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Bitcoin: A New Type of Currency

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bitcoinImagine a digital currency that’s practically untraceable, hard to steal and isn’t regulated by the government.

Meet Bitcoin.

A Bitcoin is a form of currency that was launched in 2009 by Gavin Andresen and Jon Holmquist. The creative mind behind Bitcoin is credited to Satoshi Nakamoto, who had been working on developing the new unit of currency since 2007.

According to Andresen and Holmquist, Nakamoto was responsible for putting the ideas down onto paper and making it a reality. Who is Nakamoto really?

About The Creator

There has been a lot of conflicting opinions out there as to who Nakamoto really is. Apparently he has an excellent command of the English language, but according to his P2P profile, he’s a 38-year-old male in Japan. In short, nobody really knows!

How Does It Work?

Anyone with an internet connection can use Bitcoins for many different types of purchases. By setting up a “virtual wallet” via a third-party website or storing your wallet on computer-run software, you become part of a Bitcoin network that allows you to pay for just about anything you could buy with cash.

Since Bitcoins are extremely difficult to trace and can be used for long-distant transactions, they are being used by criminals to pay for illegal substances and activities.

What Are The Downsides?

The only value these Bitcoins have is determined by their market value, making them risky to buy/sell. Also, there are very few vendors who actually accept Bitcoins, and from what we can tell so far, it is difficult to exchange them for cash so your purchasing selection is really limited.

What Does The Future Hold?

The chances of Bitcoins becoming an/the official currency in the future seems like a long shot. However, it shouldn’t be ruled out. While it’s hard to imagine countries around the world leaving behind their currencies and adopting Bitcoins, we’ve only begun to dabble with the idea and have a lot of room to grow. Take an abstract idea like cell phones back in the early 1980′s.  Who would have thought 30 years ago that cell phones would be capable of becoming such a strong influence in our every-day lives like they are today?

Who knows when the government might pick this idea up and run with it, or Google, Paypal, or some other central authority.

What are your thoughts on this? Is it too early to begin speculating how valuable they are? Should we be looking at the nature and purpose of this currency a little more seriously? Do you think paper money will eventually die out? If so, what will replace it?

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