our current banking system, but Bitcoin is at its core lacking an ethical or moral position.

I can’t blame Gawker headlines for this persistent problem when it comes to the common man’s perception of Bitcoin. The currency is scary once you get know it. Let me introduce you to a world using Bitcoin:

Transactions can be anonymous (1). Sending money from neighbor to neighbor or Alaska to Istanbul is instantaneous and free (2). Money can be stored with a memorized passphrase, or stored on paper in a vault (3). Only complete disconnection from the Internet can stop a transaction from occurring or disrupt the network (4).

This seems pretty liberating to say the least. But of course, with all disruptive technologies, one can forsee problems.

Can you see why I want Bitcoin to be understood correctly, free of moral relativism? It is a unique unit of value built for the Internet age which has been derided since the beginning. Placing a moral judgement upon what is essentially an open source algorithm is like calling a tomato evil. Learn more about Bitcoin here.

“What is true for you is true for you, and what is true for me is true for me.” – Protagoras

Notes:

  1. There are numerous mixing services.
  2. The double spend problem is real, but difficult to perform (read more). After 6 confirmations (usually after a few minutes) a transaction of coins from point to point can be reasonably trusted. See the comments for more discussion on this. A technical explanation.
  3. See Brainwallet. Pick a long, memorable phrase, and use that to generate a private and public key (this is printable).
  4.  The nodes, miners, and clients spread across the world make Bitcoin the largest distributed computing project ever. Ever.

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30 thoughts on “Bitcoin and Morality”

      1. It was giving some error message. Now it seems to want to subscribe to an RSS.. I was hoping for email. It’s ok though, I just subscribed via wordpress. Keep up the good work.

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    2. how do you handle private-public bitcoin keys?
      once generated, do i import them in every client (wallet) i use to connect to the bitcoin network. if so why I cannot see such option anywhere?

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  2. “The double spend problem is real, but difficult to perform. Ten minutes is all that is required, or about 6 confirmations, to trust a transaction of coins from point to point.”

    10 minutes != 6 confirmations.

    Not sure if you noticed that, probably just a typo.

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      1. One confirmation means that the transaction has been embedded in the most recent block in the chain. Blocks are found on average every 10 minutes, so one confirmation = 10 minutes. 6 confirmations would be 60 minutes.

        One confirmation doesn’t guarantee that a conflicting block solution doesn’t exist somewhere on the network or that a 51% attack couldn’t rewrite history, for that your transaction needs to be buried several layers deep, hence the traditional advice that at 6 confirmations transactions should be considered secure.

        There are also ways around this attack such as simply communicating with distant nodes about the receipt of conflicting transactions that would warn you of such an attack.

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  8. The problem for me isnt the currency itself, its like any other. The moral problem i with it is the mining. You talked about the sale of illegal products/actions/etc.. The largest bitcoin accepting site is silkroad which reports about 1.2 million dollars of profit each MONTH, with just over 210000 bitcoins in circulation going for about $17.2 per coin, that comes out to be about $3612000. That means 45% of bitcoins are wrapped up in a site that sells drugs, illegal activities, and kiddie porn. Mining is the process of decoding the blocks that are transactions. As a miner you may not be actively participating in these activities, but you are enabling them. That is my problem with bitcoin.

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    1. I totally understand — but you can have the same critique for any currency. As long as evil people exist in the world, they will use currency X to buy Y. There’s not much that can be done to stop them. It’s the same as having problems with the U.S. dollar because it is the currency of choice for arms dealers. You can’t have a negative opinion about the country behind a currency because of what people exchange for its bills.

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      1. I believe you are miss understanding me. My problem isn’t the people who are using the money, its with the people using their computer power to mine the morally corrupt transactions. They are enabling those people, i’m fine with the currency itself, but you cannot tell me that the miners are innocent, they are aiding criminal activities, and they sign up for it because of greed.

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      2. Such silliness. Such sloppy thinking. “People using their computer power to mine” bitcoin. “are aiding criminal activities”? Balderdash. Quick, you’d better indict the Federal Reserve for mining (printing) greenbacks, or mining the predatory compounding interest from every loan, every component of the national debt that ends up being used for nefarious purposes.

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      3. Yes, and less than .5% of the money that is created by the government is used in illegal activiteis. 45% of bitcoin is wrapped up in Silk Road your arguement is irrelevant and a straw man fallacy. Good sir yes, people are aiding criminals as they do a completely legal and voluntary act, it is up for such people as yourself and I to personally decide if this is morally wrong for one’s self, I’m just supplying ample evidence as a counter point.

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      4. Logical fallacy. A confusion of logical types. You’re citing quantity, ratio and proportion as if these alter the premises being discussed. They don’t. Not only is the mining or printing inert, but the products (bitcoin or fiat cash) are neutral as well. Catalysts at most, but utterly distinct from the cause, substance, or ethics of the actual transaction.

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      5. Of course it does, the end here justifies the mean. You cannot say statistics don’t matter. The premise is the morality of bitcoin, how am i supposed to prove this without hard evidence. So far you have shown nothing that proves your point. The currency is not wrong please stop going back and claiming this, I am not claiming that the currency is one way or another, I am claiming that the system is broken not the part.

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  9. ‘System’? Which system.specifically? Must we cease ‘mining’ asphalt lest paved roads help robbers escape too quickly? The same ‘system’ that mined and processed your frightfully unethical bitcoin usage also brought me my three new pair of paid-for-with-bitcoin Alpaca socks on Monday.

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    1. If 45% of people driving on roads where bank robbers, yes the gov’t would shut down the roads. You really need me to define system for you? I think we what system know what we are talking about, if not you are ignorant. Congrats to your coins being in the 55%. But let’s run with your asphalt story, say 45% of people driving were bank robbers, would the government shut down roads? no, they are needed for people to work, and to save lives in case of medical or disaster emergencies. They would simply regulate roads, roadblocks/checkpoints, more camera’s, etc…. Now if this occurs to bit-coin, bit-coin loses it’s main purpose, being a de-centralized un-regulated currency.

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  10. I feel like you’re missing the point that perhaps money, as a store of value, should have an embedded sense of morality.

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    1. I think if it has embedded morality, it fails to be a usable currency. You should ask “Whose morality” is embedded, since if it is not your own, you’re going to be upset.

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      1. it has to be fungible, but that fungibility includes morality. the opposite of bitcoin is wuffies.

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      2. and more importantly, modern currencies are backed and issued by governments. as much as some people with issues like to demonize government, they are the best representation of the will and consideration for many people. that’s the embedded value and morality and it’s an innovation that replaces gold which in a coarse way has enabled modern progress. maybe someday a networked currency will emerge that has this feature on an individual scale (with composite wuffie elements), in the meantime it’s simply an elite (in terms of access and position) outsider fascination.

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