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Top 10 bitcoin facts and comparisons
It was the killer app that no one ever figured out. Thus when bitcoin first emerged, I had hoped that it would be The One. I first began thinking about digital currency in the mids when I met a brilliant cryptographer and mathematician named David Chaum, who had invented what he called electronic cash, or e-cash.
It did exactly what bitcoin purports to do — allow people to use virtual money, stored on their computer, to make purchases and send money to other people.
Chaum was way ahead of his time. He founded his company, DigiCash, five years before the creation of either Netscape, which popularized the browser, or Amazon.
By , DigiCash was bankrupt. Napster, which was founded in , used peer-to-peer technology that allowed music lovers to download songs illegally.
Instead, entrepreneurs and companies created a series of workarounds, some better than others. The best-known was PayPal, which essentially accessed your bank or credit card account to make purchases or send money. Even so, we still spend an awful lot of time filling out credit card information when we want to buy something online.
Meanwhile, every effort to come up with an electronic currency foundered. I remember one called Qpass and another called WebPay. In the early s, e-gold emerged as a potential solution, until it turned out that it was being used primarily by criminals.
In , its founder pleaded guilty to money laundering. According to the website 99bitcoins. Whatever the original intention, bitcoin has morphed into an asset whose only purpose is speculation. That is its fatal flaw as an electronic currency.
Or, rather, that is one of them. The other flaw is the very quality that many of its adherents love most about it: In the case of bitcoin, he said: Its first job is to protect the financial system of the United States. I can imagine that after the bubble bursts, bitcoin will continue to be traded. Maybe a few of the other cryptocurrencies will have similar trajectories though most will dissolve into nothingness.
I can see it reflecting the larger economy in some way, rising in certain environments and falling in others. In the best case, bitcoin might come to be seen as the digital equivalent of gold. Posted from my blog with SteemPress: I am a robot. I just upvoted you! I found similar content that readers might be interested in: What the bitcoin bubble shows, however, is that bitcoin is just another e-currency failure.
As e-commerce took hold, the only means of payment was a credit card. It was a real commercial friction point: And once you had done that, your information would be vulnerable to hackers.
Electronic currency could have solved both these problems. If my children had access to a digital currency — maybe their allowance! They would have happily paid. And e-cash would have made internet commerce pretty darn close to frictionless. Authors get paid when people like you upvote their post.