Just because we can do something, should it be done? Satoshi Nakamoto perhaps should have thought about this before inventing the controversial “Bitcoin” in 2008.
How are Bitcoin’s changing IT?
Bitcoins are a new kind of currency that bypasses the banks and is more peer to peer. IT professionals should be worried about the ethics of such applications since we are the ones that build, link and install applications, and we have a responsibility to keep the trust of the public. Bitcoins are a new digital paradigm for the financial business segment. Users are anonymous but tracked. The value of the bitcoins is based on “miners” and the computing power they contribute.
One source from NetforBeginners says, “This very prohibitive hardware requirement is one of the biggest security measures that deters people from trying to manipulate the Bitcoin system.”
The same source explains that police cannot track this money. “Indeed, Bitcoins have become a tool for contraband trade and money laundering, precisely because of the lack of government oversight. The value of Bitcoins skyrocketed in 18 months because wealthy criminals were purchasing them in large volumes.”
But this isn’t the main reason IT should be worried. IT quite regularly enables new paradigms. Everything from music distribution to taxi service has changed because of new ways of working enabled by our technology. The key is to be informed about the changes. And in this case all the users are told there is no insurance and no backup of this currency. If your hard drive crashes, your money is gone.
In this way it is very similar to cash. Police can’t track it, and if your wallet is gone, so is your money. We would never think to object to cash even though criminals find it very convenient.
Of course, there is no gold to back this cash. The concept that the money is based on the computing power of miners is very interesting.
So what’s the problem?
My concern is regarding the “prohibitive hardware requirement” that one day will be quick and easy to find on the next desktop due to Moore’s law. One hopes that the designers have factored this into their system.
Whatever problems this currency may have will not just reflect on those designers, but the public will not understand where the network stops and this currency begins. They will see the problems and believe all electronic transactions could have similar problems.
IT will soon be getting requests to add Bitcoins as an option for their financial payment systems. At least 10 big sites like Overstock.com already accept them. As we add this option, we need to include warnings to ensure people understand the risks.
Is there something else we can do to make sure the paradigm shift succeeds? How can we avoid being painted with the same brush if they fail?
Leave your comments and suggestions below!