bentsoveriegn

Charlie Shrem, the CEO of BitInstant and a vocal leader of the Bitcoin Foundation until his recent arrest for alleged money laundering, spoke to the Texas Bitcoin conference by Skype yesterday. Reading a transcript of his speech, we were struck by his paranoid tone, which seems just one hyperbole short of an Alex Jones rant. Is Mr. Shrem really planning to defend himself with this conspiracy theory about international bankers, or is it just red meat for a crowd of techno-libertarian geeks who think 9/11 was an inside job, too?

During the last few weeks, we’ve seen several examples of legal outbursts. We’ve seen the police abusing the measures available to them. We’ve seen the actions of the financial services industry. We’ve seen high-profile politicians mobilizing in order to protect the financial and banking industry.

All of this is scandalous without parallel. That is why I stand here today.

The financial and banking industry wants to convince us, that it’s only about illegal payments, that it’s about protecting the integrity of the status quo. It’s a pretext. We need to look at the big picture, Bitcoin is about something entirely different.

Yes, let us not discuss those allegations that Mr. Shrem knowingly enabled a criminal enterprise at the Silk Road website, which prosecutors have called the most “sophisticated and extensive criminal marketplace on the internet.” His arrest is just an “abuse” by law enforcement agencies that are in the pocket of the Wall Street/Federal Reserve conspiracy against bitcoins. Hard drug dealers, computer hackers, forgers, and even hit men were all using the site, but never mind all that criminal behavior: Mr. Shrem would instead have us regard him as a new Galileo, a man of scientific integrity being oppressed by an international financial priesthood that refuses to acknowledge the new order of the universe, lest they lose their grip on absolute power.

Inherently, Bitcoin transacting constitutes simultaneous up- and downloading from every connected person, and completely lacks central point of failure or control; it’s a situation where all payments and information organically flows between millions of different people at the same time. Fundamentally different. This is something completely new in the history of human communication and Bitcoin is one of the largest socio-economic experiments human kind has ever seen.

Which is hilarious, because the bitcoin world has been rocked by failures at central points of control and across networks, creating exactly the kind of liquidity issues from which Mr. Shrem seems to still think bitcoins ought to be immune. This is pure denialism, and Shrem vastly overstates his case. Since only about one thousand people around the world own more than half the bitcoins, “millions” of people have yet to take part in Mr. Shrem’s socio-economic experiment — though malware vendors, cyberthieves, and organized crime certainly have, since bitcoins lend themselves so well to those illegal activities. The same is true for billionaires who want to buy politicians with bitcoins.

Mr. Shrem complained that “they” are trying to suppress “our culture,” but we are fairly sure that he did not have his actual customers in mind as his “culture.” And who are “they” that fear bitcoins so much? Maybe Shrem was thinking of Warren Buffett, who recently called the virtual currency a bad investment. Mr. Shrem seems a little bent out of shape, and maybe that is because deep down underneath the libertarian pabulum he knows that nobody likes to cash crooked coins.