Virtual currencies, or digital currencies if you prefer, have been in the news a lot lately. Not just the technology news channels either, as even the mainstream news channels have picked up on them. Bitcoin has driven this new and renewed interest in these currencies that are very different in nature to dollars, euros, renminbi, and all the other real-world currencies we use to buy and sell products and services on a daily basis.
Bitcoin has been around for several years now, but with its price climbing to monumental highs over the past few weeks, there has been a will to explore what it is, how it’s created (or mined), and what the future may hold for this new virtual currency and others that could emerge in its wake.
We asked you, What Does The Future Hold For Virtual Currencies Such As Bitcoin? The response was disappointing, and this time I’m blaming you, dear readers. The question was solid, the subject was interesting, the range of opinions open to be given was epic. So it must be you. And you must do better from now on. Or else!
The responses we did receive reveal vastly differing opinions on Bitcoin and virtual currencies as a whole. On one extreme are those who feel Bitcoin is the start of something big; something which may lead to society taking back control of monetary systems from governments and banks. On the other extreme are those who believe Bitcoin is flawed and nothing more than a fad due to die out as quickly as it has emerged from the underground.
I’ll be honest and admit that, even after reading about Bitcoin extensively (including our own guide to Bitcoin), I’m still confused about how it works. And that in itself doesn’t bode well for its long-term future. Everybody understands the nature of coins, notes, and cards, but the ordinary person in the street is never going to understand Bitcoin.
The future for virtual currencies is far from clear at this point. If the value of Bitcoin stabilizes then perhaps its importance will increase. In the meantime speculators and investors will take the gamble on virtual currencies being the next big thing. And their bank accounts will live or die by the volatility of the market.
Comment Of The Week
We had great input from the likes of Lisa Santika Onggrid, Abhishek Rai, and Dragonmouth, to name just a few. Comment Of The Week goes to Scott M, who, as well as the respect of myself and hopefully everybody reading this, receives 150 points to use for MakeUseOf Rewards.
This is the first time that an alternative currency that wasn’t backed by any government or precious metal attained a serious acceptance in the financial world. There have been teething pains caused by rampant speculation similar to what is seen in commodity markets and also a move of flight of paper money to it as investors grow disenchanted with traditional forms of fiat currency. A bubble has now been created and like precious metals of late people will begin to lock in their gains and take their profits. Whether bitcoins succeed or not doesn’t matter as others will take their place.
We have begun to see it accepted as as a valid form of payment and and alternative form of investment protection. It wasn’t so very long ago that FDR and the Federal Government called in all forms of gold currency coupled with what happened in Cyprus and the legislation allowing the same type of taxation of deposits written into Canada’s new banking laws,and people begin to acknowledge its usefulness. This bubble will burst but I think other alternative forms of currency will arise. This experiment has proved its possible that an electronic form of money and payment is able to be produced that will remain beyond the seizure of Governments to pay for their and large bankers greed and mistakes. These are just early days.
We like this comment because it offers a sensible, level-headed assessment of Bitcoin and the future virtual currencies it may help spawn. There’s no doubt there’s ill-feeling over the global economic meltdown that is still ongoing, and perhaps people will jump on board a legitimate alternative if one is placed in front of them.
We will be asking a new question tomorrow, so please join us then. We Ask You is a weekly column dedicated to finding out the opinions of MakeUseOf readers. We ask you a question and you tell us what you think. The question is open-ended and is usually open to debate. Some questions will be purely opinion-based, while others will see you sharing tips and advice, or advocating tools and apps for your fellow MakeUseOf readers. This column is nothing without your input, all of which is valued.
Image Credit: Zach Copley