With current economies fluctuating wildly as the banks see fit, people have come to realize that our modern monetary system might not be the optimal way of handling currency.
The ‘bitcoin’ is a recently discovered, fantastic solution to many problems facing our economy, and could revolutionize the way that trading takes place.
A person under the name of ‘Satoshi Nakamoto’ proposed the idea in paper in 2008. The design of the bitcoin system was such that it could be hacker-proof, not relying on “trusted” third parties such as banks, and a self-stabilizing economy.
It works using ‘mining’, rather like the exchange of gold. There is a limit to the total number of bitcoins that can ever exist (21 million). With this limit in place, the value of a bitcoin cannot fluctuate, meaning the bitcoin economy is a stable one.
Exchangers all over the world are already using bitcoins, and China’s largest search engine will accept it as currency. The approximate value of one bitcoin is 70 US dollars.
The system works using careful encrypting to ensure safe transactions. ‘Miners’ works by essentially creating a very difficult sum, where the bitcoin is the code identity of the solution. The recipients of a bitcoin must know the sum in order to access the bitcoin. This makes hacking very difficult.
All bitcoin transactions are done completely publically, making keeping track of any suspected fraudulence fantastically easy.
To ensure the safety of bitcoin users, all identities remain carefully hidden.
The reputation of the bitcoin has increased ever since the shut down of ‘Silk Road’. This was an online black market, which accepted bitcoins as payment, as the identity concealing was ideal for hidden transactions.
However, people have begun to realize the amazing potential for bitcoins. If the public starts to use more bitcoins, the central banks will no longer have control of the economy.
Could the end be in sight for dodgy bank deals and crazily fluctuating exchange rates?