Friday, February 20, 2015

"Bitcoin" becomes a rather riveting, if funny, exploration by Morgan Spurlock on his "Inside Man" series for CNN


On Thursday, February 19, 2015 CNN aired one of Morgan Spurlock’s most interesting “Inside Man” episodes, “Bitcoin”, or “Can You Live off Bitcoin”?  The main link is here
  
Bitcoin is supposed to be the digital equivalent of cash.  The idea is to trade the currency anonymously.  It was supposedly invented in 2008 (or before) by  Satoshi Nakomoto which may be a group of people and not just one individual. 
  
Andreas Antonopoulos, author of “Mastering Bitcoin” on O’Reilly, is shown speaking at a bitcoin auction in New York , explaining how people in Argentina and other countries went to bitcoin because governments confiscated their bank accounts.  Bitcoin doesn’t have the vulnerabilities of credit and debit cards to hacking and fraud.
  
But later in the broadcast Spurlock reports that a bitcoin facility in Japan simply disappeared, and a few hundred million bitcoins just vanished.  There is no recourse; the holders are out of luck.  Could there exist something like deposit insurance?  That would require regulation and the intervention of sovereign states. 

Spurlock  explained how Bitcoin price fluctuates.  It was $664 at the time of filming.  It seems to be just $245 today (link ). So it appears very volatile. 
  
Spurlock walked around his neighborhood in Brooklyn, seeing what places would take bitcoin.  The first place he tried was a pizza shop, and it did indeed.  Payment was a simple smartphone transaction (with a virtual “bitcoin wallet”), assuming both phones had the right apps and credentials. He was tasking himself to live only on bitcoin for a week. 
  
He even booked a flight from NYC to Rochester through Expedia, which seems to take Bitcoin, to visit a Bitcoin “mine”.  He worked assembling circuit boards for the processor.  Then he showed how bitcoins are created by solving increasingly difficult math problems.  There are about 13 million in circulation, source) and there is supposed to be a limit to the “bitcoin supply” of 21 million.  So the math problems get harder all the time.  Spurlock also explained the “Blockchain”  The largest Bitcoin mine in the world is in Iceland, I believe. 
  
  
Later Spurlock ran into more conventional large businesses that offer normal consumer financing, and they had no idea what “bitcoin” was. 
  
Spurlock also reported on the “Silk Road” and how people connect to it anonymously by TOR.  In fact, USA Today now reports on a federal auction of founder Ross Ulbricht’s bitcoins by US marshalls here.  All kinds of illegal things were trade on “Silk Road”, and these besides drugs, would include items like fake driver’s licenses or ID cards, sometimes used by teenagers to get into bars illegally (especially when there is a 21 minimum age).  Of course, there were other ways people procured these items before Bitcoin (and that’s an important issue on my screenplay “Do Ask, Do Tell: Conscripted” in one of the layered backstories, something I need to clarify soon as a result of seeing Morgan’s report). 
  
I don’t own any Bitcoin now.  Some people suggest that some of someone’s assets (maybe 1-2 percent, up to 10%) should be in bitcoin – from different mines, if possible.  There is a natural question: should I get a bitcoin wallet and take bitcoin for my books?  I’ll look into that (and report on my Books blog, after some more reading, maybe the O’Reilly book).  If you want to take them automatically, you would need an e-commerce company and account that offers it;  my own service providers don’t right now.

As for film aesthetics, I certainly would rather see Morgan Spurlock walking the gentrified areas of Bed-Stuy looking for financial deals than having his chest and intestines modified in a medical report.  

It's also possible to explore a "moneyless" community (or shared income), called an "intentional community" like Twin Oaks or Acorn in Virginia, where work hours are the currency.  Morgan Spurlock could try living in one of these for a week.
     
Wikipedia attribution link for picture of older Bitcoin mining hardware by “FML”, under Creative Commons 3.0 Share-Alike license.     In the second picture, one of those coins is actually a Philadelphia SEPTA subway token.  

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