I’ve been hearing a lot lately about something called “bitcoin.” I’m almost embarrassed to acknowledge that I really don’t understand bitcoins. A few years ago, I tried to keep up with most technical topics. Part of the reason, was because it was almost necessary for my job, but technology has always been of interest to me. It still is, but I guess not enough for me to make the effort to keep up with it. Technological advances are spewing up at an alarming pace and I’m slowing down at almost the same alarming pace.
Anyhow, my extensive research uncovered the fact that in 2009 some guy (person) created a new currency called Bitcoin. I don’t think anyone really knows who the person is because he/she used an alias — Satoshi Nakamoto.
Bitcoins can supposedly be used to book hotels on sites like Expedia and shop at online sites like Overstock. All transactions are made directly between the buyer and seller — no banks, or credit card companies are involved.
People (or businesses) can send bitcoins to each other using mobile apps on their phones or via their computers. I think this is kind of like sending cash digitally. Bitcoins are stored in a digital wallet — that wallet can be on your phone/computer or in the “cloud.”
I’m not sure how this works, but apparently each bitcoin transaction is recorded in a public log — only using a “wallet ID.” Names of buyers and sellers are never revealed. Maybe I’m missing something here, but this seems like a haven for terrorists, drug dealers or other unscrupulous activities.
A lot remains unclear to me, but the one that thing that is most unclear is… how do you get bitcoins? It seems that people compete to “mine” bitcoins using computers to solve complex math puzzles — that’s how they are created. Marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using “regular” currency.
After all my extensive research, I still don’t “get” the bitcoin phenomenon. But according to the news the past few weeks, it seems that a lot of people believe they can get rich by trading it — the price of bitcoin has skyrocketed — and — plummeted in the last week or so.
Maybe I’m just getting old, but I kind of like my credit cards… and I can even still deal with cash.
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