Posted by iHeartMedia’s Nik Rajkovic
Despite the recent downturn of Bitcoin, digital currency continues to explode on the scene. Rockets owner Tilman Fertitta last week suggested he may start accepting Bitcoin at his restaurant and casino businesses.
Cryptocurrency is peer-to-peer digital currency that can be transferred instantly like electronic cash. Unlike the U.S. Dollar, there’s only a finite amount available. Its backed by a group of investors rather than gold or other standards.
“They have a massively distributed transaction ledger that replaces that ‘trusted’ intermediary, the protocol itself becomes this ‘trustless’ payment system, and that’s what gives the technology its value,” says Stephen Powaga, managing director of Blockchain Momentum.
More than 22 million people own a piece Bitcoin, which soared to $12,000 on the price index last month, only to lose $40 billion in a 24-hour period last week.
Despite the volatility of cryptocurrency, others like Ripple and Litecoin have emerged.
“Ripple is actually owned by a company. ‘Coins’ are not currently being created, but there were 100 billion ‘pre-mined’ and then distributed to the founders and the company and a large subset of those were put into escrow,” says Powaga.
“Litecoin was created as essentially a Bitcoin clone out of MIT I believe, the amount of data that is transferred is four times larger.”
But Powaga says there’s growing excitement over Ethereum which promises to be more flexible than the others.
“Ethereum could in theory facilitate people having insurance contracts, mortgages and instruments run entirely on the ‘blockchain,’” he says.