How the UK Embraced Cryptocurrency
While it might be something that’s only just become a part of the public’s vocabulary, alternative currencies or ‘cryptocurrencies’ like Bitcoin, Ethereum, Ripple, and Litecoin have been around for some time, albeit deep in the basement of the internet, and used only by a particular breed of computer-savvy individual.
It all began in 2008 with a mysterious person (or group of people) called Satoshi Nakamoto, who published a design paper entitled “Bitcoin: A Peer-to-Peer Electronic Cash System” via a mailing list dedicated to cryptography. Eight years later, that design paper is the archetype for all 646 cryptocurrencies currently in circulation.
But can you actually spend it anywhere or is cryptocurrency just a passing fad?
Bitcoin and Outer Space
Cryptocurrency is in its prime. Bitcoin’s value has been hovering around £513/coin for the past few weeks, a high not seen since August, and the list of companies accepting the currency in particular is growing, reaching 100,000 worldwide in 2015.
Microsoft and Dell were some of the first major firms to jump on the Bitcoin bandwagon. One of Bitcoin’s most famous advocates, Sir Richard Branson, will even take you to space and back for 398 Bitcoin or £204,000. Casino and iGaming websites were arguably the trailblazers as far as adoption is concerned, however. The casinos listed on BitcoinPokies.com, for example, accept the currency exclusively.
Acceptance is not just the domain of websites and major corporations. In Kent, for example, you can pay for items at water solutions shop StopLeak with bitcoin, or even use the currency to book driving lessons at Lee’s Driver Training in Maidstone.
Oddly enough, the two biggest Bitcoin havens in Britain aren’t even on the mainland. Jersey, which has 16 places to spend the currency, recently passed legislation to regulate Bitcoin in advance of its future growth, while the Isle of Man has 25 Bitcoin-accepting businesses working to establish the island as the centre of the world, at least as far as cryptocurrency is concerned.
However, it’s not just the Bitcoin token itself that is important; in fact, the Bitcoin is arguably the by-product of a far more significant development in cryptography – ‘blockchain’ technology. Created by Nakamoto, blockchain is a revolutionary encryption method that is almost immune to tampering, fraud, and counterfeiting.
How does it work? Imagine a book of every transaction ever made in Bitcoin. Now, duplicate it so that you have lots of identical ledgers, all connected together in a chain, and all being constantly verified or ‘mined’ by computer hardware. The homogeneity of information is key; if one block has different information to another, it fails verification and the errant data is erased.
Blockchain’s potential for secure transactions was ostensibly behind a recent UK partnership between Ripple, another cryptocurrency, and Santander. Ripple’s mission is to bring fiat currencies closer to cryptocurrencies by providing a bridge between banks and Bitcoin advocates (for example). The agreement will see blockchain tested in a new app for Santander staff.
Cryptocurrency still has a long way to go before it becomes a genuine alternative to pounds sterling (the offline payment process is notoriously cumbersome, using receipts printed with QR codes) but its potential for secure transactions and safeguarding information is undeniable.