Bitcoin: The Virtual Currency

November 16, 2011 at 8:25 pm 3 comments

All over the world, we constantly hear problems of fluctuating currency values and federal regulation of money. A newly emerging virtual currency is looking to bypass all of these problems. Bitcoin is currently the currency accepted by many underground hacking networks used to buy and sell almost anything a “geek” would need.

The currency was once valued higher than the US dollar, British pound, and the Euro. The currency is built around the idea allowing buying and selling of merchandise without the control of banks and government entities. The Bitcoin also allows users to make anonymous transactions, which has led to its popularity for computer hacking.

I think the only thing that is more interesting than currency that is digital is how the actual exchange of money takes places. Since Bitcoin represent no real monetary amounts, the designers of the Bitcoin system had to be extremely careful with how transactions occurred. The transaction can be summed up in three steps:

  1. The Bitcoin owner purchases a product from someone
  2. The Bitcoin owner sends the Bitcoin to the merchant
  3. Most important, the Bitcoin is cryptographically signed by the old owner to show the merchant is the new owner of the coin.

The third step is the most important aspect of the coins success. The coin contains an encrypted history of all of the coin’s owners, and the security provided by the encryption is what attracts current Bitcoin users. If users are weary of sharing bank information with a questionable foreign distributor, sending a Bitcoin prevents the questionable firm from gathering any information about the buyer.

Recently, Bitcoin owners have experienced several Bitcoin hacks that have “stolen” the coins for rightful Bitcoin owner’s computers. The recent attacks have driven down the price of a Bitcoin to approximately $3.00 USD. The Bitcoin is currently only an accepted form of payment for few retailers, but it could be the future of currency!

So what do you think? Would you trust such a cyber-currency? As the online marketplace continues to evolve, I think consumer will seek more secure and private ways in which they can exchange money.

Check out the YouTube video on Bitcoins below:

Thanks for reading and have a great break!

Best regards,

Paul

Advertisements

Entry filed under: Uncategorized.

Hello, Goodbye An offer you can’t refuse??

3 Comments Add your own

  • 1. Anonymous  |  November 21, 2011 at 11:49 am

    Are online retailers also “underground hacking networks”? Also if the current Bitcoin is worth approximately $3.00 USD, then it is still valued more highly than the U.S. Dollar.

    Reply
    • 2. pltimme  |  November 21, 2011 at 10:48 pm

      Hi,

      I apologize if my article was unclear. The coin is current primarily used for underground hacking networks. Very few mainstream online retailers currently accept the coins. As stated in the article, it does present an opportunity for online retailers in the future. As far as the Bitcoin value, this may also have been an unclear point. The recent attacks and instability of the new currency causes many fluctuations in its price. The Bitcoin has ranged in value from $1 to $30 dollars, and at $1 dollar it would be valued less than the British pound and Euro. Again, I apologize if this was not clear. Please let me know if you have any further questions, and thank you for you comments.

      Reply
  • 3. Anonymous  |  December 2, 2011 at 11:15 am

    If the guys who set this up decide to give themselves lots of Bitcoins, we wouldn’t know about it until the market was flooded and they had spent their coins on whatever. Then the value would plunge because the trust is gone. Can I really believe that this won’t happen?

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Subscribe to the comments via RSS Feed


November 2011
S M T W T F S
« Oct   Dec »
 12345
6789101112
13141516171819
20212223242526
27282930  

%d bloggers like this: