Lawfare bought a bitcoin a few years ago, and just recently sold it. Paul Rosenzweig comments on the experience, and some tentative conclusions:
To this one must add another factor (one that does sound somewhat in the tone of national security). Bitcoin has also become increasingly useful in Dark Web transactions. The recent flood of ransomware attacks (of which WannaCry is only the most recent and the most infamous) would have been impossible without Bitcoin as a means of anonymous payment. This too contributes to the demand for Bitcoin and, likely, the run-up in value.
It also, however, gives one pause and strikes a note of caution about the future of Bitcoin. One has the anecdotal impression that malignant uses of Bitcoin are outstripping in frequency its use for benevolent purposes. If that anecdotal suspicion is borne out factually, then the time of government’s hands-off approach to Bitcoin may soon come to an end.
One can imagine any number of responses. The most benign would be stringent regulation. More severe might be de-legalization. In extreme need, one can even imagine governments investing in the technical capability of destroying bitcoin as a currency by attacking the blockchain. If these suppositions are correct, then bitcoin may well have reached its peak value and our decision to sell will have proven prescient. Or not …. We may be missing the boat here, but for now our experiment is over.
I wonder how it compares to cash in terms of untraceability.
