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Bitcoin and the World of New Money

By Sarah Samways  / June 25, 2013

Perusing the Internet Archive’s activity blog will bring visitors to a post concerning an Archive contributor’s recent dealings with Bitcoins. What are bitcoins? A bitcoin is being pegged as the new dollar, only better. Instead of being controlled, mandated, tracked, and taxed upon, the bitcoin promises to be free of charge, safe, and easy to use, and entirely home-based on the Internet. Known as the “cryptocurrency,” a bitcoin is a digital form of money that only changes hands between users. This isn’t your mama’s PayPal – Bitcoin says in particular, “PayPal accounts are tied directly to your bank account or credit card…payments are not in any way anonymous. (Bitcoin) transactions do not need to be tied to a bank account or individual and they are essentially anonymous if some basic precautions are taken.”

Explaining how the process works is a little more involved. When using Bitcoins, a user must sign up for a “Wallet,” which entitles them to a personal web address at which future transactions will take place. This web address then becomes encrypted by the user’s computer web browser, thus disabling anyone beside the user from opening the Wallet. The Wallet then gets stored in a cloud service like Amazon Web Services but users also have the option of just storing it on their own computer. After this process is complete, users can log into their new accounts and begin sending and receiving bitcoins. Transactions are conducted through “miners,” or cyber geeks and computer programmers, who connect to one another through “blockchains,” a public ledger of all Bitcoin transactions, in order to confirm that enough bitcoins are in place for the transaction to happen. Not unlike the practices of a credit card purchase being authorized at a retail store, it’s all a series of back-ups.

Anonymity and separation from a more centralized currency has swayed over 100,000 users across the world. Bitcoins are on the rise, but with great power comes great responsibility. With its increase in popularity, now playing with millions of dollars in lieu of pretty pennies, Bitcoins have caught the attention of media outlets like CNN and the Daily Beast. There is even skepticism about the legitimacy of all the users, some claiming a connection with WikiLeaks founder Julian Assange and whistleblower Edward Snowden. In any case, Bitcoins are changing the marketplace in small steps and very well may be determining a future that’s already here.