the
virtual
currency.
They began talking about
what they might do to rein in
the
excess,
including
reintroducing trading fees so
that buying and selling coins
would no longer be free. But
other Chinese exchanges had
also
removed
trading
commissions
and
were
nipping at BTC China’s
heels. If Bobby imposed fees,
customers would simply flee
to
the
other
exchanges.
What’s more, Bobby and
Ling didn’t want to give any
sign of panicking.
Before they could make
any moves, more encouraging
news
came
out
of
Washington—the last thing
Bobby needed. A day after
the
hearing
chaired
by
Senator Carper, the Senate
Banking Committee had its
own
hearing
on
virtual
currencies, which covered
much of the same territory
and drew much less attention.
At the end, though, Senator
Chuck Schumer, a member of
the
banking
committee,
entered the hearing room.
This was the man who, back
in 2011, had called for a
crackdown on Silk Road and
implied that Bitcoins were a
part of the problem. Now, he
wanted to let it be known that
he had been misunderstood.
“I do not want to shut
down or stamp out Bitcoin,”
Schumer said. “The potential
for a new payment platform
and the rise of alternative
currencies
could
have
profound
and
exciting
implications for the way we
conduct
financial
transactions.”
THE UNMISTAKABLE IRONY of
these wild days was that a
technology that had been
designed, in no small part, to
circumvent
government
power was now becoming
largely
driven
by
and
dependent on the attitudes of
government officials.
This was no accident.
Patrick Murck and the new
Silicon Valley advocates for
Bitcoin had been arguing for
months that the technology
was not, as Satoshi Nakamoto
had initially intended, a
network
that
allowed
participants
to
make
anonymous
transactions
outside the reach of the
government. At the Senate
hearings, the Bitcoin panelists
all emphasized that the virtual
currency was actually a
terrible way to break the law.
With the full record of
transactions
on
the
blockchain,
the
Bitcoin
advocates said, it was often
possible to identify the people
involved in transactions, or at
least more possible than it
was
with
transactions
involving cash.
But the advocates for the
original vision of Bitcoin
were not folding their tents
and going away. Not long
after Ross’s arrest, Silk Road
2.0 showed up on the dark
web,
offering
the
same
services in essentially the
same format that Ross had
used.
The
arrests
of
moderators
and
administrators
from
Silk
Road 1.0 kept coming, but
this wasn’t serving as a
deterrent.
Beyond
merely
resurrecting the old Silk
Road, some developers began
trying to devise a truly
decentralized online market,
which would not have to rely
on the sort of centralized
escrow service that Ross
Ulbricht and his staff had
provided
and
that
had
ultimately proved to be the
site’s worst weakness.
Meanwhile,
on
the
Bitcoin forums and Reddit
the libertarians and anarchists
were more passionate than
ever in their defense of the
original spirit of Bitcoin and
in their criticism of the
accommodationists
at
the
Bitcoin
Foundation
and
elsewhere.
Roger had evolved into
the spiritual leader of this
wing
of
the
Bitcoin
community. He had been one
of the only people who had
chosen not to respond to the
inquiries from the Senate
committee.
In
early
December Roger used some
of his Bitcoin holdings, which
had
gone
up
in
value
thousands of times, to make a
$1 million donation to the
Electronic
Frontier
Foundation, an organization
that had been started by a
former Cypherpunk to defend
online privacy, among other
things.
Roger
had
also
continued to be outspoken in
his advocacy of a Bitcoin
network that didn’t require
users to hand over lots of
personal
information.
At
Blockchain.info, he supported
the development of Shared
Coin, a service that mixed up
coins
from
different
transactions so that it was
impossible to tell which ones
came from which addresses.
Roger
spent
most
of
November in England with
the
founder
of
Blockchain.info
and
his
newly hired CEO, looking at
ways to expand the company.
The
number
of
Blockchain.info wallets had
grown to almost 700,000
from 350,000 just a few
months earlier. When Roger
needed a break from the
work, he would visit the local
jujitsu dojo with his custom-
made
kit,
or
uniform,
featuring a big gold Bitcoin
emblem on the back.
There were several other
programmers
and
entrepreneurs pushing in a
similar direction. Tinkering
with the Bitcoin protocol,
programmers
had
created
whole new cryptocurrencies,
like Anoncoin and Darkcoin,
which
were
explicitly
designed to preserve the
anonymity of their users.
Within Bitcoin, the most
ambitious projects aimed to
build services that allowed
for the exchange of dollars
and
euros
for
Bitcoins
without going through a
central service like Coinbase
or Bitstamp. Everyone now
saw that any company that
handled traditional currencies
would inevitably be subject to
traditional regulations.
Events in the broader
world validated many of the
fears that had originally
driven the Cypherpunks and
Satoshi
to
imagine
a
revolutionary new currency.
Government
documents
leaked by Edward Snowden
showed, over the course of
2013,
that
the
National
Security Agency had indeed
been secretly monitoring the
electronic communications of
a wide swath of American
citizens. But the relatively
apathetic public response to
the tales of NSA surveillance
suggested
that
most
Americans didn’t actually