Bitcoin presents an uncertain digital future

Devan Fink, Online Editor-in-Chief

In a world that revolves almost completely around the exchange of bills, coins and checks, the idea that money can be completely digital, unregulated and not backed by any government is foreign to many people.

But that is what was created in 2009, when a person or group of people known as Satoshi Nakamoto, whose actual identity remains unknown, launched bitcoin, a worldwide currency system that remains completely independent of any government or administrative body.

Over 100,000 merchants and vendors accept bitcoin as a form of payment, and its transactions are kept in a public ledger known as a “blockchain.” According to Cambridge University, there are anywhere from 2.9 to 5.8 million unique users that use cryptocurrency, most of which is bitcoin.

Yes, bitcoin has been around for almost a decade, but its relevance has skyrocketed within the last 12 months. In Jan. 2017, one bitcoin was valued at approximately $900 USD. Today, it is worth over $11,000 USD at the time of this publishing.

We do not know what caused this rise, and for this reason, many people have become wary of bitcoin’s future. It seems as if it goes up every single day, but as Isaac Newton so famously stated, “What goes up must come down.” Bitcoin’s price must come down.

But what if it doesn’t?

Bitcoin might just be the future. Without being regulated by a government, one can make purchases using bitcoin without being tracked, and they do not have to pay taxes on it. Bitcoin allows circumvention of the system, and in a world where almost everything can be recorded, that carries a huge appeal to a lot of people.

I started reading a book entitled “The Age of Cryptocurrency” by Michael J. Casey and Paul Vigna over winter break. Bitcoin’s lack of regulation allows it to provide unexpected benefits. Women in Afghanistan, for example, are limited in making purchases on their own. But with bitcoin, as Casey and Vigna point out, which cannot be tracked by the Afghan government, they are able to buy materials that may advance their roles in society in the future.

Advantages like these only come when the middleman, like a bank or a government, is removed. Bitcoin’s purpose is to cut out that middleman.

Since bitcoin’s inception, it has always been a way to make illegal purchases. With its recent boom, though, it may be moving into the “mainstream.” McDonald’s and Amazon are among the companies that are considering accepting bitcoin as a form of payment at some point in the near future. The more bitcoin moves into our “normal” society, the more confidence the general consumer will have in it.

Confidence is what creates value. The United States dollar, for instance, is no longer backed by gold, silver or any metals; in fact, it has not been backed by any of these “speice” since 1971. What gives the U.S. dollar value, as opposed to gold, is consumer confidence.

No regulation does not come without risks, either. If your bitcoin is hacked and stolen, the government cannot catch the criminal who did this. However, if someone robs your house and steals all of your “actual” money, then the government can press charges against the said robber.

That is why we cannot make any judgements on bitcoin just yet. It may just be the beginning of a monetary revolution, or it could just be a fad, ready to crash at any moment.

The jury is still out.