If you’ve spent any time online since 2009, it’s likely you’ve heard of Bitcoin. While confusing and opaque on a cursory glance, it represents something unique and totally new – a digital-only currency that can be traded with confidence with no oversight by a regulatory authority.
Previously an underground sensation, Bitcoin and its ilk – collectively referred to as cryptocurrency – have exploded onto the mainstream. With Bitcoin futures trading beginning this month on the Chicago Mercantile Exchange – one of the world’s largest derivative exchanges – the future looks even rosier for what was just seven years ago a tech demo. In this blog, we’ll look at why cryptocurrency in general has such a hype around it and examine what the future could hold for Bitcoin and its contemporaries.
A new way of doing things
Fundamentally, cryptocurrencies represent a complete break with traditional methods of creating and managing money in a community. Most banking systems are highly centralised, relying on a single government body or corporate entity to control the supply of new currency by printing and destroying physical cash.
Bitcoin became such a sensation because it was the first decentralised cryptocurrency – no one organisation or individual was responsible for determining how much money was floating around in a community. Instead, units of currency are created at a pre-determined rate by the entire system – the network of computers running the relevant software – working together. This has made it an attractive prospect for many users who are suspicious of the fluctuating and arbitrary value of fiat currency as set by governments and supernational monetary bodies.
The wild west
Apart from those interested for political reasons, cryptocurrency excites people simply because it is so new. This is currency without any external reference point – instead of being backed by a gold standard or by the power of a government (as with fiat currency), cryptocurrency’s values fluctuates based on the number of users, the number of merchants who accept it and the current demand for it. With Bitcoin only increasing in value and more than a thousand variations available, it’s an exciting time to be looking at cryptocurrency.
If you’re interested in Bitcoin and would like to get a qualification that could have you working in finance or IT, speak to the team at Skills Certified and have your experience recognised.