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It seems as if one of the primary attractions of Bitcoin is its usefulness for nefarious purposes. I'm not sure how much of its value is underpinned by these activities, but I get the feeling it is not an insignificant amount. I was thinking about speculating on Bitcoin, but the thought of enriching someone who is harming someone else in another part of the world gives me some pause.

My question seems to intersect economics, technology and ethics, and I'd like to stimulate some thoughtful discussion on the ethics of Bitcoin use.

closed as unclear what you're asking by Swami Vishwananda, Not_Here, Keelan Jun 20 '17 at 14:06

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    Stack exchange sites aren't built or intended to be platforms for discussion (comments are ephemeral and limited in character length, etc.). You're gonna have an easier time with this question and a better chance of it not being closed as too subjective if you phrase it in a different way (i.e. not looking for a conversation). "What principles of contemporary ethics apply to the economy of bitcoins?" "Has any contemporary philosopher written on the subject of bitcoins?" Something like that is probably going to be better received. – Not_Here Jun 18 '17 at 6:29
  • The same could be applied to the markets in general, because there you have Pareto Efficiency in addition to Pareto improvement. Pure speculation is a function of exploiting, or being exploited by, Pareto efficiency. By the same token, investing in bitcoin raises confidence in the currency, which would be a Pareto improvement. Beyond this there is still the argument applied to illicit drug use, where purchasing certain illegal substances may support profound abuses of human rights. – DukeZhou Jun 18 '17 at 21:37
  • The question should narrow down, but it is a reasonable ethics/politics question. Both answers are clear and address 'Should Bitcoin exist, and should one use it? By what ethical principles is this supported or contested?" But since this is specifically about investment, there is also the question of 'Is Bitcoin a business that one can ethically help grow? By what ethical principles is such a decision made?" (Assuming my bias that speculation that is not investment is gambling, which is intrinsically destructive.) – jobermark Jun 24 '17 at 17:38
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I've worked with Bitcoins, and I want to give a technical point here before answering.

Bitcoins is a virtual currency, completely different for what we have known as currency until now. It's not an archive, or similar. Then, how does it work?

It starts when anyone that's already in the bitcoins red, gives you bitcoins (or a part of a bitcoin) in exchange for real money, products or services. When they gives you "bitcoins" they are actually changing the ownership of that amount to your personal wallet, which is not necessarily linked to a name and personal information. In fact you can have several wallets (actually you SHOULD have several wallets if working with bitcoins) also bitcoins can be mined, through computational problems. This works due to a decentralized mining method, which means several computers around the world trying to solve a computational problem, in order to sign transferences. When a money transference is digitally signed by the winner computer, this computer is rewarded with a part of bitcoin. Usually this is not solved by a single computer, but by computer pools working all at the same time in one problem. This way you can generate new bitcoins at the same time the transfers are being signed in order to avoid its replication.

Then, why does it have such a bad fame? As mentioned, Bitcoins are not linked to any name or personal information, means it respect the anonymity of the user. This leads in many criminals using bitcoins to buy weapons, drugs and prohibited services. But the money itself is harmless, it's this use which generates such consternation.

I think yours is such an interesting question, as it actually refers to the right of completely anonymity on the internet. You were referring to ethical issues, but is it actually ethical to obligate anyone give his/her personal information? I think the use of the anonymity in general, is ethical, because it's just a tool. The misuse of the tool itself could be ethically doubtful, but buying a coffee should not be unethical, as you would be supporting a tool -legal tool-, or simply a digital easy-to-use currency, but not necessarily supporting crime. By your statement, also buying computers is ethically doubtful as it's used by criminals as well, or the internet itself. It's just the concept of anonymity what is a blurry line we are not used to treat with in our lives.

So I think before asking yourself if bitcoins are ethical, you should ask yourself about the ethics of internet anonimity.

I think you could enjoy reading about Snowden, Assange, and take a look at the EFF, TAILS and TOR projects to learn more about internet anonymity.

I hope this was useful :)

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    First off, welcome to philosophy.SE. This has a lot of factual information about bitcoins... but I don't see much about the question about ethics. – virmaior Jun 19 '17 at 12:36
  • While there is no ethics of bitcoin yet in philosophy, I can imagine its possibility as I read in 'the economist' that the technical aspect of bitcoin is in the process of being implemented by big banks as well. if the technology is ubiquitous, and if it is involved with the right to privacy through anonymity, it could be a hot topic in phil one day. – Nanhee Byrnes PhD Jun 19 '17 at 14:22
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Ethics are an attribute of people, not devices.

With 100% agree on what @Paula wrote, I would emplhasize on that, the topic would better be refocused on people, who use tools. Tools do not measure ideology of their users, so themselves can hardly be un/ethical. People on the other hand pretty much can and will interact and encounter question of ethics.

As Paula wrote, Bitcoin is just another currency. People give trust and value for it, so it is considered as currency. You can buy, transfer and sell. You just do the same with any other money in the world. You do the same with hard cash too. No one asks your identity in the shop, you just hand over the banknotes. In shady business, the same happens in an alley, a closed room, or hidden area. Banknotes are anonymous too. I believe there is also no legal exclamation that a banknote can be matter of crime, but only being abused, and have the user charged.

So the dilemma about "enriching someone who is harming someone else in another part of the world" is valid with current banknotes too. Cryptocurrencies, as based on computer environment, has a chance to be logged and tracked. With considerable lower effort and efficency versus real life banknotes. Asking, why isn't that happening, will have the answer "People". Habits of people keep this "industry" going, and it will perform well, as long as people think they need this currency. Cryptocurrency, by current out-of-date (and lack of) legal consequences, is offering an easier money transfer, as it has no obligation to comply to legislations, and do not need to allow supervisor entities to check on transactions. In this aspect it is safe to say, that banks with digital currency accounts are just the same as digitally existing crypto currency, just the banks need to comply to regulations.

Behaviour of people, why they wish to use digital currency, is helped by the fact it is not fixed by geolocation. On the other hand, why they support unethical acts, it is much more and bigger mental hygiene and regulations question.

  • But people know this about cash, too. And if someone asks to be paid in cash, for any significant sum, most folks balk -- they assume, particularly in the U.S. -- that the person is of ambiguous immigration status, or is a felon evading tracking. So if this bothers people already, arguments that say, 'don't let that bother you' are off base. – jobermark Jun 19 '17 at 20:46
  • Similarly, we know charitable donations go to ISIS, but that does not mean we have to accept that either all charities are bad or absolve us of thinking about whether specific ones are. We can tell cases apart. This is a currency with more illegal use than other currencies, so making the analogy that all currencies are alike is like making the analogy that all charities are alike. – jobermark Jun 19 '17 at 20:57
  • @jobermark, What people do to currency is not the faulty of the currency. What's more, this currency is used in cyberworld, which is a feat, that you discuss unseparated from it's currency feature, and I advise highly to avoid. As I wrote, cryptocurrency has the same lack of fraud check, as a charity has. If the charities would be forced to be done in transparent process, it would be harder to support any undesirable act. Is fraud check a currency attribute? No, it is regulation attribute. If people do not want to check up, how and where the charity money go, that is people problem. – Sonic Jun 20 '17 at 7:45
  • The point is that this is a false equivalency. Making all cryptocurrencies look equal is like making all charities look equal. You might want to avoid Swiss or Cayman Island banks and other places that will not allow for a flow-of-money check, but traditional ways of following money are not impeded by electronic transfers. The money has to come from somewhere. So all encrypted transfers are not created equal. – jobermark Jun 20 '17 at 15:42
  • @jobermark In the aspect to measure, does Bitcoin itself allow unethical acts to be done, it is equal with other currencies. You can use paypal, country banknotes, but even barter to cover unethical acts. Simply making Bitcoin disappear will not stop unethical acts, so marking Bitcoin as unethical and base for covering unethical acts is wrong. Black markets did not appear because Bitcoin is invented. To answer the question in it's current form, Bitcoin is just a currency. Currency does no "nefarious" acts. People do. If people see no use of Bitcoin, they just won't use it. – Sonic Jun 22 '17 at 17:36

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