Is Bitcoin the future? / by kevin murray

You know that you have made the big-time when there is a congressional hearing about your product which recently happened to Bitcoin.  Of course, that type of exposure has its good sides and its bad ones. Bitcoin is the industry leader in the virtual currency world, but it also has numerous competitors that may or may yet supersede it.


Before there was Bitcoin, there was PayPal.  PayPal also had its competitors but PayPal became the industry standard for eBay transactions that were previously slowed down by vendors because they were limited to accepting paper checks, or money orders, and most small-time vendors were not thrilled about using credit cards and having to pay their associated transaction and monthly fees.  PayPal ended up being a win-win situation for both vendor and customer and became the de facto standard for e-bay transactions and other peer-to-peer transactions on the internet.  The simplicity of the vendor seeing the payment appear in his eBay account via PayPal, allowed the seller to expeditiously mail the product to the buyer, furthering PayPal's' growth.


As we fast forward to about a decade later, Bitcoin, pushes the envelope to a new level by offering to accomplish transactions anonymously through a virtual currency that is fast becoming widely accepted.  However, there are several problems with this method when it comes to the government.  They are: it's not government regulated, it is utilized as a digital currency, it's anonymous, and it competes against our own legal currency and specifically our banking system.


I don't believe the government has any interest in putting Bitcoin out of business.  In fact, you could make a strong argument that the US government would like to see Bitcoin or one of its competitors become the de facto digital currency standard.   What the government and private enterprise like about digital currency is that it is quite traceable, unlike cash transactions, and anything that pushes or nudges the public, the youth, and especially the intelligentsia to transactions in which the government and companies can log your every move, is exactly what they want.  Advertisers would be overjoyed to be able to hit your cell phone or tablet with targeted advertising as you walk or drive into any area in which they conduct business.    Big Brother will monitor you through your own portable devices and your digital wallet, and as long as you can get that Caramel Macchiato $1 cheaper, you won't seem to care.


Of course, a government's beneficence does not come without some conditions.  Specifically, whether Bitcoin likes it or not it will have to adapt or it will be legislated out of business.  I predict that one of the major banks will purchase Bitcoin, and buried deep within the terms and conditions you will find some fundamental changes at Bitcoin.  For instance, no more will transactions be guaranteed anonymity, this digital currency will also be regulated by the US Treasury, there will be certain transaction fees, and over time Bitcoins will be tied to something, perhaps not a physical product, but something that will stabilize its value such as the population of the USA.