Technology continues to simplify the digital era, and Bitcoin, an experimental and virtual form of money, seeks to make monetary transactions online easier and safer.
The official website for Bitcoin describes it as the “first decentralized digital currency.” Bitcoins are digital coins that use cryptography, which are secret codes, to control its creation. All transactions are sent through the Internet and kept in a “digital wallet.”
Bitcoins have open-source coding, which means anyone can review the source code. A source code is a text list of commands that a computer can assemble to then run a program, such as Bitcoin. With open-source coding, people can see that they are not being cheated by the program.
The official website claims to have several advantages, such as transactions that are done person-to-person with no third party with low fees, making Bitcoin ideal for small businesses and freelancers. Transactions can be done in any country, and there are services that will transfer Bitcoins into actual currency.
The official website also lists the possible concerns of having Bitcoins.
Since they are unpredictable, the value of Bitcoins unexpectedly increases and decreases. Bitcoin payments are irreversible, except by the person who receives the funds, and most jurisdictions still require taxes on Bitcoins, despite it not being an actual form of currency.
Hunter McIntyre, freshman business administration major, said he believes the cons outweigh the pros when it comes to using Bitcoins.
“It’s beneficial because it’s person-to-person,” McIntyre said. “When dealing with goods, it’s easier to make transactions (that way). On the other hand, I wouldn’t use Bitcoins because of the high fluctuations in value.”
Bitcoins can be given or received as a form of payment, and people can also generate new Bitcoins themselves.
One way to get more Bitcoins is with a free app called Bitcoin Minor, which requires the user to work out puzzles to generate blocks of coins. The amount of Bitcoins produced is automatically adjusted by the network so they are always created at predictable and limited rates.
Jonathan Bramlett, event support technician at Citizen’s Business Bank Arena in Ontario, expresses his view on the consistancy of Bitcoins dollar amount.
“They’re so unstable right now,” Bramlett said. “Just last week I looked up the exchange rate, which at the time was (a little over) $600 for one BTC. Now just a week later, it’s close to $900. If it can go up that quickly, it can dive that quickly too.”
A BTC is a number associated with a Bitcoin address. Bitcoins are not physical, and once someone loses their Bitcoins by throwing out old computers the Bitcoins were stored on, or forgetting to back them up, they cannot be recovered.
“You don’t look at a piece of scrapped memory and see millions of dollars,” Bramlett said. “The money is strictly digital.”
While it is not impossible to make actual money with Bitcoins, extensive research is recommended before investing in them.