From Cash to Hash{14}


We are currently experiencing a peak of novelty. The world that knows the fundamentals of acquiring and exercising currency has now been faced with a revamped version of credit. This new version of credit is a product of ailments and potential that currently plagues old world bill and coin while shifting power and ownership to those entitled to their own funds. This paradigm shifting object is the Bitcoin.

When tasked with creating a system that allows for a fluid and flexible exchange of goods or services, it does not present itself with a quick fix solution. One must consider the action of exchange and the vehicle that represents value. We have seen at infancy the practice of commerce and trade. The archaic system of bartering required an overhaul due to the nature of trade as modernity matured. Exchanging goods and services in earlier times required the raw product at trade to be present. Trading a cow for several chickens may have been a fair and agreeable exchange; however, a jade gem could have been worth the whole farm. The question becomes, how does the gem owner purchase just one cow? Thus, the inception of currency in denominated amounts.

Fast forward into our financially matured world, we are now faced with bottlenecks and deficiencies, more so, ones that extend far beyond the days of the cow, chickens and jade gems. Several variables are responsible for the status quo of our currency. These variables extend from cornerstones of technological advancements, rule of law, direction of academia and human nature itself. The dollar has undergone several revisions to cope with these variables such as counterfeit prevention, durability in exchange, serializing and renewal of the bill. This does not include the digitization of the dollar which has brought upon the bulk of shortcomings.

Our money today is entitled to us yet out of our possession. Our money is also very heavy to move in terms of fees due to banking policies and regulations. Furthermore, not only is our money out of our possession and fee heavy, it is now traceable which is caused by the digitization of commerce. Online banking and shopping, bank accounts, debit and credit cards, checks, money orders and digital wallets have made this the reality. We can no longer spend our money without incurring fees, footprints or change of possession. Consumers have now resorted to cash in hopes of maintaining the traits of what once was an open currency, but, we are experiencing a point of novelty.

Bitcoin, a form of digital currency consisting of openly sourced heavy encryption and protocol, has addressed the suffering system of currency and why cash does what it does best. This digital currency comes to us in a form of hash code expressed by the SHA-256 algorithm which states that transactions must be composed into blocks and block chains while maintaining every transaction that occurred previously. This amount of processing requires computational heavy lifting. Who or what does all this processing? The answer lies in the person who seeks to acquire Bitcoin. There are two ways to acquire this currency, one may purchase it or one may choose to mine it, and by mining it you are the one processing the blocks that make up the worth of Bitcoin (Bradbury, 2013).

Bitcoin has already found its way into our everyday markets. The popular online retail store, Overstock.com, has partnered with Coinbase.com to allow for the use of Bitcoin as a form of payment (Burns, 2014). This marks the turning point and direction that Bitcoin is taking to interface very closely with the consumer. This is not the only application of Bitcoin. Taiwan and Hong Kong have purchased Bitcoin ATMs manufactured by Robocoin. The ATM manufacturer integrates with Bitstamp, an online exchange that allows for the buying and selling of Bitcoin, to authorize and process credentials for the Robocoin ATMs (Biggs, 2014). Although this may come as great news for the digital currency, Bitcoin still stands as an investment avenue.

It is inevitable that a digital currency, if not Bitcoin, come into play as our world adopts and integrates the Internet. Many social and political problems have poisoned the currency of the old world and it is necessary that the essence of commerce be restored to those entitled to what is being dealt. To design such a system is once again no quick fix solution, and we are witnessing the birth itself in this very moment.

 

REFERENCES

Computer Fraud & Security, Volume 2013, Issue 11, November 2013, Pages 5-8 Danny Bradbury

Burns, M. (2014, January 9). Overstock.com Partners With Coinbase And Starts Accepting Bitcoins As Payment. TechCrunch. Retrieved January 19, 2014, from http://techcrunch.com/2014/01/09/overstock-com-partners-with-coinbase-and-starts-accepting-bitcoins-as-payment/

Biggs, J. (2014, January 2). Robocoin, The Bitcoin ATM, Is Heading To Hong Kong And Taiwan. TechCrunch. Retrieved January 21, 2014, from http://techcrunch.com/2014/01/02/robocoin-the-bitcoin-atm-is-heading-to-hong-kong-and-taiwan/