My man is in bitcoin.
(This post — in two parts — is actually a love letter, but first we need to go over bitcoin.)
I’m pretty sure I know what you’ve heard about bitcoin, if you’ve heard of it at all: it’s sketchy, it’s complicated, it’s like money but it’s not actual money. Skepticism is a virtue, most attractive reader, and you’re right to have questions about any Next Big Thing, but if you’re working with incomplete or incorrect data, skepticism can quickly turn into cynicism, and that’s no fun for anyone, especially you, five years from now, when you smack yourself in the head for waiting on the whole bitcoin thing. I am not a bitcoin expert, but I have been using and trading the currency for well over a year now, and I think I can break it down for you a little bit so that it’s not so confusing or scary. Because bitcoin isn’t either one.
* * *
Do you remember a time when we didn’t use credit/debit cards to pay for absolutely everything we buy? I do. I was in high school.
My favorite thing ever was to drive to this record shop in Des Moines to buy bootlegged Tori Amos concert recordings. They were thirty bucks a pop, which was way too much, but I didn’t care. I’d find the CD I wanted most and, if I had thirty bucks cash in my wallet from waiting tables at Pizza Hut, I bought my record. There were no transaction fees. My purchase was not recorded in the Big Data cloud. The guy working the counter couldn’t steal my credit card number when I left. And, very important: if I didn’t have enough money to buy my CD I didn’t get to buy it. In other words, the whole thing was a cash transaction, great for all kinds of reasons.
I’ll say this a few more times, so you’ll have time to let it sink in: Bitcoin is cash on the Internet.
Right now, to buy anything online, from a cool scarf on eBay to a magazine subscription to a small llama, airplane hangar, franchise, etc., you have to use a credit card. (PayPal is linked to your credit card and/or your bank account, so same thing.) Whatever, whenever, and wherever online you buy, because you have to use a card, you’re traceable, data-mineable, and vulnerable to identity theft. You’re paying fees, the merchant is paying fees, and you are more than welcome to go into hideous debt if you wish, since credit cards let you buy all kinds of things (including small llamas) without actually having the money to pay for any of it.
This is not good.
I don’t particularly like ceding so much financial power/intel to MasterCard, Visa, etc. Think about it: do you want MasterCard all up in your business? Is it okay they’re tracking your llamas? Nevermind the agony of stolen card numbers. It happens so often, now. It happened to me this past holiday season, with the huge Target security leak. I had multiple charges in Lithuania on my credit card statement — and I was not in Lithuania at Christmastime. Not cool, Status Quo, and it wouldn’t have happened if I had simply paid for my milk and my chewing gum with cash.
Remember: Bitcoin is cash on the Internet.
My darling Yuri is a visionary. He believes, as many people believe, that Bitcoin is the future of money, not just in this country but in the whole world. Because something must change.
The government bailouts of the banks, the financial industry scandals, the weird economy, the projected $9.1 trillion dollars Mister Obama is setting us up to owe in the next few years — this stuff concerns Yuri and it concerns me, too. The U.S. dollar isn’t pinned to gold anymore, you realize: ours is a fiat currency, a monetary system that derives its value from government regulation or law. Pardon, but the words “value” and “government regulation” give me the willies when they’re in the same sentence. I’m a full-blooded American, what can I say? I’m into apple pie, eagles, and the government leaving me alone. All signs point to disaster with money being run like its being run these days, and as it gets worse, bitcoin will rise.
Bitcoin is a global, Internet-based currency available to everyone. Bitcoin with a capital “B” refers to the overall payment system; bitcoin with a lowercase “b” refers to the monetary unit. Bitcoin is considered “cryptocurrency” because it uses computer encryption to secure transactions. That’s all the technical stuff I’m going to throw at you right now. Tomorrow, we’ll get into how it actually works, okay? Okay. You’re doing great! It’s all really new, I understand, but you’re very smart and you’ll be helping to explain bitcoin to your friends at bridge club before you know it.
And I haven’t forgotten the love story, don’t worry. You see, I met Yuri because I bought bitcoin from him.
*Dangerously close to discussing politics on PaperGirl. Exeunt! Exeunt!
That would be PRESIDENT Obama…. And you could always bury your cash in a mason jar (ohhh trendy!) in your Armageddon survivalist bunker.
Can you tell I’m as sarcastic as they come? 🙂
Never heard of it, but I did a search after reading your blog and most of what I read was pretty negative and scary sounding. The latest report I saw had Fox News reporting that the Department of Defense is going to study bitcoin as a possible terrorist thread. I’ll be back tomorrow to learn more from you.
Last time I looked, the dollar wasn’t supported by gold and mason jars full of gold and silver have always been a good thing, and in the case of a dollar that will inflate till it pops like a balloon from the dollar store, might be a most excellent idea. I might try some of these Bitcoin too.
Interesting … I’ve been reading about bitcoin for a while and this is the best “explain it to me like I’m five” explanation I’ve read. I still don’t understand it how it’s used as payment if there is no transaction proving it’s yours, but hopefully your next post will clear it up for me. I’m finally starting to get it now.
Mary Paulger MaryP
This link to the Guardian Newspaper website UK:
OK, deep breath, I am always into learning something new.
Anniversary Eve. | Mary Fons
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