Bitcoin – Monetary Scam or New World Currency?
by Temerity Forthright
Bitcoin is an electronic form of currency that was created and is held in the digital world. It isn’t printed or minted. There is no regulatory institution controlling Bitcoin or the people who use it.
A software developer known only as Satoshi Nakamoto proposed the idea in 2008 of a Bitcoin currency that can be instantly transferred electronically. Bitcoin has been in use since January 2009. It is a peer-to-peer electronic monetary system used to buy goods and services internationally with very low fees and very little oversight.
Since the currency is “virtual” the problems associated with exchange rates are virtually nonexistent. Bitcoin can be used anytime and anywhere in the world as soon as the network processes the encrypted payment.
Only 21 million Bitcoin can ever be created, but the “coins” can be divided into smaller units before being used. There are one million bits in one Bitcoin. A software program that follows a mathematical formula with a 64-digit solution produces Bitcoin. People can use a number of websites to buy Bitcoin and buyers may remain anonymous.
It is estimated that 15 million Bitcoin are currently in existence. Each Bitcoin is worth about $450, but they are intangible. You can, however, put them in your virtual “wallet” app.
Confused? Never heard of Bitcoin? Wonder where Bitcoin comes from?
Bitcoin is “mined” by its user members. Mining requires the use of proprietary software that solves a complicated mathematical problem which creates one block of Bitcoin. A block of transactions becomes a hash stored along with the block at the end of a blockchain.
Once Bitcoin has been purchased by a user, the user must locate a vendor willing to accept – and able to process – Bitcoin. The transactions are reported to be secure, instant, and anonymous.
Although the initial purchasing and usage of Bitcoin was slow, it has gained a strong following in the international marketplace in the eight years since its introduction.
A wide variety of companies now accept Bitcoin – including restaurants, online travel agencies, movie theaters, political parties, hotels, casinos, online games, technology and entertainment companies, art/ gift/ jewelry retailers, clothing outlets, and even dating services.
Craig Steven Wright is the 46-year-old Australian computer scientist, author, and entrepreneur who claims to be the creator and developer of the Bitcoin digital cash system.
To back up his claim, Wright used cryptographic keys that were created in the development of Bitcoin. He demonstrated with the same code he used to send cryptographer Hal Finney 10 Bitcoin in 2009 in the first transaction. Finney is the engineer who helped create the Bitcoin protocol.
Wright has been under investigation in Australia regarding his taxes, but it is apparently unrelated to his work with Bitcoin.
Bitcoin claims that even after 21 million Bitcoin are mined there will still be enough to go around. The Bitcoin that have been divided into smaller units will continue to be in circulation as a result of transactions by its users. When governments run out of money they simply print more, leading to the devaluation of its currency. (That is the real definition of inflation.)
Only time will tell if Bitcoin will survive and flourish as a viable form of digital international “currency.”
Does that clarify Bitcoin for you? Are you ready to dive into the virtual digital unregulated monetary world of the Bitcoin network and mine some blocks?