Bits About Bitcoin

I love this idea. I actually had a similar idea myself years ago, in concept only of course. When we think about all of our clumsy processes from internal combustion engines to flush toilets you wonder why something like Bitcoin hasn’t come along much sooner. But of course, we humans must be emotionally as well as physically ready for such change.

But about Bitcoin. Why allow a commercial institution like a bank to charge processing fees and exchange rates to use one’s own money? Why shouldn’t money be individualized like any other property we own? Why shouldn’t a currency gain value like a commodity from its desirability rather than from individual investment efforts?

But I’m getting ahead of myself.  A bit about Bitcoin. Bitcoin came along in 2009 from encryption written in code that allowed a virtual coin to be traced back to its origins. Everyone on the network has the means to account for every coin in an open ledger and each individual’s right to the coin in his/her wallet is recognized. Every participant in the network has a virtual wallet which is their key to access the Bitcoin.

In one sense this concept has been going on for years in the form of credit cards where no actual money changes hands but we assign the right to that money to another party by signing the card, and the bank verifies our claim that we have sufficient funds for the transaction (fees to the bank and credit card company). But with Bitcoin, a central bank is not needed because everyone on the network can see what’s in your wallet. And a Bitcoin does not depend upon account numbers and other data that can be stolen. The Bitcoin is an entity unto itself and once exchanged, that’s that.

With a growing dependence upon on-line marketing, Bitcoin, and similar currencies such as Litecoin and Peercoin, offer a simple solution for making purchases anywhere in the country and all around the world. I have long felt that currency is too clumsy and complex. Now, thanks to a bit of computer code, a simpler solution is at hand.

But will people buy into Bitcoin? Certainly not the financial institutions that make a living from fees for exchange and investment. Conceptually Bitcoin doesn’t offer such opportunities to these institutions. The currency will have to grow from grassroots efforts; of the people and for the people.