Bitcoin: The Online Currency

As we enter the new age of technology, we open new avenues for possibility and success. One of these avenues is Bitcoin, the first ever online cryptocurrency. It has been receiving a lot of attention recently, enough attention that the Senate is holding a meeting this Monday to discuss the legality, and proper use of the currency. I was first introduced to Bitcoin about a year and half ago; a friend of mine, let's call him Greg (for privacy) explained to me the deep and intricate hidden website, Silk Road. The Silk Road was an encrypted website, that sold a variety of drugs, guns, forged documents, and other popular black market items through an anonymous browser called Tor. Instead of traveling half way across the world to get the items, you could simply sit down at your computer and order what you wanted through the internet. Your "package" would then be inconspicuously delivered via FedEx or UPS, and at your doorstep within the week. I know what you are thinking, this is ludicrous, dangerous, stupid and down right illegal. I can tell you that I have never personally ordered anything off of the website, but I know people who have. Not once have they been caught, and not once have they gotten in any sort of trouble. And it astounds me that a black market so sophisticated, and fascinating can exist right under the noses of the very people who try and stop it.


Around the time I found out about Bitcoin, Greg told me the unit price was only $32 a coin. Can you guess what the price is today? Just one Bitcoin has a weighted average of $460 on the Toyko-based Mt. Gox exchange. That means if you bought 10 Bitcoin for $32 back in 2012 (32 * 10 = $320), and sold them at todays value ($4,600), you would have made a profit of over $4,200. Make it fifty Bitcoin, and you would have had a profit of over $21,000. And now that the Silk Road has been officially shutdown by the government, the Senate can focus on the legal options for Bitcoin use. As Nick Wingfield of the New York Times puts it, "Instead of using Bitcoin to buy illegal guns in the recesses of the web, ordinary consumers will use it to buy legal goods from legal retailers — and as easily as they now swipe their credit cards or exchange paper bills" (Wingfield). Jim Breyer, a Silicon Valley venture capitalist who has invested over 9 million dollars into start up companies for making Bitcoin available for legal retail use, says he is "confident you will see major worldwide retailers adopting systems built on Bitcoin” (Breyer). Bitcoin advocates are also excited about the currency's future possibility of lowering payment processing costs for credit cards. Without a third party company, like Visa or Mastercard, you don't need to have any extra costs. Without a website like the Silk Road, I believe Bitcoin would not be as widely known as it is today. Now that wealthy investors, such as Jim Breyer, have seen what kind of profit the currency can bring in, they are flooding to the gates in anticipation of the economic boom Bitcoin will provide. Or not. Only time will tell.

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What are your thoughts on Bitcoin, and it's possible currency use for online retail shopping? Do you think the currency is just a big hoax? Or do you actually think there might be a future for Bitcoin? Please leave your thoughts and comments below!