Hey, Can I Borrow Some Coin?

I stumbled upon an article the other day in the technology section of Bloomburg Businessweek regarding virtual currency. Now virtual mula isn’t anything new. Folks familiar with Linden Dollars in Second Life will attest to that, but this type of virtual currency was entirely new to me.

It goes by the name of bitcoin, a peer-to-peer virtual currency, which has grabbed a lot of attention from folks looking for an alternative way to purchase or sell their goods and services. It has also gained popularity as an investment. Interestingly, its value fluctuates with demand. The article mentioned Mike Caldwell, a small business owner, having purchased $20,000 worth of bitcoins and selling them five months later with a gain of more than a 1,000 percent return on his investment!

The main appeal of bitcoin is that it is untraceable with no banks or third-parties involved, meaning no fees per transaction, similar to dealing in cash. But just like cash, when it gets lost or stolen it is very difficult to retrieve. There has been negative attention with a recent hack attack resulting in theft of the bitcoin online currency.

There are currently many sites and businesses that accept bitcoin as payment. One has to wonder if bitcoin or something similar will one day be the currency that is widely used between virtual environments and the “real” world. Although we are still far from doing away with tangible, physical money altogether, it is interesting to see what the future might hold in terms of virtual currency. Only time will tell.

– Isaac Wong