An Anthropologist Looks at Bitcoin

The anthropologist Alberto Sánchez-Allred writes about the digital currency Bitcoin:

People would argue that the use of Bitcoin is indeed founded on a trust in institutions. These are the exchanges, vendors, websites, and individuals that use them. However, if I go around the corner from my apartment to sell or buy some US dollars, assuming I know the exchange rate and am confident in my ability to spot counterfeit bills, do I need to trust the currency exchange office per se? Many people thought that Bitcoins would stop being used after the largest exchange, Mt. Gox, came crashing down a week ago. But would I stop believing in cash just because the currency exchange folded? The fact that Bitcoins retained their value even with the crash and fiasco at Mt. Gox demonstrates the extent to which trust in any single institution is not at stake here, not as it would be with non-cash type transactions.

Whole thing here.