Bitcoins

There is a North American saying which goes something along the lines of ‘When the last tree has been cut down, the last fish caught, the last river poisoned, only then will we realize that one cannot eat money’ which seems all the more poignant with the invention of Bitcoins, a digital currency that everyone seems to be talking about. The next big thing which will leave the rest of us scratching our heads musing ‘why didn’t I think of that!’

On the face of it Bitcoins seem like some sort of nerdy wet dream. A system designed by nerdy geeks for nerdy geeks to sit and play with whilst they tackle medieval villains in some far away land before the dawn rises in the real world. A chance for these guys to be cool and hang out in virtual bars whilst the rest of us enjoy the feeling of real human contact. But there is some serious money behind this. It is estimated that the Bitcoin market has a value of $1billion USD. That is a pretty amazing sum considering this ‘currency’ has no central authority on which to bail it out and you will never get the chance to actually hold it in your hands.
So what possesses someone in our real world to purchase one digital Bitcoin for a real world value of $200? Are they nerdy people, are they criminals who want to avoid detection as they carry on with their salacious activities? Or is this simply the way that the world is going? As we head towards a more simulated world, why not have simulated money.

The whole process is actually a lot more complicated then at first it would appear. Bitcoins have to be mined, which takes up a considerable amount of time and resources for an individual with a computer. The process is too much to go through here but needless to say you have to be pretty committed to get involved which will probably put off most of the population. So far not many businesses accept them to buy things and with the Bitcoin rates fluctuating dramatically many that acquire Bitcoins are holding onto them to see if they can make even more money out of the system. Yet Bitcoins seem here to stay, with big financial institutions getting involved.
With banks and bankers so distrusted today for fairly understandable reasons it is not hard to wonder why people are looking elsewhere to save their money. However there are problems. Like many things that are done online, Bitcoin systems have already been hacked and some of the ‘currency’ stolen. There are even reports which suggest that organised crime gangs are involved and they are never slow in trying to exploit new ways to make money or avoid sanction. Yet part of me wants to be involved in this latest craze. I feel that need to be ‘in’ on the latest cool thing. Like to be the first person at work to have the iPhone or a Twitter account.

Does money really exist anymore anyway? If banks are leveraging at 20-1 and I look at my computer screen, then the money isn’t really there. If I buy something on credit, then that person buys on credit and the next person buys on credit these are just all numbers on a computer. Nothing real has actually moved. One bank’s computer says I owe another, which then owes another. Paid electronically, spent electronically, it is never really there! So do we live in a world of virtual money already?
Yet there is little so satisfying as having a wad of cash on you. I remember going to buy a computer console when I was younger with my birthday money. To count that money out and feel it in my hands was great. Knowing I was also spending it on something that I really wanted, something cool, added value to the experience.
Going back to the original quote Bitcoins will not solve our obsession with money, only fuel it.

Whether the hype is real or just another bubble we may not know for a while. All this proves though is that along with Facebook and all these other adventures you should be in from the start. They never turn out to be half as ‘cool’ as they were supposed to be if you join up half way through as the cool people start moving on to the next big thing. But if you were in at the beginning and bought 1,000 Bitcoins at $5 dollars each and sold them when they were $200 a pop, you would be sitting pretty on the best part of $200,000. Now that is cool and savvy.