Jerry Brito is a senior research fellow at the Mercatus Center at George Mason University.
Moving away from paper notes and coins and toward a digital currency is a no-brainer, at least when it comes to cost and efficiency. But when it comes to privacy and freedom, cash can’t be beat. We must ensure that we protect our civil liberties by preserving some untraceable payment method.
Imagine if the only way to support unpopular causes was with easily controlled e-money. Certain transactions could be disallowed by law, political pressure or corporate fiat, and anonymous giving would be impossible. Each of your transactions would be tied to your identity.
The nascent digital currency Bitcoin has demonstrated that such e-cash is possible.
Recently, Peter Sunde of Flattr was interviewed and carried the same sentiment.
I was on NPR’s Morning Edition this AM talking with Cyrus Farivar about the legality of gambling using bitcoin. What I find telling is that the casino operators, who are making a tidy profit, are keeping everything in bitcoin and at no point converting to dollars or other currency.