Patrick Murck

Bitcoin puts privacy back in the hands of consumers. This is desperately needed in light of the data breaches and credit card thefts happening today. Overstated claims of illicit activity threaten to impede consumer-friendly advances in e-commerce through Bitcoin. Thoughtful government leaders have determined to harness the benefits of Bitcoin while mitigating the risks. This is the sensible position.

Consumer privacy is one of Bitcoin's many advantages over today's credit cards and checking accounts. Transactions are permanently recorded in an online open ledger and conducted in full view of the public, but consumers are empowered to decide how much of their personal information is passed along with each transaction. Using Bitcoin, consumers don't have to trust merchants with their sensitive data and merchants get to pay lower fees. This is a game-changing advance.

Overwrought depictions of Bitcoin as an "anonymous payment system for criminals" are inaccurate and counterproductive. Money laundering and tax avoidance permeate our global financial system. "Exploitation by malicious actors is a problem faced by all types of financial services and is not unique to virtual currency systems," a Justice Department official testified before a Senate panel.

Digital currency is not a unique or unsolvable problem for law enforcement. Indeed, open networks like Bitcoin are hostile environments for crime. A Treasury official said in Senate testimony last fall, "Cash is probably still the best medium for laundering money."

Having studied the issues, Sen. Tom Carper, D-Del., chairman of the Senate Homeland Security and Governmental Affairs Committee, concluded, "We know there's some bad stuff that can happen through the use of virtual currencies like Bitcoin, but we also know that some good things could happen. It can enhance transactions between sellers and buyers. It can actually help international trade, and lower the cost of transactions."

Getting the good from Bitcoin while mitigating the bad. It's the sensible approach being taken by the U.S. government and all thoughtful actors looking to develop a safe and sane regulatory environment for this exciting new technology.

Patrick Murck is the Bitcoin Foundation's general counsel.