The failure earlier this year of Tokyo-based bitcoin exchange Mt. Gox may have stirred Japanese doubts about the credibility of the digital currency.

But despite its demise, many people worldwide view bitcoin technology as a world-changing innovation. Among them is Takafumi Horie, 42, former president of Internet firm Livedoor Co.

There have been many digital currencies and monetary services, including Suica, Rakuten Edy and Internet banking, but they are basically centralized and managed by certain companies or organizations.

Bitcoin, however, is not run by a company or the government, and participants can ensure, by monitoring, that transactions involving the currency are legitimate, Horie said.

In an interview with The Japan Times last month, Horie said it is impossible to predict whether bitcoin will become a mainstream currency because (Bitcoin) is like an enemy to nations.

Its global spread could undermine the authority of nations to issue currency, so (nations) would probably attempt to eliminate that system, he said.

Some nations have already taken precautions. China banned banks from handling bitcoin transactions and Russia announced in February that it was illegal to use bitcoin in the country.

But it is also true that bitcoin has the potential to reduce the role governments play in our lives, Horie said, noting that it eradicate government monitoring of online transactions, including contract information and voting records.

Horie discusses bitcoin innovations in the recently published book No Need for Nations Anymore (Mou Kokka wa Iranai), in which he talks to journalist Soichiro Tahara about the need for smaller government.

Bitcoin is a crypto-currency operated via peer-to-peer networks that are also used to run services like Skype and users computers are directly connected to each other instead of to a main server.

The rest is here:

Horie sees bitcoin as route to more security, less government