Bitcoin by the people, for the people

Posted by Rob on 16 November 2013 | Comments

The foundation of any currency is trust. We accept payment in the currency that we use because we trust that other people will in turn accept that currency for goods and services.

Being someone who has traveled a fair amount and regularly travels internationally, I have used a few different currencies. I see money for what it is, a token I can used to fluidly exchange work I do for goods / services from someone else. I have no love of money itself other than the fact that I find it very useful and use it every day, much like everyone else. I dont give a crap what money I'm using either, If it doesnt have the Queens head on the notes, it means nothing to me. As long as me and other people can trust it enough to allow it to be a form of currency.

The trust for regular currency used to be in that it could be exchanged for gold. This is no longer the case. The trust in non-digital currency is that we trust that the issuing authority (normally the government). We trust that they are not going to go haywire and print heaps of extra notes (devalueing all the notes currently in circulation). Or that they are suddenly not going to go bust, and the notes would be then worthless.

The trust in Bitcoin and other distributed currencies is trust in the technology. We trust that the technology and the idea begind the currency is sound. The currency has value because of this trust and because of the extra benefits of a digital currency. If the trust is undermined by anything then the percieved value of the currency will drop.