A Rabbit Hole! It’s what I fell into. My absence from writing about the retired life in the Philippines has been sidetracked, not by an over abundance of enjoying the retired life in paradise, but by Bitcoin! Yes, Bitcoin and all that it entails…it’s virtual currency or digital money that can be spent in a growing number of places, mostly online and in a growing number of retail establishments around the world. Years ago a friend introduced me to a new idea whose time had come and it was a crypto-currency called Bitcoin. He explained to me how it could be “mined” using only a laptop computer. I briefly looked into it and completely shrugged it off and today that decision has shown up to haunt me. I could have been rich already…again! Get your self a cold one, kick off your footwear and take a seat, because a long explanation is forthcoming. Go ahead….I’ll wait.
Okay. Bitcoin. Some of you may have already heard of it and many of you have not (to be more precise, 84% of the worlds population have not).
What is Bitcoin?
Bitcoin is a virtual or digital currency system introduced as open-source software and was developed by anonymously by a person named Satoshi Nakamoto in 2009. What he designed is referred to as “blockchain technology” (or better described as peer-to-peer technology). Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system. Unlike traditional fiat currencies, bitcoins are issued and managed without any central authority whatsoever: there is no government or central authority, there are no banks or a company in charge of Bitcoin. As such, it is more resistant to wild inflation and corrupt banks. With Bitcoin, you can be your own bank.
Managing transactions and the issuing of bitcoins is carried out collectively by the blockchain network itself. What makes this Bitcoin technology so interesting is that it is all done with open-source code, its design is public, nobody owns or controls Bitcoin and everyone can take part. Bitcoin itself is the currency of the Internet: a distributed, worldwide, decentralized digital money.
What is a Blockchain?
A blockchain is nothing more than a shared public digital ledger that keeps track of all transactions conducted with bitcoins. Each and every transaction is logged in the blockchain ledger across a network of hundreds and thousands of network computers. The computers work in tandem to ensure the authenticity of each and every transaction. This automated process allows for transactions to be decentralized from a central bank or money issuer, which speeds up the rate at which a buy or sell can occur. Bitcoin payments work at a peer-to-peer level without a central repository or single administrator (like a bank), which has ultimately led the US Treasury into a recent tizzy of sorts. The technology and interest in crypto-currencies is growing so fast, the Treasury has finally agreed to officially identify Bitcoin as a “decentralized virtual currency.” Although its status as a real currency is disputed, media reports often refer to Bitcoin as a crypto-currency or digital currency. The U.S. Internal Revenue Service has also recently (April 2015) recognized Bitcoin as such a concern that they have classified it as an “asset.” Leave it to the IRS to hastily jump on board and by doing so, it can be said that they have pretty much validated it as a currency and authenticated its existence.
Watch this short video below for a more simple understanding of this technology.
Now, after watching this video and you are scratching your head, don’t worry, you’re normal. Can you remember back in the early 90’s when someone talked about “the internet”, you may have just scratched your head, right? And when January of 2007 Steve Jobs announced the iPhone at the Macworld convention, people were in awe over the micro-technology, but many dismissed it like “yeah, right, it will never replace my computer, it’s too small!”
I remember looking at an old Motorola bag phone and saying, “I will never be caught dragging a cellular phone around!” I also remember back to 1975 while living in Guam, a young Navy ensign explained to us one evening while on a mid-watch that a little Texas company called “Intel” was working on a computer chip so small you could carry it in your pocket (this, at a time when I was a computer center operator running three computers crammed into a 1,500 square foot air-cooled space). It was totally unimaginable. And if that young Navy officer was smart enough to heed his own advice back then, he is undoubtedly beyond filthy-rich today.
Is Interest in Bitcoin Growing?
Corporate America and the financial sector has warmed up to Bitcoin. While both have expressed a keen interest in Bitcoin and its technology, Wall Street exudes the most interest. The New York Stock Exchange and Goldman Sachs, among others, have already invested in Bitcoin-related companies. Venture capital firms are putting billions of dollars into start-up companies. Just last January, the New York Stock Exchange, USAA Bank, Spanish banking conglomerate Banco Bilbao Vizcaya Argentaria, SA, and and former Citigroup Inc. chief executive Vikram Pandit took stakes in Bitcoin consumer services and exchange provider Coinbase. The NASDAQ has also taken the bull by the horns and will soon begin testing a new platform using Bitcoin’s blockchain technology in the NASDAQ Private Market, a fledgling marketplace launched in January 2014 to handle pre-IPO trading among private companies. The platform has more than 75 private companies signed up, according to the company.
Meanwhile, leading figures from Wall Street, large banks, and Washington are taking job offers in the digital-currency sector. In a nutshell one could say the traditional banking gurus are bailing out.
Who Uses Bitcoin?
While the interest continues to grow worldwide, bitcoins have been taking over the crypto-currency marketplace. Many large companies are accepting bitcoins as a legitimate source of funds. Below are just a few of the American companies that are accepting Bitcoin as payment for goods and services.
- WordPress.com – An online company that allows user to create free blogs
- Overstock.com – A company that sells big-ticket items at lower prices due to overstocking
- Amazon – An online company that sells almost anything.
- Target – An American retailing company
- CVS – A pharmacy shop
- Subway – Eat fresh
- Victoria’s Secret – A lingerie outlet
- Virgin Galactic – Richard Branson company that includes Virgin Mobile and Virgin Airline
- Reddit – You can buy premium features there with bitcoins
- Zynga – Mobile gaming
- PayPal / Ebay – Credit card / payment processor / Auction
- Tesla – The car company
- CheapAir.com – Travel booking site for airline tickets, car rentals, hotels
- Expedia.com – Online travel booking agency
- Zappos – Online retailer
- Sacramento Kings – Professional Basketball team out in Sacramental California (NBA)
- Bing by Microsoft – 2nd search engine to Google
- Bloomberg.com – Online newspaper
- Kmart – Retail products store
- Sears – Clothing and household products, electronic store
- Gap, GameStop and JC Penney – have to use eGifter.com
- Dish Network – An American direct-broadcast satellite service provider
- Apple’s App Store – Buy music and any app on the Apple AppStore with bitcoins
- The Libertarian Party – United States political party
- Intuit – an American software company that develops financial and tax preparation software and related services for small businesses, accountants and individuals.
- ShopJoy – An Australian online retailer that sells novelty and unique gifts
- Wikipedia – The Free Encyclopedia with 4 570 000+ article
- Dell – American privately owned multinational computer technology company
For more information and companies that are accepting Bitcoin, visit: bitcoinvalues.net
Where is Bitcoin Headed?
This is the $64,000 question (or ฿1505.88 at current exchange rates). Although nobody knows for certain where Bitcoin will go, or what is in store for the crypto-currency market as a whole, but know this; Most major corporations and companies, large and small, are currently addressing their crypto-currency policies and strategies going forward. Governments around the world are looking at potential lost revenues due to the explosion of crypto-currency usage. Banking conglomerates are expressing concern. Bitcoin Investment Trust (BIT) recently received approval to sell shares on the OTC markets under the ticker symbol GBTC. The fund gives investors a way to invest in Bitcoin without going to the trouble of buying Bitcoin and worrying about having a secure place to store it. It marks yet another step forward in Bitcoin’s long march to mass adoption. And while Bitcoin is the most dominant player in the crypto-currency marketplace today, there are other digital currencies like Litecoin, and Dogecoin that have been noticed as potential competitors to Bitcoin. Here is an interesting article on how the digital currencies stack up.
And if all that techno-speak doesn’t interest you, maybe the cost of sending money to yourself or loved ones in the Philippines does. The remittance market is heating up with the idea that you can now send money to the Philippines, almost free! (except for the actual cost of electricity to send it!) There is even a Bitcoin ATM Map that shows all ATM locations worldwide, even in the Philippines.
Did you know you that in addition to buying bitcoins from an exchange, you can acquire Bitcoins for free? There are many sites across the internet and the world that have capitalized on the rush to get Bitcoin. Monetized advertising sites actually generate money from the ads on their pages and give you free Bitcoin just for showing up. They are called Bitcoin Faucets and they are built with the idea is that you keep returning to their site to gather up more free bitcoins, therefore driving more traffic to their paid advertisers. The more you visit, the more money they make, and the more Bitcoins they give away. They just drip Bitcoins! Some are actually pretty cool. Check this one out: FreeBitco.in
I guess where I am going with this is to simply justify with myself this question: is this just another fad or is it another Intel corporation hatching. Honestly, the more research and reading I do, the more of a no-brainer it becomes. Is it time for crypto-currencies to take over the world? It very well could be and I sincerely feel like I can see this one coming. So as a hedge against inflation and to potentially help ensure a comfortable way of life here in the Philippines, I took the plunge and invested in Bitcoin. If it is truly a deflationary currency, then we will never have to worry about cost of living increases…ever! If it turns out to be a great investment, then again, definitely no worries. And if it never amounts to anything? …well, I guess I’ll just store all my digital dollars away in another box in the same closet with my Pog collection.
If you still want to know more about Bitcoin and the technology that built it, then check out the full Bitcoin Wikipedia article.