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Markkula Center for Applied Ethics

The Ethics of Digital Currencies

bitcoin coin

bitcoin coin

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Irina Raicu

Irina Raicu is the director of the Internet Ethics program (@IEthics) at the Markkula Center for Applied Ethics. Views are her own.

On November 2nd, at noon, the Markkula Center for Applied Ethics and the High Tech Law Institute will co-present an online panel discussion titled “The Ethics of Digital Currencies.” I will be moderating the panel—and it is not too late to register to attend.

Issues that are likely to come up include the volatility of some of the most widely adopted digital currencies; the environmental impact of crypto mining (and proposed solutions); decentralization and the opportunity to help the unbanked; questions about who might benefit v. who might get harmed as use of such currencies becomes more widespread (given disparate access, understanding, and behavioral aspects); the increase in regulatory actions in this space; and more.

Below are some (mostly) recent articles that provide some context for our conversation—with the caveat that new developments are shifting that context all the time.

“The community of users records the transactions and ensures the value. It’s a radically democratic way of thinking about currency. If that community of users could create stability and security in the value of the currency, then it definitely could fulfill Fichte’s goals for an ethical currency.” (Note: article from 2018, focused solely on Bitcoin) https://www.business.rutgers.edu/business-insights/bitcoin-ethical-currency-not-according-professors-new-research

“High sentiment beta assets offer lottery-like payoffs. While Bitcoin certainly does a good job of that, it cannot simultaneously serve as an effective medium of exchange and reliable store of value, even setting aside the issue at the heart of the electricity debate.” https://www.forbes.com/sites/hershshefrin/2021/07/08/the-great-bitcoin-electricity-debate/?sh=7db9e2e71998

“Regional instability has driven crypto-remittance adoption across Latin America. In economies affected by hyperinflation, the relatively volatile fluctuations of cryptocurrencies are actually more stable than those in fiat currencies.” https://restofworld.org/2021/crypto-remittances/

“Whether proof of space, time, or some other consensus mechanism beats out proof of work as the cryptocurrency industry’s future is impossible to know today. But investors are already starting to place their bets, even if sustainability is not the driving factor.” https://fortune.com/2021/09/24/sustainable-altcoins-bitcoin-dominance/

“Crypto regulations are coming. The question now is whether the slow process of creating rules and passing laws will be able to keep up with the rapidly evolving world of cryptocurrency.” https://www.vox.com/recode/22663312/coinbase-sec-cryptocurrency-bitcoin

“Because of the lack of user data, cryptocurrencies… have been hailed as a safe haven for criminal activity…. But forensics investigators are getting savvier at scrupulously mapping activity on blockchains and figuring out who is behind specific accounts.” https://www.washingtonpost.com/technology/2021/09/22/stolen-crypto/

“Cryptocurrency Tether and crypto exchange Bitfinex will pay $42.5 million to settle civil charges from the U.S. Commodity Futures Trading Commission (CFTC) over allegedly making misleading statements and making illegal transactions.” https://www.reuters.com/technology/tether-bitfinex-agree-pay-425-mln-fines-settle-us-cftc-charges-2021-10-15/

"’Virtual currency-related business activities are illegal financial activities,’ the People's Bank of China said…. And foreign websites providing such services to Chinese citizens online is also an illegal activity, it said.” https://www.bbc.com/news/technology-58678907

“Bitcoin notched a fresh all-time high as investors cheered the successful launch of the first U.S. bitcoin futures exchange-traded fund”: https://www.cnbc.com/2021/10/20/bitcoin-jumps-to-new-record-high-above-65000-after-landmark-us-etf-launch.html

“By one count, 81 countries — representing 90 percent of the world economy — have been exploring creating their own CBDC [central bank digital currency]…. Advocates for creating digital dollars say the new currency would have all the advantages of cryptocurrencies but none of the drawbacks.” https://news.yahoo.com/digital-dollars-should-the-us-have-its-own-virtual-currency-184214037.html

Looking forward to an engaging discussion with experts from multiple disciplinesRegister now and join us on November 2nd.

 

Image: "Bitcoin mining and crypto currency concept" by wuestenigel is licensed under CC BY 2.0

 

Oct 28, 2021

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