Belfast Telegraph

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Future of Bitcoin could pay dividends

With new legislation recently announced by the Government, will measures to encourage safer use of digital currency finally bring the online payment system into the mainstream?

By Peter Jenkinson

It is easy to see why the Bitcoin currency hasn't found much favour among ordinary currency transaction makers (or 99% of the population). Headlines are only made by the dark and mysterious online-only digital currency when it has been behaving badly (read ripped someone off, accounts being depleted of said currency, and other unexplainable behaviour).

There have been an increasing number of online outlets and purveyors of technology that'll accept Bitcoin in exchange for goods and services, but without the major backing of a regulatory body the currency was always going to be viewed with that 'eyelids lowered' look.

Step up, then, a Government running for re-election and a Chancellor vying for the votes of a digitally savvy collective, and we have Bitcoin on the agenda.

Trying to take control would be a foolhardy project, as the essence of Bitcoin is that it is unregulated, or controlled by any central bank, or government. However, to make it more mainstream, it is going to have to abide by a rulebook of sorts.

The Chancellor may well be trying to score points in the run-up to the general election, but we still think this policy is one that his party should pursue with vigour - it taps into an audience not as yet engaged, and addresses an issue that a wider audience would be keen to understand.

Without doubt, the digital currency is going to keep existing - millions of pounds from a variety of investors have poured into various Bitcoin ventures these past months.

So a more formal footing needs to be found and, for once, this intervention from the Government should be welcomed.

Virtual money won't ever overtake real cash, but knowing that you can bypass banks, can't be taxed on your Bitcoin earnings, or can't have your assets frozen, is really quite interesting.

How online system works

Bitcoin is an online payment system invented by Satoshi Nakamoto who published his invention in 2008, and released it as open-source software in 2009. The system is peer-to-peer - users can transact directly without needing an intermediary.

Transactions are verified by network nodes and recorded in a public distributed ledger called the block chain. The ledger uses its own unit of account, also called bitcoin.

Bitcoin is often called the first cryptocurrency, although prior ones exist.

It is more correctly described as the first decentralised digital currency.

Belfast Telegraph