I recently read a Gizmodo article about BitCoin, a new digital currency that is peer-exchanged — and generated — and aims to “revolutionize global finance.” It’s a nice idea, really, and some stores and services have already adopted it. According to Gizmodo, you can already trade BitCoin tokens for web designers, games, guns, and even drugs — yep… drugs. This sounds like the makings of real money to me, but how far will it — or can it — go?
Money is many things: the root of all evil, maker of spinning worlds, an absolute necessity to live in our society, yada yada. It also has a basis on which to trade — generally gold and silver repositories that give the coins and paper some degree of relative worth. Even our debit and credit cards, which are the primary ways of buying things digitally, are tied up in the worldwide economy of shiny valuable metals. This has been going on for thousands of years, ever since a few people decided that hoarding pretty things was a good way to live — and other people decided they wanted those same pretty things too. In a nutshell, anyway.
Can BitCoin stack up against all of that? It creates itself out of nothing! It’s an app on your computer that uses your machine to crowdsource the power to facilitate the currency’s transactions, all the while generating tiny bits of BitCoins for you. The creators have put some thought into it, sure, putting a cap on the creation of BitCoins (21 million in total) that will introduce scarcity, and therefore a basis for value, but what kind of potential does this new currency have against thousands of years of history? Not to mention that the wheels that turn the economy, like credit card companies, might have a thing or two to say on the matter – especially about the lower of fees, transaction limits, country walls, and other things that provide financial control over users.
I think BitCoin is a nice idea. I think it even has potential — at least to gain some sort of reasonable adoption over the long term. It will probably be a very long term, though, before any real revolution is seen. Everything we do is too tied up in regular currency. There are those out there who believe in BitCoin now, however — and they are trading the online currency at one BitCoin for $7.50. That’s virtual coins for real money — and not bought by someone who is looking to get a new castle or set of armour in their favourite MMORPG.
Think about it.
Is BitCoin revolutionary? Doomed to failure? Ahead of its time? — Or maybe all of the above? Let us know what you think in the comments.
What is BitCoin [Gizmodo]