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Not because I missed the great run-up (though I did) and not because I fear that the bitcoin bubble will end badly (it will, but that’s not my problem). Rather, it is because I have been waiting for decades for someone to invent a purely digital currency, a currency for online purchases that wasn’t linked to a credit card. It The killer app that no one had ever discovered was this.

Thus When bitcoin was first discovered, I hoped that it would be. The One. In “Digital Gold,” his book about bitcoin’s origins, Nathaniel Popper Get quotes by email Satoshi Nakamoto, the cryptocurrency’s mysterious and possibly apocryphal inventor, “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”

That’s how all the early bitcoin enthusiasts thought of it a currency, one that allowed consumers to buy things.

That’s how all the early bitcoin enthusiasts thought of it — a currency, one that allowed consumers to buy things while sidestepping both the banking system and national governments. What The bitcoin bubble is a sign that bitcoin is not a successful e-currency. But I’m getting ahead of myself.

I first became interested in digital currency during the mid-1990s, when I met a genius cryptographer and mathematician named David ChaumHe had invented electronic cash, or ecash. It did exactly what bitcoin purports to do — allow people to use virtual money, stored on their computer, to make purchases and send money to other people.

Chaum He was a man who was far ahead of his time. He His company DigiCash was founded five years before either the creation or acquisition of either. NetscapeThe browser was popularized by, Amazon. By 1998: DigiCash went bankrupt.

What Then came the short-lived “information wants to be free” era. NapsterThe 1999 startup of, used peer to peer technology to allow music lovers to illegally download songs. Newspapers didn’t have paywalls, and many people came to assume that news shouldn’t cost anything. I saw my own children downloading music and even movies, and when I would tell them they were violating the law, they would tell me I didn’t understand how the world worked in the internet age.

As E-commerce became a reality, and the only method of payment was a creditcard.

As E-commerce became a reality, and the only method of payment was a creditcard. It It was a real commercial friction point. Every time you wanted something to be purchased, you had your credit card information and your billing address. And, if necessary, your shipping address. And Once you have done that, hackers would have access to your information. Electronic Both of these problems could have been solved with currency. If my children had access to a digital currency — maybe their allowance! — Napster Could have made deals with record companies and charged for songs. They I would happily pay. And E-cash would have made it almost frictionless to do internet commerce. By 2000, the chief operating officer of an online bank was saying “We’ve reached the point where the internet economy needs e-cash.”

It It has never happened. InsteadEntrepreneurs and companies devised a number of workarounds. Some were better than others. The Most well-known is PayPal, which basically accessed your bank account or credit card account to make payments or send money. Apple And Amazon It is much easier to purchase things. Washington Post Subscribe, I hit the “Amazon Pay” button and it’s done. Even Even so, it is still a time-consuming task to fill out credit card information online when we want something.

MeanwhileEvery attempt to create an electronic currency failed. I can recall one called Qpass Another is called WebPay. In In the early 2000s, egold was seen as a possible solution. But it turned out that it was used primarily for criminal purposes. In 2008, its founder pleaded guilty for money laundering.

According to the website 99bitcoins.comThere are 89 companies that claim to accept bitcoin as currency, including Subway, the Massachusetts Institute This is Technology bookstore, and Museum You can find the Coastal Bend In Victoria, Texas. But I can’t imagine anyone actually using it to pay for something. Who Would you use bitcoin to make a purchase if it could go up $500 in the next 10 mins? And Who would want to accept bitcoin when it could drop by $500 in the next 10 seconds?

Whatever Bitcoin was originally intended to be a speculation asset. “There is simply no way to predict what it will be worth,” Pete Kight, “fintech” (Financial technology) Investor who founded Checkfree 1981 That Electronic currency is its fatal flaw.

OrThat is not the case. The The other flaw of the system is its very essence, which many people love. It operates separately from the government’s fiat currency. “I call it the tyranny of brilliance,” Kight. “When you work in fintech, you often see engineering genius get out of synch with what works in the real world.”

In He said that bitcoin was an example of this: “There is this thing called the Federal Reserve. Its first job is to protect the financial system of the United States. For a cryptocurrency to be successful, it has to work out with the Fed how it won’t undermine the banking system.”

I can see bitcoin being traded even after the bubble bursts. Maybe A few other cryptocurrencies may follow similar trajectories, but most will eventually dissolve into nothingness. It can be seen as reflecting the larger economy in some manner, rising in certain environments and plummeting in others. In Bitcoin could be considered the digital equivalent of gold in the best possible scenario.

There’s nothing wrong with that. But we’ll have to wait a little longer for an electronic currency that works.

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