Bitcoins. Internet cash, no taxes, no banks.

Bitcoins are really interesting concept and it will take few minutes to understand it. Wikipedia explains:

Bitcoin enables rapid payments (and micropayments) at very low cost, and avoids the need for central authorities and issuers.

To be more clear, TurboTax Blog made nice iconography (click to enlarge)

Self issued digital money is new concept even digital currency already exists (Linden dollars, Facebook credits, Tencent QQ ). But just imagine the schema without central organization.

It is clear that world governments will start dealing with it as soon as it will gain momentum. This already happened with Chinese government and QQ coins. As mentioned above problem will be the same as with other P2P networks that could not be shut down as easy as Napster. Of course state sponsored hacking can be implode to bring down confidence in it. Actually, there was incident, at the moment considered to be “friendly fire” from other hackers. Nevertheless, Bitcoin stands.

Two points can be made

  1. Virtual economy is growing. To be true, it’s huge. And new schemas will be more independent and secure (even it is long road ahead).
  2. Independence will raise a lot of legal/moral questions – tax payment, money laundry, financial governance. And the answer depends on over all personal approach – libertarian or conservative.

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