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Bit Coins: The New “Superior” Currency?

April 1, 2013

In class one day, bitcoins came up as a topic of discussion in class. Personally I had no idea what these were, but as the discussion continued, it became a topic of interest to me seeing as how internet savvy our generation has become.

Bit coins are the new virtual currency. In order to acquire this currency, customers download a “wallet” in order to hold all of your currency in one place. Downloading these wallets is free. Next, one either buys (with a common currency such as USD) bit coins in which are stored in these wallets. The interesting part comes once you have the coins themselves. By using these bit coins, all of your purchases and transactions using these coins are now anonymous. No one knows who is ordering the items online seeing as these bit coins allows for complete privacy for all buyers. Cool is it not?

When looking at it from the outside, it seems like it is much more of a hassle than it is a convenience. For example, online purchases are easy enough through services like PayPal. Sure you have to enter your credit card information into the computer, but any time you swipe your card, the handler is able to bring up any information about you on the spot. It also makes people “assume” that if you use bit coins, the transactions you are making are probably illegal in some way. I’ll let you be creative when thinking of those possible “illegal” purchases. Another way that these coins are coming into use is to secure ones money. People in foreign countries who are experiencing banking issues no longer need to store massive amounts of gold in their houses. Instead, they just need to convert their money into bit coins and make sure they have access to their online wallet.

When looking at it from the real life aspect, bit coins could possibly help prevent identify thief through the computer. The fewer amounts of times you have to enter any of your personal information into the computer means a lesser chance of getting any of your information or your identity swiped right before your eyes. In that sense, being able to stay anonymous with your purchases is very applicable in real life today.

So…what can you buy with these bit coins? It looks like anything that can be shipped could be purchased with bit coins nowadays. As seen in the attached article, bit coins is one of the top up and coming currencies in the world right now, surpassing over 20 known and active currencies throughout the world. It’s only a matter of time for this form of spending to be in full swing and the new way to shop online.

The only real world situation at this brings into play is the affects it could be having on gold. Gold is the basis of our currency, and is a vital asset for investors seeing as predominating, it continually rises. With the rise of bit coins, gold is no longer an investors’ point of interest. Seeing as gold needs to be stored is a secure area, bit coins just have to be stored in your online wallet which could be password protected. Gold is more of a liability when sitting next to bit coins which is now causing a threat to the American market.

Bit coins have their pros and cons, but only time will tell if which direction this virtual currency will go.

-Mike

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One Comment
  1. It is definitely a neat idea to have these bit coins for online purchasing, especially if you’re purchasing from a site where you are worried about your credit card information being stolen. However, I think when I hear about this, I’m more like the person you mentioned who assumes something illegal is taking place. These may be rapidly growing but the first thought that comes to my mind when I hear about people using these is that they’re trying to cover up a crime.

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