Bitcoin pays and gives change
The economy moves, changes, evolves, transforms and becomes global.
Could Bitcoin finally reaffirm all of the above?
As a banker I have mixed feelings, the old school tells me in my left ear that the traditional financial system is no longer fit to be healthy and needs adjustments and new horizons under the protection of real physical backups, as it should be, that we must retake its essence, but in a reconstructed way.
In the right the whisper comes from the new digital approaches, and they seduced me to the point of having informed me at the top to know where “the hare can jump.” It is prudent to say that as I write this paragraph it’s already the most widely used digital currency in the world.
Evidently it is already a fact that it works and its presence is in different commercial fields directly involved with the digital transactions. Let’s understand that it is an activity carried out through the Internet. To familiarize ourselves a little more with this mode of currency, it is important to say that it is also known as crypto-currency.
Bitcoin is intended to be a monetary exchange such as the dollar or the euro and is used to buy goods or receive services. So far there is no complication and is defined as easy.
It gets a little complicated to understand how it works and as with everything it has it’s advantages and disadvantages, but I will try to make it as practical and easy to understand as possible.
The concept of this type of encrypted digital exchanges, comes from the 70’s. It was already foreseen and projected that the Internet was going to be decisive regarding communications´ development especially for specific use of governmental operations. Nevertheless the conditions changed as everyone fell for “The Net”, and we already know what happened in this sense: human beings from one moment to the next we became citizens of one world.
Returning to the financial issue at hand, Bitcoin emerges as an option for financial transactions P2P (Peer To Peer) and was officially installed on the Net in 2009. Unlike other monetary systems, there is no direct issuer such as a State, a bank or a financial institution and therefore is not governed by the International Monetary Fund (IMF). These factors make it more efficient and cheap by removing from the equation many intermediaries that the current currencies need to function. To be more specific, the products or services are cheaper as they constitute a direct operation between buyer and seller.
It has has several virtues, for example, to safeguard the identity of users doing direct transfers between themselves. Tracking movements with Bitcoin is difficult as left prints are almost undetectable .
Something that I like a lot is that when buying something “online” with this crypto-currency, you can use a sort of trust system that is known as “escrow”, which allows that the seller can only charge if the buyer received his product to satisfaction. Otherwise the buyer returns the product and can only recover its Bitcoins if both are satisfied. Thus both win and total satisfaction circle is closed.
The main problem is the vulnerability that it could have by being exposed in the Net.
Bitcoin in itself is impossible to falsify or duplicate as it is encrypted with unique and unrepeatable codes. However, malicious people called keyloggers can remove them from different accounts by intercepting the keystrokes on users’ keyboards, making codes available to be redirected to other sites. I already mentioned that it is decentralized and in short is a process between people. Developed by different companies or simple users who dedicate their resources and invest very little in what is known as “Mining” or “Extraction”. I might talk about this at another time because it is very complex and dedicated. Yes, It’s something exciting, but not very easy to explain in colloquial terms.
The Bitcoin is full of controversy due to many digital challenges that have yet to be resolved, such as password theft to avoid patrimonial losses, software errors, the insertion of malicious codes to sites that issue or receive Bitcoins, denial of service attacks, possibilities of being “off-line” and more.
So with all the good and bad that can have this crypto-currency, I’ ll say, using a phrase that could employ a modern Galileo: “And yet it moves …”