The real danger of Bitcoin

It’s been interesting to see the debate over Bitcoin start with currency, move on to payments, and now there are rumblings that its real use isn’t for either. Rather, cryptocurrency could be a way of marking digital goods as unique, making them in effect rival. Technology Review explains:

Or take digital art. Larry Smith, a partner at the business architecture consultancy The matix and an analyst with long experience in digital advertising and digital finance, asks us to “imagine digital items that can’t be reproduced.” If we attached a coin identifier to a digital image, Smith says, “we could now call that a unique, one-of-a-kind digital entity.” Media on the Internet—where unlimited copying and sharing has become a scourge to rights holders—would suddenly be provably unique, permanently identified, and attached to an unambiguous monetary value.

This would almost certainly be bad news for the Internet. The ability of users to copy digital content has put necessary pressure on rights holders to lower costs, change business models, and innovate. We live under a ludicrous intellectual property regime in which rights holders lobby their way to ever-extending copyright terms. Making it easier for rights holders to enforce copyright online would result in more expensive content and would take all the pressure off both for improved digital distribution models and intellectual property reform. Put simply, the non-rivalry of digital goods is one of the things that has made the Internet such a boon for consumers. If cryptocurrency undoes that, it would be a shame.