Photo by btkeychain courtesy of Creative Commons.
Rohan Jani / Contributing Writer
Bitcoin, the peer-to-peer payment system of crypto-currency, has garnered lots of attention from domestic international traders to students alike — most recently, the Feb. 10 crash of a Tokyo-based exchange system.
The program generally covers the field of cryptography and utilizes computer algorithms to create a network of finance for its users. Its software runs on built-in clients, allowing users to make transactions in and out of a server.
With digitally-signed messages moving back and forth through networks, Bitcoin consumers engage in “data mining,” which essentially means rewarding 25 of the digital currency “bitcoins” based on a set count of 10 minutes for each round of code injected into the system.
Joel Villasuso, a sophomore in computer engineering, commented on both advantages and disadvantages of the Bitcoin system. He said the program is helpful, but can cause stress on society’s ways of gaining revenue.
“You’re going to gain revenue, but anonymity is just as good, too,” Villasuso said. “You can pay off basically anything you want using Bitcoin currencies and the funds are appreciable without being known.”
He said it carries a negative outlook, however.
“It provides ‘mining’ tools which utilize raw computer power for profit, but it takes up lots of efficiency to keep programs running overnight,” Villasuso said. “Associated problems like overheating and theft from leaving devices idle can harm the system.”
Villasuso has used Bitcoin, but said he could never afford to buy anything. “I just wanted to get involved with the program and did lots of research on what customers do regarding Bitcoins in their possession.”
Villasuso commented on his willingness to use Bitcoin.
“It is pretty unstable. It isn’t worth my time just yet to invest any cash or make any transfers. I personally wouldn’t bother with Bitcoin until I see it expand in our economy,” he said. “Right now, it’s relatively new in the financial sector, and it needs to be reliable and secure.”
He said when it comes to the ‘electronic wallet,’ the values are the most important to consider.
“Deposits can be faulty or full of glitches, and can compromise user integrity when funds are being exchanged,” Villasuso said. “One group of people can take control over a thousand innocent users who don’t want to risk being hacked as well, making it completely unreasonable to invest time in Bitcoins.”
[pullquote]“Right now it’s relatively new in the financial sector, and it needs to be reliable and secure,” Villasuso said[/pullquote]
A fair chance of risk for Bitcoin users came to life earlier this month when Mt. Gox, a Tokyo-based Bitcoin exchange system, experienced a massive collapse earlier this month.
According to a report from the New York Times, a “fundamental flaw in a computer program” created a problematic withdrawal chain for its customers who used Bitcoin exchanges. One of the earliest leaders in the virtual currency realm, Mt. Gox created complications for itself in only a matter of time.
But Bitcoins still has its share of users and advocates, like senior international relations major Chris Keener.
He promotes open-source technology and social liberalization based on community-driven projects that run without much government interference.
“I personally believe in open, community-driven projects: the projects that fund without a central authority,” Keener said. “Participants without any financial restrictions can now see change that is successful in the Bitcoin perspective. As a participant myself, I can see that minimal government interference is necessary to stimulate the economy.”
Keener referred to the idea of black-markets as an “irrational fear of the unknown,” labeling such issues as only a small problem and tries to focus on foreign subjects to further his education, including several collaborators based out of China who help him in his “crypto-assignments.”
“Money disappearing from the economy would be a very big drawback, alongside money laundering and storing funds in offshore accounts, which are all basically bigger problems on the horizon, since it’s mostly obscurity and is very scary to picture,” said Keener.
Keener said that if all the funding of an entire system like Bitcoin were drained out or removed from authorization, most customers would face the penalty of losing any revenue gained from engaging in such behavior.
Renato Gonzalez, a senior studying international relations and political science, tried to gain experience in Bitcoin from Keener, his classmate.
“Bitcoin works, but with literally no accountability. It covers layers of encryption and makes it difficult to trace back to customers. I feel that if FIU decided to invest in Bitcoin operations on our campus, however, then I’d be interested,” Gonzalez said.
[pullquote]“If FIU decided to invest in Bitcoin operations on our campus[…]with FIU dollars converted into credits based on Bitcoin currency, I assume that it’s going to be successful,” Gonzalez said.[/pullquote]
“With FIU dollars converted into credits based on Bitcoin currency, I assume that it’s going to be successful,” Gonzalez said, who later pointed out that accountability is the major factor to debate on when it comes to identifying consumers of the market, especially students in this day of age.
Keener said he sees crypto-currencies as the new foundation for financial regimes.
Joshua Martinez, a senior in computer science with background in popular news and entertainment domain Reddit, is working on a crypto-currency project.
“I don’t see any reason or merit to be against crypto-currencies,” he said. “In the U.S. there are laws against this in general, but I am for Bitcoin and related services since online presence is very important. If it stabilizes correctly, then I am for the idea of crypto-currencies.”
Martinez noted that within six months of its birth, the Bitcoin system had about one million people using its services.
“It’s not about whether you should use it or not; that’s more of a counter-productive question,” he said. “You should know how the service works and how it regulates with everyone around you.”
To Martinez, people need to be enlightened on the topic before deciding on using a complex system like Bitcoin.
Meanwhile, Yuanyuan Fang, an adjunct professor of international political economy, said that function is key to Bitcoin services and argues that trading using Bitcoins is challenging, since the issue of liquidity is on the table.
“Investment is good, but with more alternatives,” Fang said. “There’s lots of manipulation and speculation that occurs when using Bitcoin.”
Fang pointed to emerging markets like those seen in Russia which recently banned such a system. “The fact that countries decide on banning and not banning crypto-currencies makes the whole thing complicated.”
Fang would not support the Bitcoin system at FIU.
“It’s pretty dangerous in this moment of time,” Fang said. “We have to wait and see how it develops over the next five years. It’s always best to see how things go before making a decision.”