Most Australians are already used to some kind of "electronic money".
I can't remember the last time I saw a cheque in my hands! Which is probably why they are set to be phased out by the end of 2019.
Debit and credit card use in Australia has eclipsed cash in the last few years according to Reserve Bank of Australia
It's what gets paid into our bank account, what we use every time we swipe our cards to pay for a transaction, and every time we BPAY a bill.
This is a digital version of your hard earned money that could, in theory, be pulled out at any time for real cash in the form of bank notes or coins.
In many countries like Australia, America, and the United Kingdom the government will even 'guarantee' the deposits you hold in your bank up to certain limit.
We keep this cash in the bank because it's easy, with the assurance that it's safe and we can pull it out when we need it.
You have to have a certain amount of trust in the financial institution that you're dealing with for this.
One of the key differences between this electronic version of our money and digital currencies like Bitcoin is the lack of this central issuing authority and a trusted middleman holding onto it for us.
Bitcoin and other cryptocurrencies are a peer-to-peer exchange of value system.
It's the equivalent of taking money out of your physical wallet and handing it to me to put in my physical wallet.
Only that money wasn't printed by the government.
Cryptocurrency enters the ecosystem only when miners validate transactions and add them to the blockchain.
The advanced cryptography behind the blockchain cuts out the need for a central authority like a bank to validate all our transactions.
Some of the benefits of this over big financial institutions are
Lower Fees - by not having to pay big banks to verify each transaction as valid;
Privacy - those some same big banks don’t see where every dollar you spend goes; and
Trust - by knowing every dollar out there is accounted for to prevent double-spending.
You're essentially removing the trust in the government and big banks and placing it in the technology behind Bitcoin - the irrefutable blockchain.
Bitcoin has had its challenges delivering on all of these promises.
For example, as demand for Bitcoin and transactions grew the fees associated grew, making smaller transactions less feasible.
But as time goes on and Bitcoin popularity increases, these challenges are being addressed with new technology.
It's hard to predict Bitcoin's future and the future of cryptocurrency.
Will Bitcoin reign supreme as the new standard for payment across the world, or will it be an alternative cryptocurrency that pops up in the future?
Either way, Bit Shopping is excited to ride the technological wave of innovation that's going on.
We are proud to be one of the first online department stores offering Aussies 1000's of products all available to purchase with Bitcoin.
- Joshua Maher