Would You Ever Use BitCoin?

If you haven’t heard of Bitcoin, you’re not alone.  It’s an online currency that was created in 2009 by Satoshi Nakomoto (most likely not their real name according to most people).  The idea was to create a decentralized currency – which means that it has no central form of control or ability to be manipulated.  The U.S. has a centralized currency maintained by the Federal Reserve.  The Fed can add or subtract the money within the supply, hence the phrase ‘centralized control.’ With the Bitcoin, the currency is created at a steady, predetermined rate called ‘mining.’  The mining of Bitcoin is to emulate a form of mineral that has a limited supply.  The mining of Bitcoin is calculated to end in 2030 with about 21 million Bitcoins  in circulation.  (Some think that the Bitcoin will be well accepted by those who support a gold standard.  See our article Is Gold A Good Investment for a closer look at investing in a commodity.)

Interesting TidBits…

  • In theory, inflation should not exist with Bitcoins.  This is because the volume of coins cannot be manipulated and created, thus lowering the purchasing power of outstanding Bitcoins.
  • Reimbursing someone in Bitcoins for a product or service is considered to be bartering.  This will certainly be interesting to watch as governments try to enforce taxes somehow on transactions through Bitcoins.
  • No central bank controls the Bitcoin.  The network is supported through open source communities.
  • The Bitcoin has recently seen a severe drop in value, not surprising, as it is known to fluctuate quite a bit on a daily basis.

Want my 2 Bitcoins?

I don’t know if I will be using the Bitcoin any time soon.  I’m not convinced of its security features and really don’t have a good understanding how it works.  The purpose of this article wasn’t to explain in detail how the Bitcoin works…see this article from The Economist for a better understanding.)

Have you ever heard of the Bitcoin?  Would you ever use something like this?

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  • http://www.beatingdebt.org/articles/education/an-economic-model-without-using-debt Eric

    Yes, I would use BitCoins. I actually have .7 of one. That .7 used to be worth nothing and now it is worth a lot. Is that a bubble? Anyway, I would support most alternative currencies/economic systems. We need to think deeper about how to grow our economy without using our current debt-based economic standards. This might be one solution.

    Keep up the good work,

    Eric

  • http://www.beatingdebt.org/articles/education/an-economic-model-without-using-debt Eric

    Yes, I would use BitCoins. I actually have .7 of one. That .7 used to be worth nothing and now it is worth a lot. Is that a bubble? Anyway, I would support most alternative currencies/economic systems. We need to think deeper about how to grow our economy without using our current debt-based economic standards. This might be one solution.

    Keep up the good work,

    Eric

  • http://www.patheos.com/blogs/faithandfinance Tim

    Thanks for your thoughts. The idea of creating a new currency is very interesting..so I’ll be watching to see where this goes for sure.

  • http://www.patheos.com/blogs/faithandfinance Tim

    Thanks for your thoughts. The idea of creating a new currency is very interesting..so I’ll be watching to see where this goes for sure.

  • http://www.fsyaonline.com Financial Success for Young Adults

    I first heard of the Bitcoin over at Invest it Wisely. To be honest, I don’t completely understand what would make everyone want to switch to this new currency. Also when the earlier comment says that a Bitcoin is worth more now than it was later, what is that being measured in? Gold is typically measured in dollars per ounce, meaning unless there is another currency to serve as a benchmark, this new currency would have no basis.

  • http://www.fsyaonline.com Financial Success for Young Adults

    I first heard of the Bitcoin over at Invest it Wisely. To be honest, I don’t completely understand what would make everyone want to switch to this new currency. Also when the earlier comment says that a Bitcoin is worth more now than it was later, what is that being measured in? Gold is typically measured in dollars per ounce, meaning unless there is another currency to serve as a benchmark, this new currency would have no basis.

  • decentralizedimproviser

    Sign the petition to repeal legal tender laws & allow for currencies like Bitcoin to compete with the Federal Reserve Note.

    https://wwws.whitehouse.gov/petitions/%21/petition/end-legal-tender-laws-allow-competing-currencies/0N8RLJ8K?utm_source=wh.gov&utm_medium=shorturl&utm_campaign=shorturl

  • decentralizedimproviser

    Sign the petition to repeal legal tender laws & allow for currencies like Bitcoin to compete with the Federal Reserve Note.

    https://wwws.whitehouse.gov/petitions/%21/petition/end-legal-tender-laws-allow-competing-currencies/0N8RLJ8K?utm_source=wh.gov&utm_medium=shorturl&utm_campaign=shorturl