Are you one of the millions of folks who own bitcoins or other forms of digital currency? As this relatively recent development (bitcoins were invented in 2008) continues to gain in use and acceptance, it is likely that you know someone who does use bitcoins even if you do not.
As an interested observer – not a bitcoin user, yet – I wonder what the experience has been for those using this medium of exchange as well as the reasons for others who have considered using bitcoin opting not to participate. The fact that bitcoin does not rely on an intermediary and is decentralized is quite appealing, not least for the appearance of anonymity of one’s transactions.
Since bitcoin operates digitally, the reliance on computers of various types is substantial, which opens one to the likely negative impact of any type of computer failure, ranging from loss of a digital key to the interference of an EMP event. In those cases where bitcoin is used in offline transactions, the need to protect the credentials (whether paper or metal or other method) is similarly important. The nature of bitcoin suggests that there is a need to be diligent in protecting against the potential for negative impact from such events.
Another interesting aspect of the bitcoin phenomenon has been those touting it as an investment alternative. As a medium of exchange, the bitcoin seems to be effective. Where the investment aspect arises is the value of bitcoin stock, a stock that has seen enormous increases of late, increases that attract not only attention but investment with investors hoping to climb on that shooting star. A word of caution, this may be a good time not to jump aboard given the likelihood that prices will flatten or even drop for a time while the market absorbs the recent surge. You won’t want to be the one buying in at the top and be left holding the stock when the music stops. Of course, if you are patient, after a time it may well surge again.