Business News: Cryptocurrency

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Business News: Cryptocurrency

Grady Johns

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Bitcoin or BinCoin? While we see headlines about cryptocurrency and are informed about the current events and feelings of nations, true understanding of cryptocurrency and if it’s worth adopting is a mixed bag of opinions spurred on by what is called the Bitcoin bubble.

Cryptocurrency has been in the public eye since its inception because of its radical idea of an unregulated, anonymous currency and controversy in the market.

While Bitcoin was the first decentralized cryptocurrency that was invented in 2009 by an unnamed user with the alias Satoshi Nakamoto, cryptocurrency has been around longer as an experimental way to secure military transactions and, depending on who you ask, spy activities as well. The difference between these and Bitcoin is that the older cryptocurrencies were still regulated and maintained by a central power. The other radical difference between the two is cryptocurrencies like Bitcoin have technology called a blockchain.

“To my colleagues I’ve spoken to about cryptocurrency, they aren’t interested in the finance side of it but more in the blockchain technology because of its possibility to revolutionize Management information systems (MIS),” Ed Weber, a Millikin Information Systems professor, said. Weber has been in the business for longer than many students have been alive.

Explaining a blockchain is a complicated concept but at its core, the purpose is to secure files by copying them everywhere and updating them at the same time. It would require massive computer power to attempt to take over the system, and it is a public ledger that everyone can view. It does follow strict rules about how it gets amended, processes transactions, and follows a peer to peer file sharing system.

Blockchain is a topic all to its own, and the main reason people are looking at cryptocurrencies like Bitcoin is to get rich off an investment in it. The Bitcoin bubble started as more people started discovering, purchasing, and mining Bitcoin. Its worth grew dramatically. Critiques of Bitcoin are saying that eventually this bubble will burst because its worth is decided solely on the opinions of users.

As of now, there is some evidence to show that the theory holds water. The value of Bitcoin was declining when recently it hit a fifty-percent rebound. We are waiting to see what happens next with its value.

Inflation plays a large role in why people are still investing in BitCoin and in affecting currencies. For example, in Venezuela, people lose roughly about half their income to inflation, so to them putting money in Bitcoin appears to be a more stable option.

While examples like this give purchasers and miners hope for their currency, Bitcoin and other cryptocurrency have a big obstacle to overcome to get the rest of the world onboard. Cryptocurrency has a dark alliance with all things criminal, especially the dark web. The dark web is a part of the web only accessible with special software, used extensively by criminals and anyone wanting to maintain anonymous and untraceable.

Bitcoin is the main cryptocurrency used for the dark web but because of its increased popularity, the transaction period has slowed down so much that criminals no longer want to take the risk of being scammed midway through a transaction and are moving on to lesser-known currencies. This has caused concern with many countries who fight against the dark web since decentralized currency is serving its purpose to be difficult to control, causing countries like India and major banking corporations such as Chase and Bank of America to start steps to restrict or ban cryptocurrencies to discourage use of it.

Legislation has backed these actions due to the risk of allowing businesses to be shady in their dealings when the trend has been trying to make them more transparent for the public.

The other big obstacle, which Weber brought up, is if we should ethically be consuming our limited resources to, in the end, produce a fictitious number. What Ed is referring to is the mining of cryptocurrency. One mines cryptocurrency, like Bitcoin, by building a mining rig, which is much like building a computer. However, it relies on getting as much processing power as possible to solve mathematical equations that get harder and more complex as the blockchain grows. This has caused an economical spike in the cost of computer hardware as miners are buying more and more parts to improve their rig. There was even a group of scientists arrested in Russia because they tried hooking up a super computer meant to run nuclear bomb simulations so they could mine bitcoin faster.

Despite the ups and downs of cryptocurrency, it has managed to hold on as a concept and only time will tell if the idea will keep mining or collapse under the weight of a skeptical world.