What is Bitcoin?
Bitcoin is a distributed, peer-to-peer digital currency that functions without the intermediation of any central authority.
History of Bitcoin
When I first heard of Bitcoin (from a friend with a little too much time on his hands), it was in the context of the deep web. He explained to me that this digital currency was very valuable and could be mined like explained in the video above. He further explained that it was used to make purchases on a layer of the web hidden below the surface, that needed special programs to be accessed, called the deep web. The idea can be difficult to grasp, but is analogous to the model of the layers of the earth, as depicted below:
In most layers, an anonymity service called Tor is needed to access content. The deep web is filled with things that a lot of people definitely don’t want to find anyway – illegal drugs, weapons, and hit men (all bought with bitcoin). Most recently, a site called the Silk Road has been in the news for it’s closure and arrest of it’s creator Ross Ulbricht on the charges narcotics trafficking, money laundering and placing hits on two individuals associated with Silk Road.
Bitcoin for the future?
I first learned about bitcoin when it was being used to buy services mentioned above, so I was shocked when I read the article talking about it being used at a coffeeshop and yoga studio (very vanilla institutions compared to the deep web, right?), and even more shocked by the claim that it could replace traditional monetary transactions.
In my opinion, at least for now, the bitcoin may just be a fad. I think that because of it’s past, it will be hard to convince many consumers to use it and it will be hard to integrate into society. Its newness and lack of regulation are attributes that I am sure many will have a hard time looking past.
So why does this matter?
The bitcoin is definitely a player to keep an eye out on. Payments are being made available sans paper and plastic with Google Wallet’s Tap to pay feature on Near Field Communications (NFC)-enabled phones, LevelUp’s scanning code, or Squares picture matching. Consumers are definitely ready to switch from traditional payment methods, and those who are there to be a part of this evolution will have a real advantage, whether they are on the technology side enabling the transaction, or the business accepting it.
In the end – Digital currency like bitcoin is a fairly fresh topic in the grand scheme of the technology age and so is moving away from traditional forms of payments. Could moving payments and currency online mean more data for marketers to sift through? We should be looking into what these things mean for marketers and for society as a whole. I can possibly envision the development of “personalized digital wallets” complete with everything from accounts to personal demographics to pictures of your family and S.O. (pictures in the metaphorical sense, like informational data snapshots about the more personal aspects of your life).