BITCOIN IN MONTANA: What's All The Fuss About Anyway?

• Author: Bridge, Brandon
• Position: Cover story

Bitcoin has been all over the news lately thanks to its meteoric rise last-year. The merits of the crypto currency have been debated by experts on CNBC and Bloomberg, touted by celebrities such as actor Ashton Kutcher and rapper 50 Cent and been the topic of late night comedians like Jon Oliver.

You may have heard the terms "hodl," "hyperbitcoinization," "nocoiner" and "fiatsplaining" from friends in the know or read about Bitcoin fortunes being made or lost. It's spurred a string of stories in global media outlets and made local headlines in Montana too, as cryptocurrency miners began opening operations in the state.

The fascination with Bitcoin, referred to as a cryptographic digital currency, caught the media's attention when it's price shot up from $750 in January 2017 to nearly $20,000 the following December. This caused some experts to assume it was merely a speculative bubble with no real value, while others claimed it was revolutionary, a transformative economic technological innovation.

One thing is certain; no one seems to agree on what it is, if it is interesting and whether or not it is just a passing fad. So, what is Bitcoin and what are its implications for Montanans?

History of Bitcoin

As Americans, we have a tendency to take things for granted that people in other parts of the world would consider a luxury, such as our access to financial services. The average American can, with relative ease, open up a bank account and entrust their savings to a bank without much thought of losing access to their money or its purchasing power. When thought of in a historical context, this is a relatively rare phenomenon and currently not the case in many areas of the world. According to the World Bank, 38 percent of individuals worldwide, over the age of 15, have no access to any financial account. Seventy-three percent of those in the same category have no formal savings to speak of and 89 percent have no access to formal borrowing.

In many areas that do have access to traditional financial services, centralized monetary mismanagement has rapidly eroded the purchasing power of people's savings. Hyperinflation (e.g. Zimbabwe and Venezuela), bank bail-ins (e.g. Cyprus), official currency delisting (e.g. India), financial crises, spiraling public debt (e.g. Italy, Greece and Spain) and capital restrictions (e.g. Argentina and China) have created a scenario where many individuals have lost faith in their financial institutions. This unrest and disillusionment became evident in America during the Occupy Wall Street movement, which sprang to life in the aftermath of the 2008 financial crisis.

In the face of these realities, some have argued for the need of a financial system that is less prone to the instabilities and pitfalls that are the...