Revisiting BitCoin: Are We Ready For A Virtual Currency?

BitCoin has been dogged with controversy.
Traditional currencies weren’t created with the online world in mind, and that can sometimes be very evident. Using debit or credit cards online is a clumsy process where various data fields have to be laboriously filled out, followed by multiple layers of security questions. Remembering your online security password for each different card adds further complexity, though it’s arguably safer than PayPal, perhaps the most cloned, phished and attacked internet service ever seen.
It was only a matter of time before someone created a digital currency more suited to the online world, although its creation remains shrouded in mystery. In 2009, bitcoin arrived as an electronic currency that can be traded online, but its originator has never been formally identified. Bitcoin’s ascent into the public consciousness has been much slower than industry observers first predicted, despite growing evidence that bitcoin may represent a genuine option for making online payments in future.
Unlike cash, every time you pay for something with bitcoin you create a digital paper trail that is recorded in a public online ledger known as the blockchain. Transactions are noted in this blockchain as an electronic receipt, although the identity of individual users remains anonymous. Bitcoin mirrors real-world currencies in that transactions are protected with cryptographic keys, though admittedly that’s where the similarities end…
Because the origins of bitcoin are shrouded in mystery it’s difficult to make definitive statements about it. Rumours suggest there will only ever be 21 million bitcoins in existence, though each coin can be broken down into a hundred million sub-components. Nor is it possible to attach a definitive value to a bitcoin since its value has changed hugely in short spaces of time; speculators can buy and sell it like stocks and shares. There’s currently no legal guidance in the UK as to whether bitcoin transactions can be fraudulent, and the anonymity of bitcoin usage has made this a favoured currency among the criminal classes.
Nevertheless, there are a number of advantages to using bitcoin:

• There are no exchange rates involved in using bitcoin when travelling abroad.
• The absence of conversion costs makes it ideal for using on foreign websites.
• Although the value of bitcoin can vary considerably, it’s immune to country-specific issues like hyperinflation or currency devaluation.
• Bitcoin is currently the only way to make anonymous purchases online.
• Unlike credit (and sometimes even debit) card transactions, bitcoin purchases incur no processing fees or surcharges.
• Currency can only be spent when it’s already been acquired; it’s very hard to get into debt with bitcoin. Peer-to-peer lending does exist, but strict conditions apply.
• Bitcoin can be earned for contributing to assisting with the blockchain, which effectively means payment-processing work can become a part-time home-based job.

If you’re unsure how to acquire a bitcoin (or a hundred millionth, known as a Satoshi after the currency’s alleged creator), there are ATMs across the UK where sterling can be converted. Bitcoin can also be purchased online or exchanged for products or services. Funds are stored in an online wallet, complete with digital credentials confirming the value of bitcoin stored, although it’s presently unclear how much protection this method of storage offers against hackers. Exponents argue that the blockchain would identify any misappropriation of currency from one person to another, although the anonymity of both parties would make it hard to prove theft or fraud had taken place, as opposed to a legitimate transaction.
Bitcoin undoubtedly needs a good PR agent to persuade the public that it’s not just the last resort of criminals and deep web exponents. Trading on Wall Street would help, as would take-up outwith the main western economies. Nonetheless, the first global digital currency has a lot to offer, and its popularity is likely to gradually increase as more companies and retailers begin accepting it as a payment method.