After reading the BBC article “Bitcoin miners hit back at cyber-thieves” I realized (again) how little I knew about how and by whom Bitcoins come into existence. I’m not going to get into the technicalities of mining but rather the politics of it as the opening title suggests. The Cyprus President Nicos Anastasiades said Cyprus has no intention of the leaving the European single currency, and further the country’s president says.: “In no way will we experiment with the future of our country.” But would they consider mining their own Bitcoin in the mean time? After all, if Botnets can mine Bitcoin so couldn’t the massive computing power of any government that so chose to.
I think it would be an interesting analysis to see, for example, if the massive amount of computing power of the US Social Security Administration might generate enough wealth from mining Bitcoin to support itself. Or how about if the U.S Military did the same. Would they be able to be self funded? And let’s not forget the computing power of the IRS. Perhaps they could earn more than they generate in tax revenue garnished from the population?
And of course the proposition resurrects all the old quandaries that Bitcoin presents such as whether or not Bitcoin is, indeed a currency because, if a nation such as Cyprus started mining it and if the European Union officials got wind of it, it could be considered a violation of their monetary agreement in which each sovereign agreed not to issue their own currency. So maybe , to be on the safe side, Cyprus should mine Bitcoins anonymously and covertly? Wouldn’t that be something! Imagine if the single Bitcoin feature of anonymity becomes the draw for sovereign nations to get involved. Ironic would be putting it mildly since nations want to monitor every transaction possible.
And the same argument could be applied to any government agency. The military cannot “print” their own money – legally – but could they mine their own Bitcoin – legally – since it isn’t a recognized currency?