Bitcoin relies on a network. The network relies on computers. Internet, telecom, satellite and other communication systems must be free and functional for the computers to form the network. Computers and the network rely on electricity. Any one of these legs of the Bitcoin system can take it down.
Ultimately, Bitcoin relies strictly on the belief that they are rare and worth holding, spending, and transacting with. Unlike gold and silver, there is no use for a Bitcoin and never will be, other than the role as a token residing within a computer network.
Even though there are services now working on creating physical forms of Bitcoins, there is no practical method of confirming the legitimacy of that Bitcoin address and spending power without computing power. Eventually, without electricity and computing power, Bitcoin would cease to exist. This is a critical issue with Bitcoin that will initially prevent wide spread adoption for critical wealth storage.
Some of the physical forms of Bitcoin now afloat are:
https://www.casascius.com- offers coins that represent Bitcoins
http://www.bitbills.com- offers cards with Bitcoin values on them.
The distributed nature of the Bitcoin network and mining is both a great strength and somewhat of a weakness. The network verifies all the transactions. It also solves any disputed transactions. With a huge and growing number of nodes, there is no single server to hack for the miners, spenders, merchants, or governing body. Without a central storehouse of key data such as a CitiBank, Bank of America, or any number of other major banks, the system is much more robust than almost any other currency system.
Bitcoin has also passed the acceptance test because it has a four-year history. Though major retailers have not adopted Bitcoins, smaller ones have accepted it. Wordpress, Reddit, and many smaller businesses are Bitcoin friendly. There are at least 1,000 stores using Bitpay for merchant services already.
Now that Bitcoin has recovered from the $260 to $100 crash and sits comfortably at $130 today on April 22, 2013, it confers stability to Bitcoin. Time is Bitcoin's friend. There will be fewer options for destroying Bitcoin. Large retailers will no longer be able to ignore it as it continues building credibility and reaches a more predictable exchange value.
Ultimately, Bitcoin relies strictly on the belief that they are rare and worth holding, spending, and transacting with. Unlike gold and silver, there is no use for a Bitcoin and never will be, other than the role as a token residing within a computer network.
Even though there are services now working on creating physical forms of Bitcoins, there is no practical method of confirming the legitimacy of that Bitcoin address and spending power without computing power. Eventually, without electricity and computing power, Bitcoin would cease to exist. This is a critical issue with Bitcoin that will initially prevent wide spread adoption for critical wealth storage.
Some of the physical forms of Bitcoin now afloat are:
https://www.casascius.com- offers coins that represent Bitcoins
http://www.bitbills.com- offers cards with Bitcoin values on them.
The distributed nature of the Bitcoin network and mining is both a great strength and somewhat of a weakness. The network verifies all the transactions. It also solves any disputed transactions. With a huge and growing number of nodes, there is no single server to hack for the miners, spenders, merchants, or governing body. Without a central storehouse of key data such as a CitiBank, Bank of America, or any number of other major banks, the system is much more robust than almost any other currency system.
Bitcoin has also passed the acceptance test because it has a four-year history. Though major retailers have not adopted Bitcoins, smaller ones have accepted it. Wordpress, Reddit, and many smaller businesses are Bitcoin friendly. There are at least 1,000 stores using Bitpay for merchant services already.
Now that Bitcoin has recovered from the $260 to $100 crash and sits comfortably at $130 today on April 22, 2013, it confers stability to Bitcoin. Time is Bitcoin's friend. There will be fewer options for destroying Bitcoin. Large retailers will no longer be able to ignore it as it continues building credibility and reaches a more predictable exchange value.
Bitcoin is not out of the woods at all. There are dark forces after Bitcoin's hide, and they have already struck. They have a few key targets we will explore in next post.
0 comments Blogger 0 Facebook
Post a Comment