By Donny Kendal
Bitcoin is a new electric currency that some believe has the ability to revolutionize the world’s monetary systems. Others say the online currency is simply a fad that will inevitably fail.
According to its website, the bitcoin is designed to assist in “instant peer to peer transactions” locally or across the world. The currency is completely private and is not subject to the control of central banks. Some economists believe the implications of this system are enormous.
Economist and executive editor of Laissez Faire Books, Jeffery Tucker, said in an interview with WHDT, “Bitcoin is very much a sound currency versus an unsound currency that government gives us.” He explains how there is a fixed amount of bitcoins, which creates a type of “gold standard without the downside.”
Bitcoin, started in 2009, has begun to gain traction in recent months. According to an article in Forbes, the value of the currency has risen past $1 billion. The value of a single bitcoin is currently hovering north of $100. With the sudden spike of value, some people are jumping into the market to gather bitcoins.
BBC news reports that a couple of developers have created a service that allows users to purchase pizza with bitcoins. Recently, Huffingtonpost published an article about a customer that sold a Porsche vehicle for 300 bitcoins.
With the hype surrounding the digital currency, some are focusing on the potential drawbacks of bitcoin.
“We’re seeing a lot of enthusiasm, greed and delusion,” said financial analyst Jesse Colombo in a CNN article. He continued to say that the there is no reason why the price has risen so quickly and that it will likely fall back to about $15 per coin.
Another potential flaw in the electronic currency was exposed last week. It was reported by BBC that a few of the bitcoin exchange websites were the subject of a hacking attack. The attack kept the websites offline for a period of time causing a drop in the value of the bitcoin.