The Story of Bitcoin

Bitcoin is on an upswing, both in terms of valuation as well as volume (see Bitcoin Report or Bitcoin Charts). But what are Bitcoins?

I first read about them from the Launch Newsletter L019: Bitcoin the P2P Currency. Most importantly the article said:

Bitcoin is a P2P currency that could topple governments, destabilize economies and create uncontrollable global bazaars for contraband.

The article provides a great overview and yes this system is really interesting. Another good one is in german from Der Spiegel.

There are a few problems though. Because bitcoins are theoretically anonymous (they can likely be tracked with some work), there is now a site where you can buy drugs, called Silk Road, run on TOR. Great writeup right here.

Now comes the bad side. Adam Cohen thinks it is a scam. He talks about a deflationary spiral, on which Bitcoin actually has a counter argument. The argument is also countered in the MIT Technology Review article titled: What Bitcoin is, And Why it Matters. Still Adam Cohen raises some very valid points in his Quora post.

For me it is still largely unclear of where this is going, but it surely is something to follow.

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