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Will BitCoin Ruin Us or Make Us Rich?
There are days when you realize that the future, once distant and glorious, pregnant with potentials has arrived a long time ago – and is here to stay, cramming its utter weirdness right down the throat of our present on a consistent basis.
This is how I feel when I think about BitCoin.
Yes, BitCoin: The virtual cryptocurrency that you can “virtually” generate out of thin air if you have the right hardware.
BitCoin is an open-source currency which doesn’t need any banks and is “virtually” untraceable.
Therefore, despite its somewhat evanescent nature it has huge disruptive potential and has already been called the “most dangerous open-source project”, ever. (Think of what Wikipedia did to the encyclopedia!)
We’re talking about a project which could change the way we think about money or currencies for good!
How does it Work?
The currency units, called Bitcoins are stored on your harddrive much in the same way you’d store pennies in your wallet. Through encrypted transactions you can send and receive bitcoins directly, without the aid of a middleman such as a bank.
The currency is technically limited to a total of 21 million coins at the moment. Six millions are currently available. Until 2014 the number of total coins is planned to be doubled.
The weirdest part about Bitcoin is that you can “mine money” by running your computer.
But it’s not as easy as just leaving your MacBook on through the night and getting rich before you can say Jackpot. No, a household computer would take up to 5 years (!) to just produce one coin.
The mining of bitcoins is a serious profession that takes a lot of time, computer skills and – electricity.
In fact, it can use up so much juice that the police might knock on your door because you’re generating just as much heat as the cannabis farmer next door, as has happened multiple times in Canada.
If you want to see how a bitcoin miner’s lair looks like, I highly recommend this little videoclip of a professional miner who lets us take a peek into the crazy business of generating those coins.
Fears and Hopes
Many people fear that governments will eventually shut down and persecute the BitCoin model, because it undermines (get it??) the way their economies work. It can best be compared to how Wikileaks defaced global diplomacy as we knew it.
People need banks. Banks need people’s money. Governments are driven by banks.
Make banks unnecessary and you could see some radical changes to our societal structure.
Whatever your opinion about it, Facebook and Twitter changed the way activists organize protests. Wikileaks changed the way we think about political power. It’s not entirely unlikely that Bitcoin (or a similar project) will forever change the way we think about transactions of value.
The somewhat scary thing about all of this is that it’s completely uncontrollable. In the same way random activism organized through Social Media and random leaking of information makes organizing governments (as we knew it) a very difficult ordeal, we don’t really know what will happen if the anarchic BitCoin is unleashed onto the system.
On the other hand, it is about time that we change the way we think about money.
The fact that you’re paying with euros or dollars or whatever is completely arbitrary. Heck, you could be slotting seashells into the vending machine, for that matter.
Despite all of the complex ramfications, currencies are just symbols for value. Symbols, one might argue, that have become rather over-taxed with inflated claims and have been showing great signs of discrepancies regarding the actual value they are supposed to represent.
So it’s only fair to ask: What would happen if we had a global uncontrollable currency like BitCoin which anyone accepts?
Ice-cream and jetpacks for everyone?
Or an anarchic economy that is ruled by survival of the geekiest and miner’s conglomerates stealing and trading in dirty pieces of hardware for a slice of bread?
The truth is probably somewhere inbetween. But we’re bound to find out…
img: CC by Dom Dada