Bitcoin, the two sides of the cryptocurrency

Monday, 26 june 2017 | Redacción CEU

Bitcoin is the cryptocurrency par excellence. Have you not heard of it yet? For some, it is the opportunity to revolutionize the financial system, for others, a passing trend that can bring very negative consequences for the world of finances. Who is right? Could bitcoin really become the currency of the future?

Since money became our currency of exchange, it has always had someone to back up its value. Otherwise, how were we going to exchange fifteen sheep for twenty pieces of metal? That was where the figure of the ruler, sovereign or supreme leader appeared. It was necessary that someone gave value to that currency or its exchange would not make sense. Later, the role of the intermediary, patron or oligarch came into game to support exchanges, make loans and, in the end, turn those coins into papers that were valuable for the whole world. We could talk about history of the economy for a long time, but to save the speech, today these roles are played by governments and banks, the two pillars of the monetary system. But, what if are they no longer needed? Are we at the threshold of a new system?

The paladin of the financial revolution

Over the past few years, a multitude of criptocurrencies have appeared. No doubt, on the top of the list is the bitcoin, a young knight –he is only eight years old– that gets into one of the most hostile and complex territories of our enormous planet, the financial world –unfortunately, money and war have always been linked–. For many people, bitcoin is an undecided warrior with little strength. His courage and boldness at the beginning of the battle will not compensate for the lack of depth and constant hesitation that he experiences. For others, he/she is an invincible paladin who has come to stay, conquering and expanding a new financial system.

This cybercurrency has a great attraction, its decentralization. The virtual coin does not need any government to back it up, nor to control it. But not only that, it does not need a third actor either. The role of the intermediary can disappear because bitcoin works thanks to an open protocol that is based on the blockchain, a database distributed and with a source code that anyone can read, designed so it cannot be modified –here is where the enthusiasts of the criptocurrency jump of joy–. Out of controversy, what is clear is that the entrance of bitcoin into the market has been very strong. The numbers are bullish and their exchange does not stop growing  –at the time of writing this article its value is almost by 2600 dollars per bitcoin–.

Should I throw away my wallet and invest all my money in bitcoins?

With bitcoin, a cellphone with Internet connection becomes our bank. The technology replaces the third parties of trust, banks and bankers –who kindly provide us this service for money–. Times are shortened, shares are transparent and you do not have to wait two days for a transaction to take place between two accounts. So... it seems like a wonder! But just by entering a little in it, you will realize that there are all kinds of opinions about this subject. The debate runs a wide spectrum. Some have even pointed out that there are nonhuman forces behind the appearance of this currency. Others would invest until the last cent of their savings in the virtual currency. As the debate is wide, this is a summary of the two sides of the coin.