A simple search on ‘bitcoin’ supplies hundreds of thousands of results ranging from absurd articles to sketchy sales sites. But this is the world of alternative and digital currency, where thousands of dollars are a click away.
Alternative and digital currency creeped into the economic scene beginning with Bitcoin in 2008. Not until around 2014 did digital currency have its big break. Its inventor is disputed to this day, but most sources tie the idea to Satoshi Nakamoto. Nakamoto remains elusive and is even rumored to be more than one person. This currency was complex and not well-known outside of cryptographers and others in specific web forums. Those in the know began to trade and farm Bitcoin as its value to the U.S. dollar climbed higher and higher. Bitcoin was originally appealing because it was a simple way to cut out the third party in online purchases.
Bitcoin’s creators were dissatisfied with the trust that was involved when making a purchase through websites. Instead of using credit cards and working through banks, the creators invented a way around using a currency that was strictly digital. Their new “decentralized” currency can be bought, traded and used for tender online without the inclusion of a bank or other entity. Bitcoin starts on the internet and stays on internet and was intended to fill the void of a peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another. Bitcoin can be used to buy anything (the first transaction ever completed was pizza) and is sent through the internet. Bitcoin also claims easy and fast international usage. Because all purchases are sent through the internet, the user isn’t limited by differences in international currency standards, such as the difference between a dollar and a euro. Satoshi outlines this and many other key parts and functions of bitcoin in what is known by insiders as “The White Paper,” but simplified versions of how bitcoin is used and the theory behind it are available on websites like bitcoin.org.
One element of the bitcoin that has attracted users, especially as it has grown, is security. Bitcoin.org boasts that bitcoin is protected by military level cryptography and many types of fraud. Bitcoin being hard to trace has played a part in creating what bitcoin comes under most fire for. Many shady deals hide behind the secret walls that protect bitcoin and its users. Bitcoin is popular on the black market and has been traded for a myriad of illegal commodities. This has made bitcoin infamous in pop culture, for instance, the 2015 movie “Dope” portrays a group of high schoolers who use bitcoin to trade drugs on the black market. Even secrets have been traded for a bitcoin reward, but this news has not slowed the burgeoning bitcoin market. Investors, businesses and traders alike continue to flock to the currency and as a result it is becoming increasingly popular in everyday life.
Bitcoin does, however, have some people worried. Some economists fear the decentralized power of bitcoin and its propensity to place economic power in the hands of the common man. Its convertibility allows it to be used in many settings and it can unseat banks and other centralized economies from their wealthy positions.
Some governments are also worried about the use of bitcoin. Bitcoin is completely illegal in only Bangladesh, Bolivia, Ecuador and Kyrgyzstan, but regulated slightly by different governments and organizations. Because bitcoin is still fairly new and falls under no particular jurisdiction, it is loosely regulated.
Despite this, investors have been taking the risk to buy in on bitcoin while there is still money to make on it. This risk has been paying off, especially of late. A recent surge has catapulted the worth of bitcoin up $1,000 in less than a month. Bitcoin is still reeling from this growth spurt and one bitcoin is currently worth $5,954.52 (USD). Investors are keeping a close eye on their wallets and others are watching too. Developers at Google, for instance, are now dealing with an uptick in hackers attaching bitcoin mining programs and other malware to browsers so that they can increase their mining productivity.
Bitcoin will most likely continue to be the raucous newcomer in the finance world and stir up global debates about the role of currency in our lives and governments. Who knows, one day we all may be paying simply through a text or managing our own wallets and funds in a completely digital manner. Or, bitcoin will remain a fad of the early 21st century and disappear into the depths of the web. Only time can tell.
Image via Steve Jurveston on Flickr
