The first thing we think about whenever we want to buy something is money. Theoretically speaking, money itself has no value; it’s what money can buy that motivates us everyday to work and strive to earn more of it. It has served as the standard medium of trade since the demise of the barter system during the early days of civilization. It is also fair to assume that there is nothing in the world that money cannot buy, of course, with exception for a handful of intangible objects. You could, however, use any one of these items as an alternative to money, so long as all parties involved agree to the circumstances. And many people have already agreed to use a new medium of trade that may actually compete with modern-day currency exchange.
What is a Bitcoin?
According to Forbes analyst Andy Greenberg, “Bitcoin is a grassroots non-profit project that seeks to fashion a new currency out of little more than cryptography, networking and open-source software.” It is an entirely new form of purchasing power, void of most government-based stipulations and factors, such as large-scale counterfeit scams, interest and inflation. Just imagine—international financial representation that can be stored and monitored on your own computer is definitely a concept with enough steam to combat Illuminati in the race towards the future.
Value and Overall Worth
The value of a Bitcoin is determined in part by the fundamental economic principle of scarcity, controlled by a highly-advanced cryptographic lottery, or “mining” system. Computer scientists designed “the machines in Bitcoin's mining network, now in the thousands, to compute an encryption function called a 'hash' on a set of random numbers, and coins are awarded every ten minutes to whichever miner happens to compute a number below a certain threshold (Greenberg, 2011).”
Real World Impact
There are currently close to six million Bitcoins in circulation, and it is expected to double over the next three years as real world applications, including Android apps and point-of-sale support, acquire market acceptance. No more than 21 million Bitcoins will ever be available for trade in order to maintain a strict level of explicitness.
The only other principle behind the value of a trading medium is its relevancy. “About $30,000 worth of Bitcoins change hands every day in electronic transactions spent on Web-hosting, electronics, dog sweaters and alpaca socks (Greenberg, 2011).” Illegal drug trafficking may also serve as a major contributor within the anonymous trading network, which was “designed by Satoshi Nakamoto, a mysterious, privacy-obsessed figure who first described the currency's specs in a series of posts on a cryptography e-mail list in late 2008 (Greenberg, 2011).”
Due to its growing popularity among users, one Bitcoin is now worth almost a dollar! However, it varies daily from speculation and lack of consistency. But the road bumps in its birthing stage will not deter free market participation forever. It just might be the honest answer to the question of financial freedom that we have all been waiting for.
Sources
- Greenberg, Andy. "Crypto Currency - Forbes.com." Information for the World's Business Leaders - Forbes.com. Forbes, 20 Apr. 2011. Web. 04 May 2011. .
Hugh Saddler - Hugh M. Saddler (born September 9, 1988) is an American recording artist and semi-professional digital freelance writer.
