Digital currency Bitcoin is gaining popularity around the globe as people become more and more dissatisfied with the conventional banking system. Instant, safe and nearly anonymous, is what Bitcoin claims to be. It takes no commission for transactions and can be used internationally wherever you have internet access. Is it the currency of the future? We talk to Bitcoin developer from UK Amir Taaki.

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Sophie Shevardnadze:Clarify things for people who don’t really know what it is. What exactly is bitcoin?

Amir Taaki: Bitcoin is a pure form of money with mathematical basis. There is no third party that you have to trust when you engage in trade using this system. It’s just really a type of digital cash. Forget its properties, [of] which there are many. One of the most significant things is the strong personal privacy of your financial transactions and the lack of financial censorship. It’s a tool which allows people to engage in the trade on the internet and in real life directly between two people without any middleman, without any third party censoring your financial transactions.

SS: As of today, how popular is bitcoin worldwide?

AT: When I got into Bitcoin two years ago it was six cents. It was a very small community on the internet and an experimental project and right now it’s booming. The value of bitcoin is over $120. Big established companies integrate it into their services as a way to properly do trade and this is a very powerful thing because when you start to see mainstream services are using this financial tool of the internet and they are switching over.

Now you have something where people can engage in trade directly without the oversight of regulation or corrupt authorities who leverage the payment system as the way to control people and censor a lot of different projects on the internet. It’s really growing and there is a huge underground economy and an informal market place of different services. I had a friend who set up a Bitcoin stock exchange a year ago and he had to close it down because was facing 10 years in jail for running a security exchange without a license, while just a month ago there is now a service encrypted in web space and trade stocks and securities on the internet using Bitcoin. It removes all of the restrictions on stock markets that shut out at the average person on the street.

Bitcoin is a really awesome tool because it brings a whole host of financial services to the unbanked, to the people who don’t have access to the market. It properly equalizes the market places.

SS:So what you are saying that you friend stalk exchange was closed down because he didn’t have a license. If I am licensed to broker stuff can I open my own stock exchange with bitcoin?

AT: he was trying to run a stock exchange in the open, licensed, with his identity public and he just couldn’t. The way the regulatory system exists is just to enforce cartels and monopolies and force out small competition. It’s not something leads for a proper free market economy. It’s something that leads to protectionism, enforcing the status quo.

There is now a new stock exchange by a different group of people on the internet and they are doing it anonymously using internet tools to protect their identity, to use Bitcoins to protect their financial transactions and not have them censored by third parties. It’s not just a stock exchange, it’s all kinds of different services like money lending, or even just buying, or donating services like WikiLeaks. The case of Megaupload, where you could upload files to the internet and share them with people, which is the distribution of knowledge. And there are a lot of established industries which are threatened by this kind of model on the internet and they are trying to react to it by using the regulatory and legal system to enforce their position in the markets. A tool that was used to shut down Megaupload was a payment system. Megauplaod is back now, as Mega and they are offering encrypted file storage, so nobody can see your files and using Bitcoin, strong privacy digital currency.

SS:it’s the traditional banking system that is against you, right?

AT: Yes, they have started moving against bitcoin now. Last year I was running the UK bitcoin exchange for more than a year-and-a-half before we had to close it down, because the bank were on our case all the time, putting pressure on us. Then the UK regulatory agency changed their tone. My personal bank accounts were shut down; I was blacklisted from having a personal bank account. It doesn’t matter because I use Bitcoin.

SS:Why are you so dangerous, why would the banks put pressure on you and close down your bank accounts?

AT: It undermines the entire financial system. It takes away the control that is being centralized into these financial institutions. The system is going right down. Our environment is being destroyed, our colleges years are being destroyed on the masses, fishing stocks are low, and surveillance is increasing every year. The storage capability per person is in scale of terabytes. I have never seen a terabyte. The police forces are given new power like Stop and Search.

SS:Are you guys doing anything illegal?

AT: it’s nothing illegal but the financial system is eating itself out and the bureaucratic system is getting overbearing and is crashing itself under its own weight and this is increasing every year. The economic productivity of people’s work is being used to fund this architecture of oppression and meanwhile people’s wedges are going down, the amount of hours that people are working are going up. They are doing job that they hate just for a small box apartment of extortion at rent and pretty soon people are going to be stuck in a cycle of oppression. A new leader is going to come into power, he is going to flip the switch and it’s going to be turned key tyranny.

SS:You are saying that bitcoin is much more than just a currency, it’s like a whole new world view.

AT: It is. Imagine you have a financial tool on the internet which is completely distributed and decentralized and no central party owns the infrastructure. There is no central bank that you make you bitcoin payment through. It’s everybody in the network is upholding the system. It’s like some ancient monetary system. When you are making a payment there is nobody telling you “you cannot make a payment to this guy”. It’s without a third party involved and that’s very powerful. Right now all over the world there are people, not only in developing nations where many people don’t have access to financial infrastructure. In western countries there are many people who are not able to engage in the current financial system. There are many types of businesses on the internet and in real life that can’t engage in the financial system.

SS:Currently, the bitcoin circulation values to US$1 billion. It can be compared to an economy to a smaller country. How much of it are investors trying to make money as opposed to those who just support the Bitcoin ideology and are making it their currency of life?

AT: there are loads of investors getting into bitcoin, because anybody who’s smart is looking at this system, evaluating it objectively. Not based on how much attention its getting. If you are just looking at bitcoin you can see that this is the future. You have a tool which is international; you can make a trade with anybody instantly. It’s uncensored; It’s running 24 hours, seven days a week, there is no fee.

SS:Is it only a payment system or you can just store your money?

AT: It’s more than a payment; it’s a new form of money. If you are holding dollars or any of these rubbish government currency, you are holding failing money. You need to get into bitcoin because that is the future. It’s the purest form of money

SS: Where do I store my money? How do I make sure that I dot lose my bitcoins?

AT: Your bitcoins are stored on your computer in a file and nobody can access this file. You have the keys to unlock your bitcoins and send them to other people. If you want, you can trust a third party side that could block change your info where you can set up a wallet and you store your coins with someone else, and in return they make it convenient for you. But you hold your bitcoins on your laptop. When I send bitcoins directly over the internet to someone else without any third party involved, using software that I wrote completely myself using bitcoins I hold my laptop and nobody else can access [it]. It’s a far better security policy.

The bitcoin software is open source so you can download it and you can read it and just like someone can read French or Spanish or English If you are a programmer you can read the source code and see that it does exactly what it does because it’s a system based on mathematical principles. None of the social fallibilities and failings of third parties.

SS:Now since your bank accounts were all closed down are you existing of bitcoins only as if today?

AT: I have my reserving in bitcoins and I travel to a different country and I can trade it for local currency of people. Lots of traders all from Europe, and America, and South America which are all the countries I was travelling to [in] the last year. If you go on local bitcoins.com you can find different traders from all the different cities. Like in London alone [there] is over 60 different traders. You just meet all of them in real life and you give them in cash or you give them bitcoins and then they give you in return bitcoins or cash back depending on what you are trading.

SS:So can you use bitcoins to buy bigger things, like, college education, for example?

AT: You can use bitcoins to pay for energy, housing, food…

SS:No no, college, because it’s a big sum of money, not energy, not housing, college. If I wanted to pay my college education with bitcoins – could I do that?

AT: I haven’t really looked into it, I mean, why do you want to go to college, when there is lots of free websites, where you can educate yourself on any topic you want?

SS:Well, some people still like conventional education; you can’t really compete with that – some like the internet, some like conventional stuff. So if I were this conventional guy who just wants to go to college, and I’m crazy about bitcoins – could I finance myself trough bitcoins, could I pay my college with bitcoins?

AT: To be honest, the real benefit of bitcoin is not thing you can do using the current financial system, it’s the things that you CAN’T do – that’s where it shines. There is a whole underground economy over TOR, where you can go to different websites, and get different goods and services that are not available – on one site you can buy drugs online, and this is really powerful stuff, because the war on drugs is failing, and it’s costing thousands of lives every year, and destroy millions of lives, and empowering violent gangsters and cartels giving them millions. If people can get drugs directly from the producers, the quality is far higher, it’s far safer, and this disempowers all of these gangsters and everyone in between.

SS: That’s another huge thing. When I was preparing for the program, and I plugged in bitcoin in any search engine, the first thing that comes up is that it makes drug circulation, arms sales easier – how do you look at that? For people like me, I like the whole Bitcoin concept, I would actually buy into that, but the whole drug thing? I am one of those who is actually against them, and I am on that with the law, because I had people around me die because of drugs… So if I know that bitcoin system is actually facilitating drug sales, I wouldn’t go into that, I wouldn’t want people to associate bitcoin with drugs and arms sales.

AT: Look at it this way: the central governments are losing power and people are becoming more autonomous, and the only way that the central government knows how to combat itself losing power, is to step up the repression, step up the oppression. And in the future, the system is going to become overbearing, and be sucking a lot of economic productivity and work out of people, just to support that architecture of oppression. And we really need to have alternative systems, where people can live freely and engage in freely, and we need to build systems that don’t need to have arbiters, when there is a problem we don’t go to someone else to resolve it…

SS:Yes, I’ve got the concept, and I like that concept, but I’m talking about facilitating the crime, in terms of bitcoin being something that facilitates it. It is much easier to buy drugs with bitcoins directly than look for a dealer and pay him, so you facilitate the crime.

AT: The laws against drugs – they don’t stop the drug use, they increase drug use. If you look at countries where they have prohibition against drugs, and in countries where they legalize drugs, like Amsterdam or Portugal, the drug use there has actually gone down. And a proper way to fight against the drug use is not to criminalize drug use; it is to take power away from gangsters. And bitcoin is not just for drugs, there’s a whole big thing – the black market is not just about drugs and guns, it’s about the informal underground economy. When you are doing trade with someone, you are engaging in trade directly with that person, for a whole host of different services that aren’t imaginable right now.

You can decentralize public services, like healthcare or hospitals, even out leading the central authority. Another example: when you walk around the city there are lots of Wi-Fi hotspots which people lock, because they don’t want others to suck their bandwidth, you know, buy downloading torrents, and then people have to pay bills for that. Through bitcoin, people can unlock their Wi-Fi, because they can get their money back as people use their Wi-Fi, it pushes people to become providers of the internet, to create mesh networks, which is awesome stuff.

SS:Talking of Wi-Fi, imagine you are far away from the internet, like you are somewhere in the jungles of Nicaragua, is bitcoin any good, is there any use of it in that situation, when there’s no internet around me?

AT: Just last weekend, there was a guy who did a presentation in Canary Wolf, about Iceland and how its government cannot manage its own currency. This guy had a long history of minting private currencies, and he was proposing that the Icelandic government should move to issuing a private currency that is backed by bitcoin. And that’s possible in any kind of region on the Earth, there are even private issues of physical currency, backed by bitcoin right now in the US, It’s called cassasius physical coins, and they have reiterated mechanisms behind them…it’s a physical coin, with bitcoin inside of it – you can unlock the digital bitcoin from the inside. And there are all other different schemes you can make to bring bitcoin to the real life, but the whole is that it produces a market which is international, everybody has access to it, regardless of race, religion, creed, and we really need to start thinking about building these alternative systems, where free people can live, where can decide our own future, where we can build fair systems, because the current society we are living in is not sustainable, it’s just not a natural way for people to live and its rapidly declining.

SS:You say you are against third party being involved, between two people doing business, trading. But what if I start my own bitcoin bank, and take deposits, give loans, who’s going to come in your way and how that fits your anarchist mentality?

AT: You can do that if you want, as long as you are 18 years of age or older, you can make a bank and start fractional reserve banking…

SS: But doesn’t that contradict the whole concept of what you stand for?

AT: No, the whole point is that everybody is allowed to do what they want. If I am accepting bitcoins, I’m going to want the physical bitcoins, I’d want to see them on a bitcoin blockchain, I don’t want some bitcoin bank credits, unless I really trust that person. It makes that system not really feasible, because right now the banks control the financial network, and if you put money into a bank, it can lend it to other people, creating money that really doesn’t exist through fractional reserve banking. But with bitcoin you can actually see the record on this blockchain that can’t be faked, no false entries could be added to it, because people ask for real bitcoins, not some bitcoin bank credits.

SS: As of today, there’s over $1 billion worth of bitcoins out there – but for bigger corporations its nothing. Aren’t you afraid there’s a bigger fish that’s going to come and swallow you?

AT: Its’ only been two years, and Bitcoin is booming – [the US] dollar dropped over 19 percent against the bitcoin last month, and it’s a system that can’t be censored, it’s a peer-to-peer decentralized network and governments always have trouble trying to censor peer-to-peer networks, like the whole bittorrent thing which undermines the copyright industry – and bitcoin is in lockstep with the whole emerging technologies, like 3D printing or open-source ecology, it is really empowering people and giving them tools to take back what is theirs and build a system together..

SS:Do you think that someone can actually buy you out, buy the whole bitcoin concept or system? Is that possible?

AT: No, because it’s open-source. Maybe, if you talking about buying all bitcoins in the existence, that’s impossible, because it will just drag the price up. If I have 100 bitcoins and I see a guy that is buying them for $100, I’m not going to sell my bitcoins, I don’t want dollars, but if he’s going to give $100 someone might say “Okay, I’m going to sell them for $200”, and it may go up to $500, and then the price gets driven up.

SS:There’s this really famous software activist and programmer, Richard Stallman, I’m sure you’ve heard of him. He basically fights for the same thing you fight, he wants individual freedom, unconditional individual freedom on the Internet, but he thinks that cash is still the safest way of payment.

AT: Of course, and Richard Stallman is a fan of bitcoin. i organized the bitcoin conference last year in London, and he came and he spoke about bitcoin and other technologies, and cash is also a very safe way – it’s very anonymous, you are giving notes directly to a person, and there is no one else involved in that trade. Bitcoin is like digital cash. And when we’ll have bitcoin cash – this would be perfect for us.

SS:Just really quickly, because we’re out of time. You know these recent leaks by Snowden that actually prove that there is no such system on the internet that government or the hackers cannot break into. Is the bitcoin system breakable into? It can’t be safe, because every single system that has come up before bitcoin has been broken into – why can’t bitcoin be broken into?

AT: If we take the internet, the internet is a tool that was put out and empowered a lot of people – but as it exists, there’s a whole body of people who are building tools to track people on the internet, to sensor information on the internet, and just to generally oppress people. At the same time there is another group of people on the internet, who are building tools to allow people to get around the tracking, to anonymize [sic] their identity, to get around censorship and just to generally be free people. Bitcoin was also put out on the internet to free people, to empower a lot of people.

At the same time, there will be people who are researching into bitcoin, how to track financial transactions, to censor the financial transactions, and how to oppress people – and there is also a group of people who are researching how to get around tracking, to anonymize [sic] financial transactions, to get around censorship of financial transactions, and just to generally free people.

It’s always a constant struggle between these two groups of people throughout society. The really cool thing with these internet technologies is that they tip the balance more in favor of those who want to free people. And that is what I love about bitcoin –it’s first, but it’s not the end – we have to keep fighting, we have to keep pushing, we have to build more and more better tools for the people.