Bitcoin: The Virtual Currency
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:
- The Bitcoin owner purchases a product from someone
- The Bitcoin owner sends the Bitcoin to the merchant
- 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!
Entry filed under: Uncategorized.