You might have heard about the new trend of using online currency. These currencies are fully decentralised–that means that they are not controlled centrally by any government or bank. The most famous of these currencies–bitcoin–was invented by an anonymous computer scientist in 2008. But are these currencies useful in everyday life, and are they safe to use? In this article we will explore some of the money saving possibilities and some of the drawbacks to using bitcoins in particular, as they are the most widely used online currency.
The positives of using bitcoins
Recently there was a story in the media about two American newlyweds from Utah who embarked on 100 day round the world trip, whilst paying for this trip using only bitcoin.
Their excursion was made possible by a travel agency named Simply Travel, who are pioneering the use of virtual currency in the travel sector. Simply Travel made it possible for all of their travel to be booked and paid for in bitcoins. The couple from Utah had only to find day-to-day solutions in order to pay for things such as food and entertainment in bitcoins. The relative ease with which they were able to succeed in their mission of paying only in bitcoins shows how widely accepted the currency has become. The most bitcoin friendly locations were Vancouver, Berlin, and Singapore. One major advantage of bitcoin is that there are no transaction fees. Vancouver is the first city in the world to install a bitcoin ATM.
Another story of bitcoin success for one individual came recently when a Swedish man who had purchased some bitcoins a few years ago realised that they had risen in value to an astonishing half £1 million. With this money he was able to purchase a flat in one of Stockholm’s most exclusive districts.
The problems with using bitcoins
As the story of the Swedish man showed, the value of bitcoins is still very volatile. Cyber crime is still a threat to a degree–Australia recently saw the case of a virtual bank operated by an Australian national being hacked and robbed of nearly £1 million worth of bitcoins. What makes bitcoins mainstream appeal so precarious is the very thing that makes it so secure–the encryption style means that transactions are impossible to trace. However, US investigation services recently arrested one US man from New Hampshire for selling prohibited firearms through a black-market website even though he was conducting his transactions in bitcoin.
Bitcoin is undoubtedly convenient, but it is difficult to govern. If you want to try transacting in bitcoins, we advise purchasing a reasonably small amount and going shopping online or in the real world–as we have seen there are no shortage of vendors in either reality willing to take your bitcoins as payment.
Although bitcoins do have some advantages for black marketeers and cyber criminals, they are surely no more prone to cyber crime than the traditional online transaction techniques such as PayPal. Let us know what you think in the comments.