So, unless you’ve been hiding under a rock, you will have at least heard about Bitcoin. It’s been hailed as the new virtual currency for the digital world. Now, I’m all for a move away from currency owned and controlled by government and banking institutions, but I’m not so sure this is the way to go. I decided to delve a little deeper into the mysterious beast of Bitcoin.
Bitcoin, in their own site, state that they is a peer to peer way of managing online transactions. It’s more of a collective of users, making it a decentralised system of currency rather than the old guard centralisd system run and operated by governments and banks.
It’s an open-source, and community-driven software system, that involves downloading the wallet of your choice, that even has its own currency-linked vocabulary!
So where did it all come from?
The history of Bitcoin is as short as it is mysterious. No one knows the true origin of the idea, as it was posted as a concept under a pseudonym. The idea was then taken up, proof of concept published and was further developed by a group, including the original proposer, who left the group, never revealing their identity. They simply gave their idea to the world. In 2011, the idea managed to capture some media attention, which sparked a bit of a buy in by a good number of people.
So, does it have enough staying power?
That remains to be seen. I personally believe the current economic market sees it as a bit of a fad. I think it will have a hard time gathering the traction it needs to remain in use and build up a good market. Having said that, I really do hope it sticks. It makes sense – a decentralised currency for a decentralised system of transaction and interaction. I can see a few potential stumbling blocks for it though.
The powers that be will see it as a threat to the status quo, once it gathers enough users. If the banks can’t buy in to it, how will they control the currency? They won’t be able to, and this will further cause turmoil. It runs in line with my previous musings on needing a huge shift in the entire way in which we think about money and economy.
Governmental taxes will continue to be a thing. This is unavoidable. So, while we may well shift away from centrally owned and operated systems of transaction, we will not be able to completely shift away from geographic boundaries. This may prove a bit of an issue as Bitcoin gathers momentum. Governments will probably hesitate to recognise it as an actual form of currency and, as such, you may have Bitcoin wealth, but you will need to transact in the “real-world” with “real-world” currency. The exchange rates will probably start off as a joke, with operations setting up to exchange Bitcoin to real coin and reaping the rewards of providing such a service.
After all is said and done, I am not an economist. I’m not a political scientist, although I do find it amusing that those educated in these fields are unable to make sense of it all. I’m not able to make properly educated guesses as to how the world will embrace Bitcoin. These are just my musings on a very good idea that I hope will come to fruition.
If you want to read up on Bitcoin, you can take a look at the following links: