So here at BSide Laboratories we have been following one of the most interesting trends, Bitcoin. We also have just bought some. What is a Bitcoin you ask? A Bitcoin is a decentralized digital currency based on an open-source, peer-to-peer internet protocol. It is a brand new currency that can’t be controlled or tampered with by politicians or governments. It is completely based on math and has set amounts that determine how much can be made- people can’t just make more or less and fluctuate the market. “Bitcoin is not managed like typical currencies: it has no central bank or central organization. Instead, it relies on an internet-based peer-to-peer network. The money supply is automated and given to servers or "bitcoin miners" that confirm bitcoin transactions as they add them to a decentralized and archived transaction log approximately every 10 minutes.” This new internet currency has become the most widely accepted alternative currency available and could potentially threaten established currencies. I believe it is already stronger than 12 nation’s currencies.
So what’s going on with it? Well it has effectively exploded in price. That is the first thing to know. When we started following bitcoin it was $10.00 a coin (that was a few months ago) it is now $150.00 a coin and quite honestly it might go much higher. The recent large explosion in price might be in part to the financial trouble in Cyprus . As banks essentially took people’s money in Cyprus, people flocked to an alternative non-government backed currency and all fell into Bitcoin. There is even talk of putting up Bitcoin ATMs in over 30+ countries. Lots of people in Europe are feeling quite worried about the security of their money, there is but one alternative but it's a gamble. Some experts are claiming the boom in price is sign of a bubble and that a major crash might happen. The price of Bitcoin has been kind of all over the place for a few days so it seems less like a stable currency and more like an investment opportunity.
- Completely decentralized
- Inherently anonymous
- Rising in price
- Very clever in concept and incredibly well thought out
- Supporting opensource and new ideas
- Relies on no bank institution
- Allows for miners to make bitcoins by just using the power of their computers (a neat idea)
- Not stable in price (this could lead to hoarding/investment mentality rather than spending)
- As secure as you make it, websites that stored bitcoins have been hacked. If someone steals your bitcoins or gets access, there is no getting them back.
- Potential bubble may burst and crash the currency
- Not a lot of places accept bitcoin (yet) makes it difficult to become a standard currency
- Somewhat difficult to buy, you either have to send a moneygram at your local cvs or attach your bank account and fund an account and buy them. No where you can use your credit cards/debit cards etc.
If you want to learn a bit more the founder (and notably mysterious) Satoshi Nakamoto wrote an elaborate explanation of the entire system, it can be very confusing but if you review the wiki and other community pages they can simplify it.