What is bitcoin?
It was bound to happen. With the abundant use of the adjective “virtual” attached to real nouns associated with the Internet and technology in general it was just a question of time before we would have a virtual currency.
Bitcoin is a peer-to-peer electronic money and payment network introduced in 2009 which invokes various cryptographic strategies to provide security to transactions. I will not even attempt to explain these strategies because quite frankly I don’t fully understand them myself.
Since bitcoins are not something you can jingle in your purse or pocket or plug into a vending machine, I think one way to understand this modern phenomenon is to think “barter,” an ancient phenomenon.
When traders from Europe first encountered native North Americans they traded a handful of iron nails for a stack of beaver pelts.
Obviously there was no real currency as we know it that changed hands, but from each party’s perspective there was equivalent value in what was given and received. Since there was no cash register or credit card system to record the transaction automatically it was essentially an honour system, although over time much of the “honour” was taken out of it.
So if, over the Internet, you and another party can agree that the value of an article or service is so much bitcoin, the transaction can be consummated when you transfer electronically the funds from your virtual wallet to the other party’s or vice versa. The bitcoin network records the details of the transaction and assures its veracity and security. It also keeps track of how much bitcoin is in each of your wallets. Done deal!
The Vernon PC Users’ Club meets the second Tuesday of the month at 7 p.m. at the Schubert Centre in the cafeteria. Please call Betty at 542-7024 or Olive at 542-8490 for more information. New members welcome.