For many of you that read this, you’ll probably never have heard of Bitcoins before, but it’s something worth taking note of.
Historically speaking, currency that is 100% virtual has never worked for three reasons. First is that not enough people had computers. Second, vendors (the ones that mattered that is) were unwilling to accept virtual currency as real money. Third, there was nothing to buy with that virtual currency since there was nothing to buy or sell.
Bitcoin is a bit different because everyone has a computer now (with internet access of course), there are in fact vendors willing to accept it as payment and as such there are things to buy and sell using it.
What makes Bitcoin worth anything is that it was designed to be rare. Like real currency, there is a set limit on how many coins can be made.
What makes Bitcoin potentially dangerous is that if it in fact gains wide adoption it could actually challenge real currency. And yes, that’s scary. Governments don’t like it when people use currency other than their own mainly because it completely skirts taxation no matter what the country of origin is.
It would be very difficult for me to explain how exactly Bitcoin works, but fortunately in the show below you can learn all about it. How it works, where coins are generated from, the freely available open source software that powers it and so on.
My personal take on Bitcoin:
My belief is that Bitcoin will ultimately suffer the same fate as physical money does now, even with the by-design rarity in place. Even though it’s a currency completely outside of any government involvement (for now), there will be those who will find ways to horde coins and ultimately ruin it for everyone else. Greed is one of the more peskier seven deadly sins; it happens wherever money is involved be it physical or virtual.
The discussion on Bitcoin starts at the 7:15 mark in the video below.
Like what you read?
If so, please join over 28,000 people who receive our exclusive weekly newsletter and computer tips, and get FREE COPIES of 5 eBooks we created, as our gift to you for subscribing. Just enter your name and email below:
I read about this earlier. It is a very interesting concept to me and I would love to see it work out. But yes, as you say there will be hoarders. And governmental intervention will make the currency more rare. We are getting closer to the idea of a global currency though.
http://www.youtube.com/watch?v=Um63OQz3bjo
Gives a simple explanation.
Our Government has been making virtual money for years. They are in bed with the Federal Reserve with their non origin Treasury note. This system and bitcoin does not work, it only enslaves.