(Posted as a comment to Charles Stross's blog post about bitcoin)

Bitcoin is a piece of software which tries to implement a particular SFnal future. One in which the world currency is de-centralized, deflationary, all early bitcoin adopters own their own planetoids, and all visitors are automatically charged for the air they breath.

Thing is, the real world is more complicated than that. Assuming Bitcoin did manage to become an important currency, countries would naturally try to regulate it. In 30 years, by the time bitcoin mining has slowed right down, the legal system will be fully caught up to the internet.

Bitcoin tries to make its code the law (as Lessig used to say), but the law can certainly affect its code.

The law could, for example, require that bitcoin be changed to stop increasing the difficulty of mining new blocks. Then bitcoin is suddenly an inflationary currency. This would be a hard fork in the block chain, but one enforced by financial regulators. Miners would be tracked down and forced to comply. Some would perhaps go underground and run the deflationary bitcoin network on TOR hidden services. Lots of possible ways it could play out.

That's only one scenario, covering one of the many problems with Bitcoin that make Charlie hate it. So it seems to me that Bitcoin should be a gold mine for Science Fiction authors, if nothing else..

comment 1

You make a good point about converting it to an inflationary currency. I doubt most of the current users have considered that risk

Also, Stross's recent book Neptune's Brood uses bitcoin (by name, even if the details are left slightly murky) as the basis for an interstellar currency. Having an open register and requiring confirmations of all transactions is actually a hugely useful aspect of bitcoin, one that I suspect will eventually be adopted, even if the rest isn't.

Comment by Daniel