The digital future of money
OKMULGEE, Oklahoma— Since the internet became available to the public in 1991, countless changes and innovations in the tech sector have been introduced, tested and expounded upon. But none seem to have had the potential to make such a large-scale impact since the internet itself as bitcoin.
Surely, if you have ever engaged in online commerce whether buying or selling you have heard of bitcoin. If not, you will because now traditional brick and mortar businesses are beginning to accept BC as payment. But, what exactly is it?
Unless you are a computer geek interested in data management, open source software or cryptography, the technical side of bitcoin will make your eyes glaze over in boredom and disinterest.
Put simply bitcoin is “digital money.”
It is, however, quite different than what we traditionally think of as money in that it does not exist in physical form and it is not controlled by any centralized entity.
Meaning there are not tangible coins or notes to be exchanged, it only exists online and there is no overseeing bank or country that issues, backs or regulates it.
The idea for BC was outlined in a document, now referred to as its ‘whitepaper’ that was distributed via the web to various public sites on Halloween 2008.
The whitepaper is attributed to a person (or group) known as Satoshi Nakamoto, whose identity is still a mystery, and as with any mystery left to the online community, conspiracy theories abound.
Regardless of whether or not the future holds the unveiling of the mysterious Nakamoto or even the eventual rise or fall of cryptocurrency, what is certain is the impact the blockchain technology it introduced is already having on the status quo.
The blockchain is the concept underlying bitcoins’ trustworthiness, and it is already being implemented in other industries like real estate, banking and health care to name a few.
The blockchain is, essentially, a collection of ongoing distributed ledger entries grouped in encrypted “blocks” which are validated by the collective network of all computers using that “database…”
I can picture the boredom in your eyes, so let’s just say that the group of users takes the place of a central body to record all transactions.
Potentially, the biggest disruption of blockchain technology to industries is the canceling out of “middlemen” such as banks, lawyers and title companies.
For example, when you use your credit/debit card the transaction seemingly is instantaneous, but actually the transaction takes much longer to reconcile due to the transaction going through the two banks (the buyers’ and the vendors’).
This technology could cut the banks’ role out of the process, if nothing else it would significantly reduce their level of participation and the built-in costs arising from their involvement.
Many experts agree that bitcoin, or another cryptocurrency becoming a standalone currency is decades away but a real possibility.
The most vocal opponents are quick to label the bitcoin phenomenon as a market “bubble.” Comparisons to the dot-com and housing bubbles, in which prices were skyrocketing with seemingly no end in site, help give credence to this claim.
Just six months ago bitcoins were valued at $2,800, peaking at just under $20,000 in December and now at the writing of this article they are holding around $15,000.
There is a story of a man paying 10,000 bitcoins for two pizzas in the outset of this crypto cash experiment (2009-2010) when they were valued at less than a penny. If that transaction were to take place today those pizzas would be worth over $150,000,000.
The success of bitcoin has spawned over a thousand other cryptocurrencies, each with their own niche and hoping to follow bitcoins rocket trail skyward.
Regardless of how this bitcoin roller-coaster ride ends, one thing is certain, BC has changed the game, and it may no longer accept cash.