Bitcoin: A Crash Course

Bitcoin LogoThe interest in cryptocurrency is growing by both governments and individuals all over the world. Some governments fear a decentralized, unfettered currency, other governments (specifically China and Russia) are presently embracing and actively promoting the technology, though probably more to poke a finger in the eye of The United States than anything else. It’s better for no one to control it rather than your enemy, right?

In my opinion, two things are poised to change the world as we know it: 3D printing and a secure, dependable cryptocurrency. These two technologies will empower the global population more than any single events in history, allowing us to produce goods on demand and disallowing governments and banks from continuing to use our money as global economic weapons. These changes are well beyond significant and will have radical and far-reaching implications for our collective and individual future. (Not familiar with 3D printing technology? LISTEN to The Vancouver Sun’s Gillian Shaw discuss the technology with John Biehler, a Vancouver based 3D printer builder.)

But this post is about cryptocurrency, specifically Bitcoin. There are over a hundred different types of cryptocurrency available at this moment in time but Bitcoin has risen to the top since it’s inception in August of 2009. It’s ability to avoid ‘double-spending’ (an important factor), it’s fungibility (one part or quantity may be replaced by another equal part or quantity in the satisfaction of an obligation) and it’s extremely low cost to utilize (end-user fees) have seen it move to the front of available offerings.

Bitcoin offers a tantilizing glimpse into a global currency, uncontrolled by governments and banks and comparative stability to unstable economies dependent on fiat currencies (think Cyprus or Argentina).

But it’s early in the game. Bitcoin has been unpredictable and unstable to say the least. I considered mining and purchasing bitcoin a few years back when the value of a single Bitcoin was 17 cents. Today’s value is $809.00 US. That’s an incredible surge in value and extremely profitable for early speculators (such as the Winklevoss twins of Facebook fame who reportedly hold 1% of available bitcoin) and casual investors. It was a security issue on the Mt.Gox exchange (the largest in the world) in 2011 that frightened me away. Temporarily.

Bitcoin is enjoying a huge surge in popularity over the past few months, especially here in Canada with a recent installation of the world’s first Bitcoin ATM in a coffee shop in downtown Vancouver. There are many reasons for it’s growth however it’s future is undetermined at this point and it’s highly speculative and extremely volitile. It’s not the place for your life savings, especially if you plan on retiring at any point in your life, but return is in direct relation to risk so it could eventually be responsible for the world’s first trillionaires. Yes, that’s TRILLIONAIRE with a ‘T’.

There’s more than enough information about Bitcoin available but one video that stands out for me is a talk by Andreas Antonopoulos, a technologist and bitcoin entepreneur, who spoke to The Jefferson Club on September 25, 2013. It’s a detailed, highly informative talk and offers more insight into the technology and market than I’ve found anywhere else. Antonopoulos is a brilliant guy, has earned degrees in Computer Science, Data Communications and Distributed Systems and has been involved with cryptocurrency since the 1980’s.

If you’re looking for a solid understanding of Bitcoin, watch the video below. It’s over an hour but the best in-depth education on the subject I’ve found at this point.

R&O

  1 Comment

  1. Rob McQueen   •  

    I hope that you do not think me rude, but the problems with Bitcoin being the solution to our financial problems, as I see it, is that there are way too many people with massive debt that has to be repaid. Bitcoin, perhaps is a slow method of digging out of one’s personal debt-hole, but there is the whole country that is also in debt. There is another way out of Canada’s financial problems, that is forcing the Bank of Canada to finance the Government of Canada’s deficits with debt-free money, as opposed to borrowing from Private Banks and landing Canada in unpayable debt.

    There is also the problem of how people promote large projects that they need financing with.Or, it could be even to get the money for buying your personal house. Perhaps, this is the first steps in the evolution of that economy and that some day there will be Bitcoin banks. But that might end up in just another manipulation by the Wealthy, just as the banking industry is for us today. Bitcoin has to come up with a solution of expanding the Economy.

    If interested you can read this to understand my point of a solution to Canada’s debt: http://pushinback.wordpress.com/2012/09/23/571/

    In this, 3 economist proposed that Canada get it’s money from the Bank of Canada so Canada no longer get in debt. What is not mentioned in the article, but is part of common sense, that if Canada wasn’t in debt you and I would have half (or more) of the money that we pay for taxes still in our pockets. Imagine that, you might, depending on how much tax you pay, have thousands of dollars still in your pocket. Imagine what you could do with that money, like pay off your debts, buy a vehicle, or even take you out of the cycle of struggle of just putting food in your mouth (if you are within the category of the working poor).

    Of course, I can see you point, where Bitcoin is something you can do to take personal charge of your own money, and debt, but the solution, as I see it, will require a greater change than Bitcoin to straighten out the economy that we are all tied to. On my side, changing the economy over to getting money from the Bank of Canada will be a huge struggle, but it is the only battle that will save Canada for sinking into the same abyss of debt that most of the World has already fallen into.

    I invite you to contact me at http://www.pushinback.wordpress.com if you would like to leave your thoughts on where I am wrong in my assessment. I will gladly post it on my blogsite.

    I have enjoyed your article, in it there is much to think about and stimulate new ideas.

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