In the year 2007, a persona going by the name Satoshi Nakamoto began working on a “peer-to-peer electronic payment system.” Though he is said to reside in Japan, many speculate that Nakamoto is actually not one man at all but rather a pseudonym for a group of people.
Less than a year later, on August 15, 2008, three individuals – Neal Kin, Vladimir Oksman and Charles Bry – filed an encrypted patent, denying any connection to Nakamoto. Three days later, the domain name Bitcoin.org is anonymously registered and the world’s first decentralized cryptocurrency was born.
Since then, hundreds of cyber currencies have popped up all over the web as developers seek to capitalize on the success of the bitcoin. In fact, at last count there were more than 530 cryptocurrencies available for trade in online markets as of January 2015 and more than 740 overall.
However, only a handful have market caps over 10 million:
- Bitcoin ($3,158,237,178)
- Ripple ($252,830,918)
- Litecoin ($53,893,032)
- Dash ($14,413,634)
- Stellar ($12,995,587)
- BitShares ($11,724,987)
- Dogecoin ($10,549,997)
- MaidSafeCoin ($10,194,693)
Though the bitcoin still dominates the cryptocurrency world, prices have been steadily declining since its peak in December 2013, when market shares reached an all-time-high of USD $1124.76 per bitcoin. As of Friday, April 20, the bitcoin rested at $225.
What is cryptocurrency?
According to CryptoCoinNews:
A cryptocurrency is a medium of exchange like normal currencies such as USD, but designed for the purpose of exchanging digital information through a process made possible by certain principles of cryptography… Put another way, cryptocurrency is electricity converted into lines of code with monetary value. In the simplest of forms, cryptocurrency is digital currency.
Cryptography is the complicated process in which digital currency is “mined,” and involves significant time, computing power and specialized open-source software.
Watch this video to learn more about bitcoin mining:
Will digital currency survive?
Whether the bitcoin and other cyber currencies last long-term remains to be seen. Undoubtedly, the future of cryptocurrency will be determined in the years ahead. Regardless, for now, investors can use this new form of currency to purchase physical precious metals like gold and silver – the oldest forms of currency on Earth and the best long-term investment around.
Provident Metals now accepts Bitcoin, Dogecoin and Litecoin for payment on all products found in our online store, including gold bullion, silver bars and coins and more.
When the Dogecoin community began asking for the option to buy precious metals with their preferred digital currency, the company realized that, “… it was time for us to recognize the effect cryptocurrencies are having on the marketplace,” said Provident Metals COO, Jake Haugen.
To learn more about using cryptocurrency to buy gold and silver bullion, feel free to contact us or browse our site.
Do you think cryptocurrencies like the bitcoin are just a fad or here to stay?
Let us know in the comments below or by visiting us on Facebook and Twitter.
If the future is a continuation of the past with continuing economic growth for many centuries to come, then I would favor bitcoin over precious metals. However, if the future happens to be the opposite of what most people expect to happen, with further restrictions of individual rights in the name of national security, with continuing financial crises, budget deficits, growth of debt levels, then securing individual savings against overreaching taxation and theft will continue to grow in importance. I believe it is easier to hide small amounts of precious metals effectively than to keep information private on the internet. As long as the power of the NSA is unchallenged, the security of crypto currencies is an illusion.
The future of cryptocurrencies depends on the the future of the internet, the future of computers and most of all, the future of electricity. The bulk of electricity is generated today by burning fossil fuels – a finite resource on this planet. The remaining reserves of fossil fuels may not last centuries perhaps a few decades only. In third world countries, people are used to the idea that electricity is available only for a few hours a day on an erratic basis if at all. Renewable energy (solar + wind) is not likely to generate enough electricity in order to continue business as usual. For that reason, the future of the internet as a reliable means of transporting information is by no means so clear. If I would have to place a bet, I would bet in favor of precious metals as a means to store capital long term. That is perhaps the main point about about precious metals: They persist in time. Computer hardware fails eventually. The internet is subject to incalculable risks like power failure, government intervention, fraud due to buggy software, hacking, viruses etc etc. In comparison, precious metals are very simple objects and that explains why they have survived the test of time. Precious metals represent pure simplicity. Crypto currencies are at the opposite end of the spectrum: extremely complex. Most people are incapable to understand the mathematics behind the encryption algorithms and that is one further risk. Every body can understand gold. Only few can fully grasp the details of the algorithms underlying bitcoin.
Investment is pouring into the technology of crypto currency and also the Bitcoin market. Prices have stabilized as institutional investors quietly accumulate. Right now it is slightly less expensive to buy metals by check or wire transfer than to pay the fees associated with buying bitcoin. Bitcoin purchases are also likely to receive greater government scrutiny because it is relatively new and perceived to be a tool of privacy. Bitcoin has a good future, but at the moment it seems quiet as big investors prepare for the next phase.
Crypto currencies might be the future of commerce, but only if governments play the biggest roles, which goes directly against why they were introduced in the first place. As commented previously, governments used centralized backs to manipulate the markets and in turn the populous as well. Until governments find a way to regulate, thus control these crypto exchanges, they will use their powers to destroy them as they already have in some cases. Also at this time the technology itself is flawed, with fraud and theft being common and nearly untracable, it would take quite a bit of consumer confidence for this method of payment to become prefered by the masses. It would take a major player to push the public into this change, someone like Amazon or Apple, but they have their own ideas on alternative payments. Will bit-coin and others like it take hold? I don’t see it happening any time soon, but I’m also a never say never kind of person. Until then, I’ll keep stacking precious metals, real tangible wealth.
Digital currencies are going to stay only if they are modified in such a way that governments are given a backdoor option in order to maintain control of the money circulation. The power of government is resting on government control of the banking sector. Take that control away and government collapses. That is not going to happen. To many people depend for their survival on the taxing power of government.
Cryptocurrencies and the technology isn’t going anywhere.
There are only 7 Metals of Antiquity. All told, there are 110 total metals.
However, there can be an infinite number of cyber currencies.
The “value” of the bitcoin currency was not in the limitation of mined number of coins but in its unique service. However, Bitcoin is no longer unique and can be cloned to infinite.