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Maybe you’ve seen them, maybe not, but bitcoins are becoming more and more popular. However, the question most people have are, “what the hell are they”?
Bitcoins are a decentralized virtual currency. This means that they neither exist in the physical world, nor do they have a central bank, such as the Federal Reserve.
They’re also a finite number in the world, with a limit of 21 million bitcoins, which is set to be reached by 2014.
In 2009, Bitcoin was developed by a programmer known as Satoshi Nakamoto, which is assumed to be an alias. Nothing is known about this “person” and they have not ever come forward or given any kind of interview.
Bitcoin has always been in the shadows and is considered to be a geek currency, but that all changed when bitcoin was brought to the mainstream… when the value of the currency skyrocketed.
One of the catalysts that shot bitcoin into stardom was the financial crisis in Cyprus, when it was announced that the government would take private saver’s cash out from under them in order to save the country and to allow the Eurozone bailout to move forward.
With the idea that governments could swoop in and take individual’s savings whenever they pleased, it made the case to have a currency free from government’s greedy hands, regulation and interference.
Bitcoins are very readily available and can be purchased at many places online, with the most popular site being coinbase.
With the thought of a currency meltdown, intrusive governments and privacy, bitcoins are most certainly an option.
The problem right now is that there aren’t many places online that will accept them, but that’s changing… as their popularity grows merchants are conforming.
Bitcoin might be the future of currencies, or at least for now they’re an alternative to the volatile nature of physical cash.
It will be interesting to see if this trend continues and if they become more widely accepted, then people might start flocking to them, especially with their finite supply.
And if this is the case, then two more interesting stories will come out of the Botcoins saga…
One being will they increase supply with demand, and will there be a subsequent price fluctuation like we saw before.
And the other, will governments try to regulate them as they become more prominent among consumers, merchants and even investors.
Only time will tell, but I’ll keep an eye on this ‘geek currency’ and keep you apprised of any developments.
Author: Tim Fields