This paper concerns the open source software project Bitcoin. Bitcoin is often described as virtual cashand this
paper asks what the term ‘virtual’
when applied to ‘cash’ and
in turn what
says about Bitcoin. Bitcoin is related here to the 1990s activist movement of libertarian
cryptographers known as ‘cypherpunks’ and
to the cyber-libertarian political philosophy, demonstratingthe historical intertwining of cryptography and politics. Cypherpunks argued that privacy is aprerequisite for an open society and that cryptography and anonymous transaction systems were neededas assurance. Bitcoin is the latest effort by cryptographers to create digital tokens similar to cash, where
Bitcoin’s designer Nakamoto argues tha
t with Bitcoin users no longer have to trust a third party,traditionally the bank. Bitcoin does not fulfill this promise as trust remains to be established, albeit in adifferent manner. Power is not destroyed, but transferred from banks to
ocol. The paper
concludes that ‘virtual’
refers to Bitcoin’s model of how cash appears to function
in everydayexchange, allowing user privacy. Bitcoin does not model another aspect of cash, namely that it is acredential referring to debt. Bitcoin discontinues the concept of debt.
bitcoin, crypto-currency, cryptography, virtual cash, cybercash, electronic payments, online payments
I express thanks to René Glas for supervising this MA-thesis. Furthermore, although neither cash norBitcoins were involved, the intangible credits for designing the frontpage of this thesis really are forJan Zoutendijk.