5 Ways Bitcoins Have Rocked the Financial World
In January of 2009, Nakamoto’s idea for a digital currency was put to the test. Since then, more than 10 million bitcoins have been mined. Just as Stanford’s Folding At Home uses shared computing to build powerful models and uncover valuable scientific insights, Bitcoin distributes projects to be completed by computers that mine for bitcoins. The more information that’s processed by an individual computer, the more bitcoins are earned. The first transaction was completed in 2009, when a miner indirectly purchased two pizzas from Papa John’s using the bitcoins his computer had mined. Since then, bitcoin has seen an interesting trajectory that has impacted the world of finance in multiple ways.
1. Bitcoin in the Black Market
There have been multiple reports of bitcoins being used to make transactions in the black market. Unfortunately, bitcoins do not have a central bank or other institution which creates a qualified record of transactions. Therefore, bitcoins can be used to make anonymous transactions. It truly is a black marketer’s wet dream. Untraceable currency that can be transferred entirely online.
2. Binary Bitcoin Options
One of the newer developments is the use of Bitcoins to make traditional financial investments. One of these sites that facilitates bitcoin investments, Binary Uno, allows you to trade binary options with bitcoin. A binary option is a position on a stock or other commodity that pays out based on the outcome of a position. To many it’s seen as gambling. For example, if binary option can be taken out on a stock price or any other commodity that changes in value.
3. Bitcoin Currency Conversions
There are multiple markets that allow bitcoin miners to convert their hard earned bitcoins into traditional currency. This has been a relatively volatile market with valuations changing drastically from one day to the next. This is the nature of the beast when dealing with virtual currencies on the cutting edge of financial technology.
4. Old Computers Given New Life
A great side-effect of the bitcoin revolution has been new life for old computers. Systems that have become antiquated as new operating systems launch are now being given a purpose in life. The data that is crunched by these old computers can become valuable to both the owner and the progress of data sciences through distributed computing.
5. Bitcoin Security
One of the most incredible features of bitcoin is the relative security afforded to the currency. As a digital currency, it’s virtually impossible to counterfeit. There are databases in place to check the validity of coins, and online wallets allow for the secure transactions to take place in the cloud.
However, there have been multiple cases where exploits and hacks have been used to steal the bitcoins from unsophisticated users. The weakest link in the chain is the individual that holds bitcoins on his or her computer, or fails to secure their passwords for their online bitcoin wallet. So in the end, just as a dollar’s owner must protect his/her money, bitcoins are only as safe as their user’s practices.
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