Unregulated? Bitcoin goes mainstream and why that's a good thing
Bitcoin is unregulated virtual currency with a life of its own.
Imagine a currency that isn't controlled by any central bank or government. Transactions that can be made without fees. Currency that can be used to buy anything, even a pizza. Welcome to the world of bitcoin.
Bitcoin is a virtual currency. You can't hold it in your hand, or carry it like cash. However, more and more transactions are occurring in the virtual realm, with banks exchanging dollars and every other kind of currency by virtual means. When you think about it, unless you still deal in cash, most of your transactions are virtual.
Bitcoin works exclusively in this virtual realm. It was introduced in 2009 as a "peer-to-peer" open-source virtual currency, which means that it's not controlled by any one entity, but rather by the users of the currency itself.
Bitcoins are created, mined, if you will, by users who install programs on their machines. These programs generate bitcoin that people can put into digital wallets. Wallets are just long strings of randomized characters, designed to be encrypted and virtually impossible to hack. Your string of characters can even be written down and carried in your wallet rather than saved online, however there are digital wallets online.
Bitcoins can be traded for cash via exchanges, and a market has developed with people exchanging the virtual currency across wider and wider networks-although these markets have thus far proven speculative and a bit risky. Still, trade in bitcoin thrives.
Until recently, bitcoin was the unofficial currency of the virtual black market, being used on "The Silk Road" a criminal website that sold a variety of illicit products paid for via bitcoin. That site was recently shut down by U.S. authorities, but is reportedly back online.
However, bitcoin is gaining mainstream acceptance. Online retailers are preparing to accept bitcoin transactions, banks are opening up to the virtual currency, and even Virgin Galactic has announced that it would accept bitcoin.
Locally, bitcoins can be exchanged with retailers and other people. In some places, you can even order a pizza with the currency. New mobile apps allow you to scan QR codes at restaurants and retail stores.
Lending to the currency's preference is its relative anonymity. Unlike as credit card transaction, bitcoin signatures are encrypted, so you do not attach your name to a transaction, just your encrypted digital signature. Although it is possible to decrypt a digital signature to reveal a name, this requires special software and exhaustive work, so for now, at least, the transactions are quite anonymous.
There are no fees attached to transactions either. It costs nothing extra to deal with someone overseas.
Finally, bitcoin has scarcity built into its very being, ensuring that bitcoins act like virtual gold. Bitcoin is capped by design at 21 million coins. The coins are created at an ever-decreasing rate with production halving at regular intervals. Eventually, production will stop at 21 million bitcoin, a milestone that will be reached in 2140.
This makes bitcoin scarce, and preserves their value. Fortunately, bitcoin can be broken into very small units, which ensures the currency can be used virtually forever, with prices eventually dropping as people accept smaller and smaller payments in bitcoin. It is regarded as a genuine deflationary currency.
Right now, bitcoins are popular and in demand. Anything can be used as currency as long as others believe it has value. The dollars in your wallet are just strips of paper blended with cloth, but they have perceived value which makes them exchangeable for goods and services. Bitcoin is the same, and with mainstream adoption now taking off, the virtual currency looks like it's here to stay.
Even better, there are no central governments or banks which can regulate or even stop bitcoin. Fortunately, even the banks are endorsing bitcoin to the federal government and did so last month during hearings on the subject.
In a time of increasing government control and regulation of everything, even freedom of religion, the popularization of bitcoin is refreshing.
So get ready-there's a new currency on the market and you may find you like it better than what you have in your wallet now.
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Respect for Women: That all cultures may respect the rights and dignity of women.
Vocations: That many young people may accept the Lordís invitation to consecrate their lives to proclaiming the Gospel.
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