Today’s blog post is by Dr Kevin Curran, a senior member of the Institute of Electrical and Electronic Engineers, Reader in Computer Science at Ulster University, as well group leader for the Ambient Intelligence Research Group. Author of over 380 published works, Dr Curran has made significant contributions to advancing the knowledge and understanding of computer networking. He is perhaps most well-known for his work on internet security. Below, he gives us his thoughts on Bitcoin.
The State of Bitcoin
Virtual currencies have actually been around since 1996 when E-Gold let users open an account with a value denominated in grams of precious metals.
A number of copycats emerged including WebMoney which has over 25 million users.
The one most likely to dominate however is Bitcoin which is a decentralised, peer-to-peer payment network that is powered by its users with no central authority or middlemen.
Bitcoin for instance was designed specifically to provide transactional anonymity.
There are of course perfectly legitimate transactions conducted with Bitcoin and its integration into mainstream society is increasing each day with newer traders accepting Bitcoin and Bitcoin ATM’s popping up.
The reason for its popularity is due in no small way to the ingenuity of its underlying framework.
It keeps a publicly accessible ledger of all transactions where all transactions are confirmed and added to this ledger through the Bitcoin mining process.
This public ledger prevents the dreaded ‘double spend’ which has afflicted many previous attempts at creating a usable virtual currency.
What is really clever however is that there is no way to associate an address with any other address in the Bitcoin network so people can remain anonymous.
The separation of virtual currency accounts from real-world identities, along with the ability for an individual to create an arbitrary number of accounts enables the development of novel, complex layering transaction patterns and any Bitcoin user can create any number of addresses that they wish to.
Buying, selling, storing of bitcoin is still beyond what we can reasonably expect the public to understand.
That should change however with new layered solutions which make it easier to buy and use bitcoin.
Most technologies become more user friendly over time so that is to be expected of a new mode of currency such as Bitcoin too.
There are worries too that the majority of the coins at this moment are owned by Chinese and other anonymous Eastern individuals. That is a block for some Western financial corporations to throw their weight behind it.
Banks of course also for the most part need to know who the transacting parties are so the anonymity makes this impossible for now. If there is money to be made in the future, watch them suddenly change this modus operandi. Virtual currencies are here to stay