Wednesday, September 24, 2014

Week 2 Assignment: Bitcoin

Bitcoin is a digital currency that can currently be purchased online for $434.11. This certainly seems expensive for a piece of computer coding, right? Actually, the U.S. dollar per Bitcoin exchange rate is significantly cheaper than just a few months ago. Many people are unfamiliar with Bitcoin and how it relates to the current Information Society. To me, it resembles massification in the sense that currencies have been removed from the gold standard and put into printed paper for sometime, yet someone had the idea that paper is outdated and digital currency is the newest innovation. Essentially, Bitcoin was introduced and made relatively popular in 2009 as an open source software. Under this current system, people can "mine", or earn, Bitcoins by simply being literate in computer programming and auditing past Bitcoin transactions. The more time spent confirming a Bitcoin's legitimacy, the more Bitcoin's you can earn.

The idea of "Bitcoin" as it is known today can only date back to its invention, but tracking databases of newspapers provides a solid ground for reflection on the evolution of the phrase. The first use of the term in the New York Times, for example, can be traced to an article written in 1898 expressing the exchange rates between colonial bits, schillings, American dimes, and "half-dimes." This exemplifies the shift from antique metal money to paper money (made popular by the culture of print), and the following shift of paper money to digital money that we see in today's Information Society. It seems as if the power of information backing a currency now exceeds the power of metal: especially since the United States untied the dollar to gold in the 1970's.

I think the etymology of today's Bitcoin is highly relatable to our discussions in LIS 201. An interesting topic to consider is the disappearance of $480 million worth of Bitcoin's from Mt. Gox, the world's largest Bitcoin exchange which subsequently filed for bankruptcy. Is our Information Society mature enough to securely handle such a digital currency? I am skeptical.

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