Another alternative to official, government sanctioned currency is the largely anonymous, distributed, and digitally-based cryptocurrency. Unlike other forms of digital currencies (such as gift cards, for example) cryptocurrencies exist in a decentralized digital environment and are not controlled by a central authority like a government or corporation. Cryptocurrency values can go up or down, like official money, as they are traded on digital exchange platforms.
Bitcoin
Prior to the birth of cryptocurrencies a computer engineer, Wei Dai published a paper in 1998 in which he discussed the concept of what he called B-coin. It would be another 10 years before Bitcoin was developed. No one knows who developed this digitally based currency. The developer or developers of the open-source software were only known by the pseudonym Satoshi Nakamoto. Since its introduction in 2009, there have been a number of similar cryptocurrencies developed and in use today. Some of the better known alternatives include Ethereum, Tether, Chainlink, Litecoin and others. In fact, there are literally hundreds of versions of cryptocurrencies in use today. These digitally based currencies share one key difference with official currency: there are no banks involved with these anonymous transactions.
Cryptocurrencies can be purchased on exchanges or individuals can “mine” them. However, mining is an expensive and time-consuming process that requires in some cases a significant investment in computing hardware.
The movement of cryptocurrencies around the internet, from user to user, miner to seller, customer to vendor would not be possible without a new kind of internet backbone known as Blockchain. Here is a brief video explaining Blockchain:
Blockchain was developed to facilitate the distribution of Bitcoin but it is now used in a variety of other applications as well. It can secure transactions in shipping, finance, contracts, and many more areas. It is even used to record people’s votes in elections. The USPS has applied for a patent to use Blockchain technology to secure online voting in U.S. elections.
Cryptocurrencies, and the technology that makes them work are still in the developmental stage and probably will be for some time. But they’re open source code, transparency, democratic structure, and security make them a tempting substitute to the predatory economic system to which the people of the world are now subjected.