>> Chelsea Leonard
Some of our parents still have not accepted the debit card. As part of the millennial generation, we’ve been open to online transactions sanctioned by banks that have been regulated by the government for years.
Now, an alternative to using banks and credit cards has been presented. Bitcoin is a network that enables the use of digital money.
It uses a coding system to create virtual coins that are buyable and spendable. This coding system is open-source, and written by other Bitcoin users called miners. When a transaction occurs, a record of the code is placed in a block, which is then locked into a block chain to be reviewed by miners. If the miners find the code to be secure (previously unused), the transaction will go through in approximately 10 minutes. The record of this code is then available to the public. According to Bitcoin’s website, “Bitcoin is not anonymous and cannot offer the same level of privacy as cash. The use of Bitcoin leaves extensive public records.” These extensive public records are a way for Bitcoin to stay reliable to themselves and other users.
Buying and selling bitcoins is similarly not easy, though they describe it on their website as easier than using a debit card. The use of unfamiliar vocabulary makes Bitcoin difficult to follow for some, without extensively researching each term individually.
While there is nothing wrong with intensively researching a topic, creating a system that is unapproachable to the general public severely limits who can benefit from Bitcoin.
Bitcoin claims to “play a role in reducing poverty in many countries by cutting high transaction fees on workers’ salary” with “no central authority or middlemen,” according to their website. However, it leaves the question, what is the role of the miners, if not one of a “middle man,” in ensuring the success of trade between buyer and seller?
“The network remains secure even if not all Bitcoin miners can be trusted,” said Bitcoin.org, because of the open source coding. The idea of a nongovernment-regulated banking system may be one favored by those who do not want to follow currency exchange laws, but we must look logically at the reality of what Bitcoin offers. “Essentially, it seems like a scheme,” said Nathaniel Fox, senior Spanish and English major.
“You give me real money, and I give you monopoly money.” This is virtual money. There are no tangible products involved in Bitcoin.
It is not backed by gold, but merely a system of numbers available for public consumption. If it is not backed by solid resources, one must assume the value of Bitcoin can and will fluctuate dramatically.”
There are only a limited number of Bitcoins in circulation and new bitcoins are created at a predictable and decreasing rate, which means that demand must follow this level of inflation to keep the price stable,” according to Bitcoin.org. “It’s a gamble,” said Carlos Chaves, a senior corporate communications major. Who can afford to take this risk?
Perhaps the affluent leaders with motives other than promoting their own countries economic well being would be interested in finding new ways to cheat citizens out of economic growth.
They can exploit the economy by using excess funds with no potential benefit to their own currency. Not many others would be able to even consider something still so raw and unproven as converting their hard-earned money into a virtual coin. “Bitcoin wouldn’t help any of us as daily consumers,” Fox said. Those who are inherently wealthy could prosper from virtual coins.
“As an entrepreneur, the opportunity of money transfers are endless. So I would understand how it could be something that governments of the world are looking into and trying to control,” Chaves said on the threat of Bitcoin to foreign governments.
However, it raises the question: Is it ethical, “It is money laundering, but its legal because it’s a form of currency,” Chaves said. While technology is advancing faster than we can imagine, it seems improbable something as arbitrary as a simulated coin could actually become a worthwhile investment for the everyday person. TAS