The Bitcoin Revolution: Brilliant or dangerous?

January 23, 2014 3:10 pm

The current acceptance of the online currency ‘bitcoin’ is divided. This week, it was declared that Cumbria University would allow payment for tuition fees in bitcoins. What makes this cyber-currency so attractive, yet also unsettling, for so many organisations? Is the bitcoin truly as good as it sounds, or could it be potentially dangerous?

The ‘bitcoin’ is a de-centralised digital currency. Originally experimental, but surprisingly popular amongst certain online companies, each user is given a ‘digital wallet’ in which to pay anyone; anywhere; immediately. The swiftness with which payment is received and released is an appealing notion for certain e-commerce businesses.

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However, to some, the bitcoin notion is not as phenomenal as first thought. Yesterday, it was announced that eBay, arguably the biggest e-commerce business in the UK, has its concerns about its security. From the 10th February, this particular online giant is to limit bitcoin transactions to the ‘classified ads only’ section of its website. For a company that prides itself on buyer-seller communication; the bitcoin could subvert the classic eBay exchange.

Bitcoin finance builds on the idea that money is no object. With no bank, no paperwork; simply payment, bitcoin operates with no central authority. Placing emphasis on ‘mining for money’, bitcoin permits buying and selling without any card details or account numbers. The reason for its increasing popularity is this: it takes advantage of online technology. Just like online communities revolutionised networking, bitcoin is set to revolutionise banking.

Leaning towards more of an ’email’ conversation than a financial deal, bitcoin banking removes the middle man and is said to revolutionise online payments. In a bitcoin transaction, anybody can view the HTML coding of individual deals. Granted, both parties taking part in this deal become anonymous across all online platforms on completion.

However, bitcoin creators also suggest that details can be discussed amongst and revealed to friends; sparking fears of a corrupt financial security. Just how secure can a decentralised, self-run form of finance really be?

The answer is simple. We don’t yet know. Bitcoin has been around since 2009, with stagnated growth. However, in 2014, recent trends have shown a rapid increase of bitcoin incorporation in businesses. The idea that you can ‘grow your own money tree’, and achieve freedom of finance is cleverly twinned with its online nature.

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In a digital age, and a 24/7 global internet culture, an online currency seems only fitting. Publishing veterans took a risk uploading news content online, contributing to a worldwide news network that our saturated brains couldn’t survive without. So why shouldn’t bitcoin provide people with a Mary-Poppins style wallet; one that replenishes itself?

The speed and cost with which the bitcoin operates is an inviting principle. Imagine doing your Christmas shopping without having to traipse your card details through endless virtual checkouts and baskets? What if you could click a virtual wallet on the screen, and automatically pay the seller? Bitcoin banking could revolutionise the way we pay for everything. However, it could make us more greedy than we already are.

Being the news-hungry, gossip-hunting carnivores that online communications have created, our global society is already emblematic of consumerism. Globalisation has made us more aware of the world, enabling faster, quicker trade across oceans.

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However, just last week in the UK, on ‘Benefit Street’ we watched how people on benefits survive on more money than the working public: begging the question, have banks, loans and financial institutions had their time? Is bitcoin the new face of finance or will it create more problems than the benefits it so potently envisions?

The idea of the bitcoin seems brilliant; at least on the surface. The list of companies accepting bitcoins is growing fast. Business analysts have spotlighted Cumbria University’s acceptance of the currency.  The ‘first public institution to accept an online currency’ is quite a title: will they set the record for other businesses, or is it a risky move?

Only time will tell. By 2015, we could all be buying presents for our loved ones with bitcoins. We might all be fat, unemployed, self-righteous and unknowingly exposed to fraud. Or, we could instead be advancing our financial brains, making the first steps into a financial community unlike anything we have seen before, fixing all the problems that previous methods have created.

It appears there are two faces to the bitcoin. Which one will you choose?

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