Bitcoin just got a bit more interesting in Texas. Congressman Steve Stockman announced that he will now be accepting bitcoin donations to help run his campaign for Senate. Stockman announced his decision at the NYC Bitcoin Center, which is appropriately located just down the street from the New York Stock Exchange.
The Congressman is known for his hyperbolic views and proposals. Stockman unabashedly declared that life begins at the moment of conception and even helped write a bill that would void the federal prohibition of firearms in schools; endorsements that are potentially tailored toward the political right. Yet Stockman’s announcement that his campaign is taking bitcoin sparked obfuscation across the political spectrum given the instability of the virtual currency. Political analysts are debating whether the Texas Representative’s endorsement of bitcoin will positively or negatively impact the campaign, which is already a statistical long-shot.
Bitcoin is a digital currency that set sail in 2009 and has since attracted significant media attention. The idea behind bitcoin is that, just as the United States has the dollar and Britain has the pound, the internet has the bitcoin. A publicly verifiable blog records every bitcoin transaction that takes place. A password is set into the virtual currency so that only 21 million bitcoins are ever in circulation. This prevents banks from inflating and devaluing the bitcoin. Although the theoretical groundwork for bitcoin is carved into place, the long-term stability of bitcoin is skating on thin ice.
The instability of bitcoin raises the question as to how the campaign actually intends to use the virtual currency. The dating website OKCupid and game industry Zynga plan to accept bitcoin, however, these are obviously small uses compared to the campaign. Furthermore, the currency has been used by less colorful websites, such as the black-market site Silk Road which was exposed by the Federal Government last October.
These events put the trustworthiness of bitcoin in a dubious light. A currency increases in value the more it circulates. However, recent events have stymied bitcoin circulation. The virtual currency was at an all time low last December. China is also noted for rejecting bitcoin on the basis that its value dropped fifty points within a forty-eight hour window. The bitcoin’s value fluctuates 20 to 30 percent a day, reports professor of finance at Boston University, Mark Williams. Although bitcoin just got a bit more interesting in Texas, the currency has little use on a worldwide stage. In short: sustaining a campaign requires tangible dollars, not virtual money.
Critics of Stockman argue the Congressman is irresponsible for endorsing a currency as unstable as bitcoin. However, the campaign reports endorsing the bitcoin is largely a matter of symbolic gesture. “I think digital currency is more about freedom,” said the Congressman in a YouTube video recorded on December 31. Furthermore, Texas is known for the polarizing Congressman Ron Paul who, among many other things, has lashed against the U.S. dollar. Stockman’s endorsement of bitcoin might give him leverage with Libertarians. Endorsing bitcoin has also provided Stockman with a media outlet—something the Congressman desperately needs. Since choosing to run against John Cornyn in the Republican Primary, the worst of Stockman’s polls show him down 44 points.
Although, bitcoin just got a bit more interesting in Texas, endorsing the virtual currency has little practical use to the campaign outside Libertarian and media traction. Perhaps Bitcoin Center founder Nick Spanos can offer the campaign his two cents.
By Nathan Cranford