Bitcoin: The Future of the Oldest Profession?
WHY YOU SHOULD CARE
Because the economics of sex work tend to reflect greater economic trends to come.
You can find Liara Roux online, posing in lingerie as she rolls between sheets or stretches into erotic poses. She says she’s a student looking for a “little fun on the side,” and lets readers know she keeps herself “au natural.” Based in San Francisco, but available to travel nearly anywhere, she charges $1,100 for two hours and $4,000 for eight. “If you are interested in adding another woman or man to the mix, please don’t hesitate to let me know!” she adds.
Of course, payment is expected promptly, be it cash, credit card or … bitcoin.
Bitcoin. Is there anything it can’t be used for? Six years after its release, the digital currency has crept into the nether-regions of the global economy — the multibillion-dollar sex industry. Bitcoin is now a payment option at escort ad services like Backpage and Luxury Escorts International, while a small but growing number of independent escorts consider it a currency of choice. Their reasons vary. Liara Roux (that’s her nom de bizness) had long nursed an interest in cryptography, and when she began escorting, “accepted bitcoin right from the get-go.” Another “elite international companion” tells OZY that bitcoin doesn’t necessarily save her transaction costs, but that she accepts bitcoin “as a courtesy and for its international appeal.”
By some estimates, an average of $50 million in bitcoin trade takes place per day.
Indeed, for many escorts these days, bitcoin just makes good business sense. It allows them to offer their clients something more widely coveted than all the fetish objects in the world: discretion. A lot more of it than cash or credit cards, anyway. Because bitcoin scatters information across the Web, transactions are effectively opaque, and so are the identities of the people making and receiving them. Accepting bitcoin allows escorts to broaden their client base much the way that accepting, say, MasterCard expands the client base of a bricks-and-mortar retailer.
But discretion has its downsides, especially in sex work. While some independent, “high-end” escorts say they feel safer transacting on bitcoin than, say, carrying around a pile of cash, law enforcement officials say the spread of bitcoin poses dangers to the most vulnerable sex workers. Bitcoin, of course, has been a boon for all sorts of nefarious activity, from drug dealing to human trafficking — the authorities can’t easily follow a money trail. Indeed, officials in Los Angeles and the San Francisco Bay Area tell us they’re worried that bitcoin shields abusers. “It’s keeping us from keeping victims safe,” says Paola Estanislao, deputy district attorney of Santa Clara County. She specializes in human trafficking.
By some estimates, an average of $50 million in bitcoin trade takes place per day. The currency is based on a peer-to-peer system where users can make direct, instant transactions, and because there’s no mediator to regulate transactions — like a bank that’s backed by the FDIC — some observers worry about the possibility of fraud. Yet supporters argue that transactions are inherently safe because payments are verified, self-regulated by the network and listed on a publicly available digital ledger called the blockchain. Indeed, even mainstream companies like Overstock and Dell are partnering with bitcoin exchanges to accept it, which attests to its “safe transaction infrastructure,” says bitcoin expert Todd Shipley.
The blockchain ledger might be public, but it’s massive (more than 35 gigabytes at time of writing) and transactions are quasi-anonymous. Sifting through it all would require far more resources than the average DA’s office — let alone suspicious spouse — could muster. That’s a very valuable perk for philanderers, as well as anyone who wants to keep their books hidden from the authorities. Indeed, escort services in cities rife with corruption could find bitcoin useful for avoiding the watchful eyes of police officers looking for bribes, according to a spokesman for Bangkok Happytime, one of Thailand’s first bitcoin escort agencies. Bitcoin can be a pain to pay taxes on, but Liara Roux notes that she reports all her bitcoin proceeds to the IRS with the help of a dominatrix who is also a CPA.
Yet the currency’s spread could also make it harder for law enforcement to thwart human traffickers and bust up their networks. While Amnesty International, Human Rights Watch and other groups told OZY that they didn’t know enough about bitcoin to judge whether it was good or bad for sex workers’ rights, some who fight trafficking and abuse are very wary. Bitcoin is so new that police departments, trained mostly to go after social network predators, are playing cryptocurrency catch-up, says Estanislao, the Santa Clara County prosecutor. Besides, bitcoin has challenged traditional procedures and rules. For instance, hauling someone into court is difficult “because you need evidence at hand to serve subpoenas,” says Estanislao.
For independent escorts and those at high-end agencies, however, bitcoin is a net positive, with clear appeal. Except for one thing, notes Liara Roux. A few of her clients have found it tricky to use the newfangled currency, she says, which is a bummer. “Troubleshooting technical problems with them distracts from our time together,” she says.