What is Bitcoin? (part II)

Continued…

  • What can I buy with bitcoins?  Almost anything…   While some mainstream retailers do not support the currency, many online retailers have embraced the concept.
  • Is it safe?  This is a million dollar question.  While its inherent volatility makes its future uncertain, many technologists much smarter than me are working on making it safer.  Meanwhile bad publicity around currency exchanges either getting hacked or shutting down is preventing the general public from jumping in head first.
  • Can Bitcoin boost my business?  Yet another million dollar question.  Let’s put it this way – if you accept it, you will get publicity.  Is that worth taking the risk?  Many would argue yes.

Draw your own conclusion.  Only time will tell if Bitcoin is a passing fad or here to stay.

What is Bitcoin? (part I)

Every semester, I take my students from Columbia College to Chicago Federal Bank’s Money Museum.  It’s a great experience for the students, and I also learn something new with every visit.  On our last visit, I pulled one of the PhDs aside (they all possess a doctorate degree in Economics) and asked, “what do you think about bitcoin?”  The presenter gave me a one sentence answer – it’s a safe haven for illicit traders.  Probably a little too harsh answer, so I did my own research.

  • What is bitcoin?  It’s a virtual currency created by an unknown Japanese programmer (only his pseudonym is known).  It’s not associated with any country or government, making it truly universal.
  • How does it work?  Every user has a “wallet” with a unique identifier.  While all transactions are recorded, user ID is kept anonymous (OK, so that supports illicit trade comment).
  • How  do I get bitcoins?  Various exchange sites / services let you buy and sell for cash.  You can also mine them (honestly I don’t get this concept).

To be continued…

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