Six Things You Didn’t Know about Cloud-Currency
News broke recently about a massive securities failure at leading Bitcoin currency exchange MtGox. Formerly the world’s largest Bitcoin exchange, MtGox filed for banckruptcy following a combination of inexperience, gross mismanagement and criminal negligence that saw hackers steal $460 million from its accounts.
With the future of cloud-based crypto-currencies now firmly under the spotlight, we take the opportunity to look back at six little known facts about the online phenomenon.
While the popularity of Bitcoin has been rocketing in the West, the attraction of an online digital currency wasn’t so attractive to lawmakers in Thailand. In July 2013 the South-East Asian country became the first jurisdiction in the world to ban it, citing a lack of regulation and capital control.
2. Mining in the Cloud
‘Mining’ is the term given to receiving Bitcoins as payment for allowing your computer’s processing power to be used to maintain the company’s software. Cloud mining is a new concept that allows users to form groups and complete all their mining in the cloud via massive data centres, rather than using their own equipment. This removes frequent mining issues such as connectivity problems, electricity consumption and hosting difficulties.
3. Bitcoins vs Gold
Not many things in the world are worth more than gold, but Bitcoin achieved this distinction in November 2013 when a single unit of the crypto-currency was briefly more valuable than an ounce of the precious metal.
Bitcoins are more akin to a finite commodity than a currency. Only 21 million Bitcoins are ever going to be made available, leading to a high risk of deflation if the cloud-based money becomes widely adopted as a payment method. Although the release of Bitcoins is designed to continue for a long time, in practical terms the supply will start dwindle rapidly around 2028.
5. Satoshi Nakamoto
Purportedly the founder of Bitcoin – no one knows who he is, his nationality, or if ‘he’ is actually a group of people. Satoshi and his group have had no involvement with the currency since 2010 – yet are believed to be owners of more than 1 million Bitcoins, an amount equivalent to 1.1 billion USD.
6. One of Many
Although it is the most well-known, Bitcoin is not the only crypto-currency available. Competitors include Dogecoin, Litecoin and Namecoin, and each have alternative benefits with different operational methods.
What do you think is the future of cloud-based currencies? Is crypto-money here to stay, or is it a passing fad with no real value? Let us know in the comments below…
By Daniel Price
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