Current Issue
April 2014 magazine cover
Subscribe

Save 81% off the newsstand price!

Special Report

Keeping you current

Bitcoins May Power the Next Election Cycle

Soon, you might be able to donate bitcoins to your favorite poltician's campaign

Physical bitcoins exist, but the currency is a digital one. Photo: Antana

Until recently, bitcoins were mostly used as a way for people to buy drugs on the internet, or as a playground for people who really love economics to play economics. But now, says the Washington Post, the Federal Election Commission is considering letting political candidates accept them as campaign donations.

To the extent that political campaigns are swayed by funding, the decision to allow bitcoins into the fray could have some interesting effects. Bitcoins are a fabricated currency, a monetary system tied to nothing other than the idea that someone, somewhere, wants to buy them. A lot of people do want to buy them, though, and the price of bitcoins, which come in a limited supply, has soared over the past year.


The price of a bitcoin in US dollars (right axis) over the past year. Photo: BitCoinCharts.com

Where at around this time last year a single bitcoin was worth a few bucks, they are now valued at more than $400 each, with the potential to climb much, much higher. Since bitcoins are not restrained by anything physical their cost could, theoretically, climb indefinitely—or crash without notice. Such rampant growth could give political purchasing power to whole new groups—if they were lucky enough to catch the currency’s growth.

More from Smithsonian.com:

David O’Keefe: The King of Hard Currency
New British £10 Note Will Feature Jane Austen

Tags
About Colin Schultz
Colin Schultz

Colin Schultz is a freelance science writer and editor based in Toronto, Canada. He blogs for Smart News and contributes to the American Geophysical Union. He has a B.Sc. in physical science and philosophy, and a M.A. in journalism.

Read more from this author |

Comment on this Story

comments powered by Disqus