BitCoin - the new currency?

Remember how PayPal revolutionized Internet payments? 

Imagine a similar system where no central bank or institution holds all the gold and there are no grubby little men investing your money as it moves between accounts. Welcome to Bitcoin (BTC), the Webs first peer-to-peer digital crypto currency that allows individuals to exchange money quickly, safely and anonymously over the Internet without the need for banks, cards, transfer fees or delays. 

How Does it Work? How Do I Get Some? Technically speaking Bitcoins are very safe – each coin is heavily encrypted and stored virtually across the network of machines running the Bitcoin software (That’s your cue to download & install it! Don’t worry…I’ll wait!). Once you have done this you can literally claim your FREE MONEY by visiting the Bitcoin Faucet and they will deposit your first Bitcoins into your account for free! (The amount they give away is dropping as the Bitcoin gains in strength, so hurry!) Take a deep breath! Feel empowered. Feels good doesn’t it? Great, now continue… 

 

Yale Law School’s Reuben Grinberg has written a fascinating paper assessing the legal implications of this new currency concluding that it has the “potential to be a significant player” and due to it’s digital nature “operates in a legal grey area” which would put it out of reach of the Federal government. Time magazine’s Techland suggested it was the online currency to challenge banks and governments. Bright Economic Outlook The Bitcoin has been rapidly (and steadily) increasing in value, doubling in January alone according to one source, with Forbes reporting that an estimated about $30,000 worth of Bitcoins are spent each day! (If this isn’t a stable currency, what is!?). 

You can mine (generate) bitcoins of your own, and the processing time your computer uses goes towards helping process other users’ online transactions and re-enforce the security of the system itself. In effect, the monetary value is measured against processing time, rather than gold. What Can I Buy? A number of sites accept Bitcoins for payment and this is rapidly growing. 

You can buy anything from food to gifts and this month a rival service to eBay was launched called Bidding Pond, run entirely on Bitcoins! In fact, lead developer Gavin Andresen has been invited to speak at the CIA headquarters next month suggesting that the U.S. government is interested in this development. 

Yes, the Bitcoin has gone from strength to strength. Each time I buy some, I look at the exchange rate and wish I’d bought more the previous time! They say necessity is the mother of invention, and this depression might just have helped a few geeks come up with a system that may actually replace money altogether. 

As the Bitcoin becomes more mainstream (and it will over the next six months!) it is likely to find friends amongst the open source shopping cart community (there are already plugins for Wordpress WP-eCommerce, Prestashop, Open Cart, ZenCart and numerous others) and will then replace Paypal (as it will be faster, free and not depend on a real-world bank or debit card). 

An extract from Roger Davies recent article on Bitcoins (link)