Tag: bitcoin

Bitcoin’s promise lies under the hood

Scandals may have bruised Bitcoin’s image and elicited growing calls for government intervention, but it has done little to mask the potential of virtual currencies and the promise behind Bitcoin’s underlying technology.

Bitcoin, the most popular among 200 or so other virtual currencies created since 2009, is an ingenious computer code that has monetary value controlled and stored entirely by computers. It is essentially a peer-to-peer cash system, a form of e-money, valued in units of Bitcoin divisible much like the Canadian dollar into pennies. It is not, however, connected to any physical commodity, state or central banking authority.

But more importantly, Bitcoin is also a payment system, a peer-to-peer network that allows for the proof and transfer of ownership without the need of a trusted third party like a bank. The implications are enormous, particularly for the financial sector, with a growing number of observers going so far as to describe the technology behind Bitcoin as disruptive as the personal computer was when it surfaced in 1975 and the Internet in 1993.