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Growing Pains for the Bitcoin

SS6-28-13What would King Solomon think of the Bitcoin? That wise monarch, whose words of wisdom about money have guided many to prosperity, lived in a world where money consisted of gold, silver and other exchanges of physical things – a tradition that continues to this day. The upstart digital currency, the Bitcoin, aims to change all that. But in the four years since its creation, the Bitcoin’s rocky journey toward respectability suggests that more of Solomon’s favorite virtues, wisdom and prudence, are in order.

What’s a Bitcoin?
A while ago we brought you news about the Bitcoin’s sudden rise in trading. Created as a global digital currency that anyone could use, anywhere, Bitcoins are created digitally through a complex algorithm users apply. They can then be earned or bought with regular currency for use among retailers and service providers who accept them around the world. Bitcoin stock has taken a rollercoaster ride from a high of $266 to a low of half that, in 2013 alone.

Traditional financial institutions have taken a dim view of the virtual coins. “It’s not money,” snapped Forbes, and Huffington Post Finance predicted the Bit coin will never take off. But it continues to make inroad into transactions of all kinds. Enter the Bitcoin baby – a child born of an in-vitro fertilization procedure paid for entirely by Bitcoins.

The Bitcoin Baby
Dr. C Terence Lee, the California fertility specialist who performed the procedure is an ardent Bitcoin supporter who hopes to persuade all his patients to pay him this way. The “Bitcoin Baby” whose photograph appears on much of his advertising is the most public face of Bitcoin transactions which can cover most anything that two parties agree to buy and sell.

Dangerous Tweaks to the Code
But the dark side of Bitcoin technology raises concerns that haven’t been completely addressed. According to CNN’s latest update on Bitcoins, the online database, or “ledger” that tracks Bitcoin transactions can be accessed by any user with the computer skills to do it. And because Bitcoins are beloved by cyber-geeks and code lovers who tinker constantly with its algorithms to create more coins, the Bitcoin code has been tweaked repeatedly to inject personal messages and links.

Most of these have been benign or even comical, such as the portrait of Federal Reserve Chairman Ben Bernanke that emerges when certain bits of altered code are translated into text, or even statements like “I love turtles.” But recently the Bitcoin code became infected with a series of links to child pornography sites, which prompted an investigation by the US Justice Department and cast a shadow on the Bitcoin just as it appeared to be gaining more credibility as a legitimate currency/

Is the Bitcoin real money – or just an annoying upstart, as the traditionalists at Forbes and other financial sites would have it? In certain markets, the digital money is holding its own – and even advancing, as demonstrated by the presence of the Bitcoin baby. But the easy tweaking of its core code for silly – and serious = purposes also shows that the Bitcoin has some growing up to do.  (Top image: Flickr/Electric-Eye)

Sources:

Cowley, Stacey. “Meet the World’s First Bitcoin Baby.” CNN Innovation. CNN.com 10 Jun 2013

Hargreaves, Steve and Stacey Cowley. “How Porn Links and Ben Benrnake Snuck Into Bitcoin’s Code.” CNN Money. CNN.com 2 May 2013.

Solomon Success is your complete source for Christian financial advice. Read more from our archives:Bitcoins: A New Currency for a New Age?

Bullets: The Next Bubble About to Burst?

The Solomon Success Team

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