It started out as a theory, a paper penned by a mysterious entity under the pseudonym, Satoshi Nakamoto and posted in November 2008. In five short years it has rapidly expanded into the unofficial currency of the internet. This decentralized, digital currency has been thrust into the spotlight over the recent crackdown of the Silk Road, the internet’s notorious black marketplace where buying drugs, guns even people was as easy as shopping on Amazon. Boasting anonymous secure transactions, the value of BitCoin has skyrocketed in the last year. There are countless BitCoin exchanges, digital wallets thatgive users the ability to trade goods and services for this currency that seems to have appeared out of thin air. Unregulated currency with no physical value or solid institution to back it has many worried.
There is a structure however, instead of relying on a central authority to issue and validate transactions, a virtual public ledger called a “block chain” a complex set of math equations, puzzles that must be solved using special software. The network is kept going by users who sacrifice CPU to host the block chain, while at the same time “mining” for new BitCoinsreleased at regular intervals that decrease as more users join the system to prevent inflation. Almost overnight BitCoin exchanges have popped up all over the world. A lack of faith in current economic situation along with the potential of becoming an overnight BitCoin Billionaire has driven more and more to buy and trade in this digital money. According to Mt. Gox, by far the largest BitCoin trading and exchange platform, BitCoins are exchanging at a rate of roughly $980 per. Back in May 2013,BitCoins were exchanging at a rate of $105 per.Businesses are accepting BitCoins and the first BitCoin ATM has been set up in Stockholm. As government agencies struggle to even define BitCoin, opportunity seekers both legitimate and illegitimate are rushing to make a fast buck. A world without centralized banking, the nameless, faceless voices emerging out of the digital age claim it’s possible. Not to be outdone, financial institutions are striking back. JP Morgan Chase just patented their own version of digital monetary exchange that would potentially compete directly with the infant currency. Rumors on have started to spread that banks are closing accounts set up for BitCoin exchange, although it might be a few week before that is verified. BitCoin’s future relies on its ability to change the way the world thinks about and uses money, and though the internet is surely ready, as for the rest of the world, we will just have to wait and see.