What's Driving the Bitcoin Revolution


3 Δεκ 2013 (πριν από 4 χρόνια και 5 μήνες)

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What's Driving the Bitcoin Revolution

Bill Mitchell • bill@bwm748.com
• www.bwm748.com

June 2013

The  lure  of  digital  currency  is  obvious  it:  is  easy  to  transport,  transcends  borders  and  is  not  subject  to  
governmental  monetary  policies.
The  bitcoin
 network  came  into  existence  Jan  03,  2009  created  by  
Satoshi  Nakamoto,  whose  real  identity  
is  unknown.  A  bitcoin  was  originally  worth  less  than  a  cent,  by  March  2013  they  were  trading  at  $30/each,  
a  month  later  they  peaked  at  $260  and  today  they  are  worth
 $122/each;  There  are  currently  
approximately  11.2  million  bitcoins
 in  circulation
 that  number  will  increase  each  year  until  the  year  2140
when  the  upper  limit  of  21  million  bitcoins  
will  be  in  circulation.

Should you trade in Bitcoin

Bitcoin  transac
tions  are  typically  referred  to  as  anonymous.  While  it  may  be  possible  to  obscure  your  
identity  in  many  cases  you  can  be  identified.  Few  merchants  currently  accept  bitcoin.  The  real  opportunity  
starts  when  there  is  mass  adoption  of  bitcoin  by  merchants  loo
king  to  escape  high  ATM/credit  card  
transaction  fees.  Currently  the  people  who  are  most  bullish  are  the  early  bitcoin  owners  who  are  "in  the  
money"  they  are  essentially  betting  bitcoin  values  will  increase.  More  people  are  using  the  currency,  in  
April,  a  r
ecord,  $1  billion  in  bitcoin  changed  hands.


Bitcoin has four major downsides: (1) volatility, the value of a bitcoin is not static; (2) security,
there have been several documented cases of Fraud and theft, Some bitcoin exchanges have
been hacked and
some have shutdown without refunding customers money; (3) competition
Ripple, a competitor is trying to gain traction. Venture capital is pouring into bitcoin companies.
Adam Draper who runs Boost, a startup accelerator is looking for 7 bitcoin companies;

(4) public
policy, while virtual currency is legal in the United States, it has not been given a governmental
seal of approval. Regulatory roadblocks, not demand may be the biggest hurdle keeping bitcoin
from going mainstream.

Getting Started

To get sta
rted you need a software wallet, there are dozens of options. Your wallet contains two
sets of keys: Your private key keeps track of your bitcoin(s).

Your public key allows you to
transact with the outside world. Note: if you lose your private key, or it
s hacked, your bitcoin(s)
most likely cannot be retrieved. To get bitcoins you either sell something and receive bitcoin in
return, purchase or mine them.


High profile venture capitalists such as Andreessen Horowitz and Union Square Ventures hav
invested in virtual currency related companies. Established players such as Google and PayPal
have taken notice of bitcoin. Google is supporting Opencoin. PayPal is teaming with OANDA.


For the next couple of year’s bitcoin
may be a victim of its own success, the huge price swings
caused by speculation may get worse. Once the newness wears off the currency may reach its
potential but significant obstacles remain: government policy, security and competition but the
bitcoin ec
osystem will grow and improve and eventually stabilize the bitcoin.