Tag Archives: Bitcoin

(geekwire) A developer who specializes in the Bitcoin digital currency says he was sent back to China last week after he arrived at Sea-Tac Airport with only $600 in cash and wasn’t able to convince U.S. Customs and Border Patrol agents that he would be able to fund his two-month visit using Bitcoin.

The developer, who goes by the alias “Doctor Nefario,” identifies himself as the founder of the Global Bitcoin Stock Exchange. He was coming to the U.S. to work with entrepreneurs Mike Koss and Peter Vessenes at theStartPad offices in downtown Seattle, said Koss, the StartPad director. Koss has been contemplating Bitcoin-related projects, and Vessenes has been working on one.

Koss says “Nefario” even paid StartPad in advance for a desk at the co-working space … in Bitcoin.

“With three of us in the office working on or thinking about Bitcoin projects, we thought we’d have a quorum to have a ‘Bitcoin Development Center’ based out of StartPad,” explains Koss via email. “With Nefario’s turn back at customs, we’ve lost some momentum on that.”

Nefario (whose alias is a reference to a “Despicable Me” character), gave more of his background in this interview with Bitcoin Weekly in June, describing himself as a cypherpunk. He chronicles his recent attempt to come to Seattle in this blog post, saying that the custom agents were courteous but highly skeptical about his explanation of how he would be paying for his travel and accommodations.

I was put into a small office when the five to six hours questioning began,did I have a credit card? How come I ony had $600? What the hell is bitcoin?

Although I was cash poor I had more than enough bitcoin to cover all the costs of my trip and stay, I was going to be meeting with bitoption later that morning in Seattle, he had $1500 of cash to exchange. I explained this to the agents and then the topic of the questioning turned to how bitcoin worked.

After about an hour of that, they took my iPad and brought back my phone, asked if either of them were locked, and then made copies of what was stored on both. They searched me, and my bags, I was questioned and cross examined on who I would be visiting, what I would be doing, and how I exchange bitcoin for dollars or services , how I got the bitcoins… for hours.

Nefario describes himself in the post as Irish and British and says he was travelling to the U.S. under the Visa Waiver Program. In the end, customs agents informed him he wouldn’t be entering the U.S. and sent him back to China, telling him that he could apply for a Visa to return in the future.

Koss has refunded Nefario’s rent money, transferring the Bitcoin back to him, but the StartPad guys are still hoping to collaborate remotely with him on Bitcoin-related projects.


( Neal Stephenson’s novel The Diamond Age takes place in a future where encrypted currencies and e-commerce have moved most economic transactions into “darknets” beyond government’s capability of monitoring and regulation, causing tax bases around the world to implode and bringing on the collapse of most nation-states.

Encrypted currencies and darknet economies have been promoted by such thinkers as Daniel de Ugarte and John Robb as a real-world model for resilient communities in the impending age of hollow states. So you can imagine my reaction to recent news of Bitcoin, “a Peer-to-Peer Electronic Cash System.”

Jason Calacanis and his colleagues at LAUNCH describe Bitcoin as “The Most Dangerous Project We’ve Ever Seen” (May 15, 2011).  Not only is it “the most dangerous open-source project ever created,” but “possibly the most dangerous technological project since the Internet itself.”  It “could topple governments, destabilize economies and create uncontrollable global bazaars for contraband.”

The beauty of Bitcoin is that there’s no central server network to shut down. Bitcoin is traded from one desktop or mobile device to another via public key encryption. Short of catching and prosecuting end-users with harsh punishments — and we all know how well that’s worked out for proprietary content companies versus file sharers — there’s no way to stop it.

There are currently 6 million Bitcoins in circulation, with a total value of $40 million. Bitcoins are generated by a complicated algorithm, with the total to top out at 21 million. After that, increases in exchange of goods and services will be offset by appreciation of Bitcoins in value and deflation of Bitcoin-denominated prices.

This fixed upper limit and requirement for price deflation thereafter is one ground on which Bitcoin has been criticized. Another is that, since it’s not denominated in a familiar unit of measure like dollars, it’s confusing as an instrument of exchange for the average person.

As an alternative currency geek, I’d add the criticism that you can only engage in Bitcoin-denominated exchange if you’ve already obtained Bitcoins from previous transactions. This is definitely a downside, compared with the kinds of “mutual credit clearing networks” proposed by Tom Greco.  Greco’s mutual credit isn’t a store of value from past transactions — just a measure of value for denominating exchanges of present or future goods and services.  The backing comes entirely from the goods and services themselves.  Like the many local barter networks that flourished during the Depression, mutual credit is a system for facilitating exchange even when there’s “no money.”

Despite my reservations, I consider Bitcoin grounds for enormous excitement.  Pirate Party founder Rick Falkvinge calls it “the Napster of Banking” (, May 11, 2011).

As Falkvinge argued, it’s usually not the most feature-rich version of a new technology that achieves popular acceptance.  Rather, it’s the most user-friendly.  “… [I]t takes about ten years from conception of a technology, or an application of technology, until somebody hits the magic recipe in how to make that technology easy enough to use that it catches on.”

Technologies for sharing digitized music had been around for ten years when Fanning came up with Napster.  Geeks had been sharing videos for ten years when YouTube came along.  Falkvinge thinks Bitcoin will do the same for encrypted e-currency.  It’ll do to banking what BitTorrent’s doing to the music industry.

Here’s how Falkvinge describes the ramifications:

“The governments of the world are on the brink of losing the ability to look into the economy of their citizens. They stand to lose the ability to seize assets, they stand to lose the ability to collect debts. … All the world’s weapons in all the world’s police hands are useless against the public’s ability to keep their cryptographic economy to themselves. … The decentralized, uncontrollable economy where one lifetime employment is no longer central to every human being is something I’ve called the swarm economy, and I predict it will redefine society to an immensely larger extent than the ability to get rap music for free.”

This is vitally important to a central theme in my work: The emergence of non-state spaces within which the low-overhead informal and household economy can function, outside the state’s ability to impose artificial scarcities  and entry barriers and collect tribute for the usurers, landlords and proprietary content owners.

Bitcoin is monumentally important.  Encrypted currency has been at the Altair stage of development. If Bitcoin isn’t actually the Apple II — and it may not be — we’re still just around the corner from that level of popular adoption.