This article talks about the changing landscape in which virtual currency is beginning to make a dent. Primarily the article focuses on the BitCoin that is described as an online currency currently traded on an open market and is completely decentralized. The total value of all the BitCoins in circulation is about $2 billion. The currency was first developed by a hacker by the name of Nakamoto. With the currency being completely digital, it is conceived then to be able to "hack" yourself to digital gold. Monetary policy is then not dictated by decisions from a board but rather dictated by algorithms set up by the computers that govern the currency. However, despite the shady inception of the currency, several companies have begin accepting this currency such as Reddit and WordPress. The article summarizes by stating the emergence of less secretive currencies stemming from this trend to a digital currency. The competition of these currencies has caused recent and rapid growth in these money market bubbles that will surely collapse with the introduction of a more stable, digital currency that is in the works (OpenCoin). Either way, this is news for those interested in the rapidly shifting environment towards a potentially cashless society.
http://www.economist.com/news/finance-and-economics/21576149-even-if-it-crashes-bitcoin-may-make-dent-financial-world-mining-digital
1 comment:
This story just goes to show that anything can have value if people deem it to be worthy. This could either be a wonderfully simple and convenient new method of payment, or it could prove to cause another bubble in our economy. If some people give high value to something which has no real value, there is sure to be a crash. Though it is technology and not actually a physical thing, and is instead being used to pay for other things, this reminds me of the crash after the Beanie Baby Bubble. People overvalued something, and when they finally realized that they had, it was already too late.
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