In the essay he introduces the website and describes his experience as a user purchasing illegal drugs. It is well worth the read. I’ve spent hours on his website perusing his other works.
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When I first learned about the Bitcoin currency a few years ago, it didn’t excite me. A purely digital currency tied to no material good seemed an interesting project, but I didn’t see that it could have the practical value of, say, a digital gold currency. When the media blitz occurred last year I took another look and reached the same conclusion. A few months later I realized I was looking at the currency all wrong: bitcoins are not a value-store, they’re a means of exchange.
It doesn’t matter that Bitcoins are the digital equivalent of a fiat currency, with no inherent value. It doesn’t matter if their value fluctuates in relation to other currencies. There’s no reason to store wealth in Bitcoins (unless you’re a gambler). When you need to send money, purchase some Bitcoins and send them. When you need to receive money, accept Bitcoins and exchange them immediately for another currency. The value of the bitcoins only need to remain stable for the amount of time it takes to complete a transaction.
I’m no Bitcoin evangelist. I have my reservations about the currency. But one common critique that consistently angers me is that bitcoins are not secure because there have been instances of theft. This is equivalent to claiming that Federal Reserve Notes are insecure because people get mugged. Secure your shit.