Kevin Harrington

Bitcoin P2P Virtual Currency

bitcoin

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Kevin Harrington

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Should we be worried when alternative, unregulated, currencies are created? Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network.

Concerned? Well I think we should be. Like all these things we should learn about them first. Here is a good place to start: http://en.wikipedia.org/wiki/Bitcoin

Come back here with your thoughts after you’ve read the Wikipedia entry.

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Kevin Harrington Partner
Kevin Harrington is a Partner at Exit Factor UK, helping SME owners increase business value & build a rewarding, well-planned exit. Former CMO at BBC Worldwide.
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Comments

4 responses to “Bitcoin P2P Virtual Currency”

  1. Anony Mouse

    Can you be more specific why you feel we should be concerned?

  2. Kevin Harrington

    Thank you Anony Mouse for your comment/question.

    I think there are a number of concerns. At the top of my pile would be consumer/user financial security. Let’s imagine Bitcoin gains more users and some people end up being paid regularly via Bitcoin and have a large credit balance. Where is the safety for the that individual if Bitcoin was to go out of business? In the UK retail banking customers have guaranteed protection.

  3. julz

    “Where is the safety for the that individual if Bitcoin was to go out of business? ”

    If *who* exactly goes out of business?

    You’re correct that there are risks which are different compared to those in the traditional banking sector – but there is no company that the Bitcoin network is dependent upon in order to keep working.
    There are various secure ways to hold a Bitcoin balance – but even if Bitcoin becomes popular, you don’t need to hold large sums in bitcoin in order to benefit from it. Much of it’s advantage is just as a globally usable mechanism for secure value transferal over the internet – not just to merchants and financial services, but between individuals. Many merchants for example might choose to accept Bitcoin payments from anywhere in the world but immediately/automatically convert to their local currency (There are already services to allow merchants to do this). Consumers might generally keep a small balance on their mobile phone – much like you’d only carry a certain amount of cash in your pockets.

  4. Mark Kusionowicz

    Kevin,

    We have also blogged on this concern – seems like we have similar views:
    http://www.the-logic-group.com/blog/2011/11/14/DigitalCurrencyAreWeTryingToHaveOurCakeAndEatIt.aspx

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