The Sunday Business section cover article in this week’s New York Times is fascinating. Entrepreneurs are investing in virtual mining operations across the world to mine for Bitcoin, a virtual currency that can be used for real business transactions and traded on several exchanges for real currency. Other articles have pointed to nefarious purposes for Bitcoin such as a means to fund drug dealing and hit man operations. The currency is unregulated and created anonymously. It has a finite amount of coins (21 million) that will eventually be released as powerful computers compete to mine for coins that are available on the open source market every ten minutes. About half the total are currently in use and the price per coin continues to rise from $20 in 2009 to over $1000 today. Volatility is high as threats to the network exist from governments like China. Nevertheless, the network is currently thriving and mining operations are attracting real capital.
Is Bitcoin a good thing or just another form of speculation and greed? I’m still suspending judgment!