Forget the dollars – BitCoin could be the new currency of the internet

At a conference yesterday about collaboration in digital music NetAudio London, I was surprised that we got a bit of a lecture about online economics, specifically digital currencies. But I guess – it makes sense. The big issue with sharing on the web is not how to do it – we all know how we can do it – but not how to make money out of it.

Which is why the speaker Matthew Fuller brought up BitCoin. It’s a peer-to-peer virtual currency.

So the idea of a digital currency doesn’t solve the internet’s financial problems. File-sharing still knocks the value out of the music industry. But it does provide a new way to share value.

The rationale behind online currency goes like this: REAL currencies – like oh pounds sterling – have value because the government say they do and we trust them. The BitCoin currency has a value because people on the internet say it has a value and we trust them. Not to get too philosophical here – but there’s a lot of belief involved in value and the money systems we have.

Bitcoin is independent of tax, you can earn it through online tasks, spend it on online goods, and then convert it into dollars or euros when you need to.

Bitcoin explain further: “Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network.”

Um – it’s not going to replace the dollar as the new but what with being free of tax, untracked by the world’s banking system and international, it’s probably something Wikileaks should look into.

An idea for the rest of us to keep an eye on..

More information on BitCoin: http://www.weusecoins.com/