So basically I just came into the loop on a new market that has just recently emerged.
It’s called BITCOIN.
What’s that? You might say. Well picture this: you are an international traveler and often have to switch currencies and have to go through different banks and it’s just a hassle! There are service charges and not to mention the value of your money keeps fluctuating. Why oh why isn’t there just a uniform currency!?
Bitcoin is a digital currency that allows instant transactions, worldwide payments and low or zero processing fees. (Honestly, I just learned about it today, but doing research, this is what I have determined)
Essentially the kinks are worked out so that it is impossible to double spend. In order to avoid the whole inflation problem, there is a limit of Bitcoins. In this decentralized monetary system of controlled supply, the number of Bitcoins in existence will never exceed 21 million. Currently the total value of all bitcoins in circulation is over $300 million (according to http://bitcoin.org/en/about).
With the online and digital nature of these transactions, cyber security is naturally a concern.
On an even more critical angle, online forums are very polarized by this new advancement. They suggest that this could be the end of money and reduced fiscal control could be a huge potential problem. This talk of the “destruction of the modern banking system” is still just hype I think.
Although, many forums underline the many flaws to this system, I believe that the task of taking the entire banking system WILL be inevitably flawed for a while until all the solutions can be worked out.
Now, my friend who introduced this concept to me mentioned that in order for Bitcoin to be successful “it must be accepted.” And that makes perfect sense to me. If people don’t jump on the bandwagon and start using Bitcoin, then it will just taper off and be just a sketchy way to transfer money or worse, Bitcoin could lose all value.
However, due to the convenient nature of this ‘invention’- it DOES have the potential to be a big thing. Going abroad this summer, I think it would be so convenient to have some universal currency. Whether Bitcoin succeeds or fails, I think it’s a promising idea.