Latin America takes to the Bitcoin 'virtual currency' in a big way
Bitcoin not only convenient, it provides fresh way of looking at international currency, trade
Invented by "Satoshi Nakamoto," believed to be the pseudonym for a fleet of computer programmers, the virtual form of currency known as the Bitcoin was invented in 2008. Circulating outside regular financial systems, the Bitcoin is catching on big time in Latin America. It's not entirely just due to fashion and convenience, as the Bitcoin offers a fresh new look at international economy.
The absence of a central issuing authority has caused volatility in the Bitcoin's value against the American dollar or British pound sterling. However, the trend is for the Bitcoin to appreciate against these currencies.
Bitcoin enthusiast Fernando Ulrich of the Instituto Ludwig von Mises in the southern Brazilian city of Porto Alegre, says that not only does the Bitcoin reduce transaction costs, it makes the user more knowledgeable about money -- without interference from national states and central banks.
Bitcoins, buy intention and design, is limited from the outset. Half the eventual total is already in circulation. The Bitcoin will continue to be issued at an ever slowing rate until the far-flung future world of 2140.
The absence of a central issuing authority has caused volatility in its value against the American dollar or British pound sterling. However, the trend is for the Bitcoin to appreciate against these currencies.
More importantly, the Bitcoin canít be counterfeited because of the cryptographic system used. Transactions are peer-to-peer. Bitcoins can be exchanged for dollars, euros or other currencies, or for goods and services.
Users connect to the decentralized network of users. Two unique linked keys are generated, which are needed to exchange with any other client. One key remains private on the userís computer; the other is public and allows transactions to occur.
The system includes a mechanism to verify and validate the transaction and a public ledger that records every operation, allowing the history of each and every Bitcoin to be traced.
Bitcoins were in heavy circulation in Brazil last year. At that time, Brazilian users were still novices, and curious about exactly how the currency worked.
"Most users buy and sell the currency to make money on its value. It's in the process of being adopted in Brazil, beginning with Sao Paulo," Rodrigo Batista, president of the Brazilian company Mercado Bitcoin says.
There are between 4,000 and 5,000 people interested in Bitcoins in Argentina, of whom 400 are using the system, while others are studying it. Turnover is low, but is said to be growing rapidly.
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