Is Cryptocurrency Money?
The answer depends on who you ask. To some cryptocurrency is like gold, but to others it’s nothing more than invisible code. In simple terms, cryptocurrency is a digital currency that uses a level of encryption to generate more of itself and validate transactions. Cryptocurrencies are widely used online for completing purchases, but they are beginning to make an appearance in small and large businesses.
Before the modern era of coin and paper money people would barter to attain necessities. After experiencing many problems with bartering, gold was accepted as a valuable form of trade. A value was set on gold and commerce went on its way. Gold became a valuable currency because the people who used it believed in its value. If enough people believe in the value of something then it retains that value. Cryptocurrencies have communities that believe in the value of them. Unlike money issued by a government, cryptocurrencies tend to fluctuate greatly depending on what people believe it’s worth.
Bitcoin (BTC) is what comes to mind when someone thinks of cryptocurrency. In 2008, a paper was published by Satoshi Nakamoto titled, “Bitcoin, A Peer-to-Peer Electronic Cash System”. In early 2009 the first Bitcoin software was released. It allowed people to send encrypted transactions to anywhere in the world for a miniscule fee. This was the start of the cryptocurrency movement.
Bitcoin is recognized as the first decentralized cryptocurrency. It’s an unregulated currency which means that there exists no “Bank of Bitcoin” that oversees its use, therefore those who want to send or receive Bitcoin can do so without depending on a middleman or bank.
Bitcoin isn’t the only cryptocurrency however. Since it is open-source it has allowed the creation of other “coins”. Litecoin was the second cryptocurrency to emerge after the creation of Bitcoin. There exist many cryptocurrencies such as Peercoin, Mintcoin, Blackcoin, Primecoin and the list goes on and on.
A Darker Use
Cryptocurrencies, in particular Bitcoin, have been looked down upon because of its use on the dark web. In short, the dark web is a hidden part of the internet that contains many illicit websites. Drugs, firearms, and other contraband can all be found on these illicit websites. Many of these sites only accept Bitcoin as a form of payment. The usage of Bitcoin on these sites allows the buyer to obtain a level of anonymity when making purchases on the Dark Web. This is the reason that many feel uncomfortable using cryptocurrencies.
A Brighter Side
On the flip side of things, Bitcoin as well as other cryptocurrencies have the potential of doing a lot of good. A prime example is Curecoin. Curecoin is a cryptocurrency that aims to find cures for diseases like cancer and alzheimer by simulating protein behavior. This simulation helps researchers at Stanford University advance current medicine to help combat diseases.
So is cryptocurrency money? Well it will depend on who you ask. Will Bitcoin one day be adopted by banks, universities, and nations? We won’t know the answer to that until it happens. All we know is that cryptocurrencies are here to stay. Maybe one day your paycheck will be made up of Bitcoin.