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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 This was the killer app that no one has ever discovered.

Thus I had hoped for bitcoin to be when it first emerged. The One. In “Digital Gold,” his book about bitcoin’s origins, Nathaniel Popper Emails with quotes 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.

When I met a brilliant mathematician and cryptographer named “Alfred”, I was first introduced to digital currency. David ChaumElectronic cash, also known as e-cash, was invented by. 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 way ahead his time. He His company DigiCash was founded five years before either the creation or acquisition of either. Netscape, which popularized browsers, or Amazon. By 1998 DigiCash went bankrupt.

What Then came the short-lived “information wants to be free” era. NapsterFounded in 1999,, a peer-to-peer platform allowed 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 was born, but credit cards were the only way to pay.

As E-commerce was born, but credit cards were the only way to pay. 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 Your information would then be exposed to hackers if you did that. Electronic Both of these problems could have been solved with currency. If my children had access to a digital currency — maybe their allowance! — Napster They could have reached deals with record companies to charge for songs. They Would have happily paid. And E-cash would have made internet commerce almost frictionless. By 2000, the chief executive officer of an internet bank was speaking. “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 essentially accessed the bank or credit card account of the user to make purchases and 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 So, when we shop online, we still spend a lot of time filling in credit card information.

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 was used primarily for criminal purposes. In 2008, its founder pleaded guilty for money laundering.

According to the website,re 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 What if bitcoin prices rise by $500 in 10 minutes? Would you still use bitcoin to purchase? And Who would want to accept bitcoin when it could drop by $500 in the next 10 seconds?

Whatever Bitcoin, despite its original purpose, has become an asset that is only used for speculation. “There is simply no way to predict what it will be worth,” Pete Kight, “fintech” (financial tech) Investor who founded Checkfree 1981 That Its fatal flaw is that it is an electronic currency.

OrIt is, in fact, one of them. The Another flaw is the very thing that many of its adherents love about it: 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 seen as the digital equivalent to gold in the best of cases.

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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