Has anyone ever heard of Bitcoins being used in jail?
Someone could easily have someone create them a bunch of wallets with a sum of coins they have on the outside, then have someone send them the addresses and the amounts. Then trade those addresses. Or, some people have people that visit them all the time and will take care of business stuff for people, and someone could just keep a ledger then have visitation and tell the person on the outside where to send what coins, and who else to contact so that they could get their share paid.
People reading this are like "How can you trust the person to actually pay", well in jail the person usually pays or the person finds some other way to get paid back.
Eventually, there could even be a coin made for this, and eventually petitions could be made for the institutions to start accepting it so that people don't do trading on the outside, unless they are on the outside.
It would also be good work incentive for prisoners if they made this themselves, premined it, and paid them with it. That way people could earn money in jail that they can use outside, as long as they play by the rules.
Most jails in the US don't allow internet access to inmates other than through a pre paid e-mail only system. You would have to get around "prison should be as painful as possible" law and order crowd to get any kind of reform.
I was not suggesting internet access.
If the prison were to accept it, what would happen is you would get a wallet when you came in. They would put that on a bracelet or whatever, and you would use that to buy things at commissary just by showing the guy your wrist so he could write it down (or scan it) and deduct that from the wallet they made for you, and you would have to have someone buy coins or mine for you, or you would have to do work to earn the coins that the jail mined.
This sounds shitty (more people would join inmate worker programs) , BUT you could leave jail with some money that might end up on the exchanges.
That's more or less the way they already do commissary (only with USD instead of BTC.) They give you an inmate number when you get booked in, your family puts money on your account, and money gets deducted whenever you buy something. They're not going to want to use bitcoin because it's an internal system. No need to fool with wallets, encryption, and broadcasting transactions when all you need is a ledger of how much money is on each account especially when there's only one place for inmates to spend the money (commissary.) Plus there's no reason to give inmates an actual curreny when it's cheaper to just give them "JailBux" or credit for overpriced food.
Now the other way they could utilize bitcoin is to accept it as a way for families to send money to the inmates. For the reasons I stated above, they would likely just credit the inmate for the equivilent amount in USD and put that in their commissary account. However, even if they do this, it's not likely to reduce the cost of sending money or make it any quicker. You need to understand just how many people profit off throwing others in jail. In order to send money to an inmate you're probably going to have to go through a company like JPay. I just pulled up a random prison to get their rates:
http://www.jpay.com/Facility-Details/California-State-Prison-System/California-City-Correctional-Center.aspxThe very least you're going to pay is 5% and that's only if you send $200. If you only have $20 to send you're going to pay 20%. These companies have deals with the state (or private prison) to be the sole provider of the money services. They have a monopoly and there's no way they're going to let up on those prices. In fact, if they do start accepting bitcoin, I can see them using an exchange rate that heavily favors them making it cost even more. Just because the technology has improved, a company with a monopoly isn't going to drop prices. Same with inmate phone calls... when everyone else got Sprint's 10 cents a minute long distance, inmates are paying up to $1 a minute.
The one place I can actually see bitcoin being used effectively is on the black market. Basically the way it works now if someone wants to buy, say drugs, in a larger amount than is feasible to trade in food or stamps they'll tell the buyer's family to send money to the seller's family via Western Union or MoneyGram. Obviously that's going to leave a paper trail and likely require the money recipient to show ID. If they instead sent a bitcoin transaction, it would cut most of the paper and speed up the transit time so Smacky McInmate can have his heroin in half the time.
