Will 2014 Be the Year of the Bitcoin?

VirtualPiggy_JAN14

By Dr. Jo Webber, Founder and CEO of Oink

Let’s start from the beginning – what is a Bitcoin? Bitcoin is an open source, peer-to-peer payment network and digital currency introduced in 2009. Okay, so that’s clear! Probably the easiest way to understand it is to look at a recent deal. In December, a Florida man purchased a slightly used Tesla car using 91.4 Bitcoins. One day later, the dealership successfully cashed out 91.4 bitcoins using BitPay, an electronic payment processing system, in exchange for more than $100,000, which was what the customer had agreed to pay for the car.

You may have heard that there is a lot of fluctuation in the value of a Bitcoin and that is true.  It makes people nervous, but a transaction can clear quickly which allows the exchange rate calculation on the number of Bitcoins to the dollar to remain steady through that time period– think of it a bit like foreign currency exchanges.

There are some key differences between Bitcoins and credit cards and other payment forms. In December, a man in the UK lost about $7.5M worth of Bitcoins by throwing away a hard drive. The hard drive contained Bitcoins that he had purchased in 2009 when the pricing was low. That ‘money’ is gone. Another key area is that a Bitcoin transaction is untraceable and that opens up Bitcoins to be used for money laundering and other criminal activities. Bitcoin is not the only digital currency – there are others currently and more will probably follow. There are pros and cons to Bitcoins and other digital currencies.  While people are talking about a bubble – the basic concept of a digital currency holds a lot of promise for our modern global digital world.

Many teens are up to speed on Bitcoin and it makes perfect sense to them. In December we held a Hackathon for teens and tweens to come and develop an application they thought would be of use to their peers. The winner in the 16-19 year old division was a 16 year old who developed a purchasing application using Bitcoins as the currency. He will be coming on board as an intern and will help us explore the future of digital currencies and how they would work with Oink – our own digital payment solution.  Exciting times ahead.

Editorial note:  Virtual Piggy has rebranded their service as Oink.  Dr. Jo Webber is still the Founder and CEO of both.

For more information visit: oink.com

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