WTF is a Bitcoin?

Over the past several months, following the discovery of Silk Road, I’ve been hearing a lot about Bitcoins, the online currency.  For those of you who don’t know what Silk Road is, long story short, an inconspicuous man named, Ross William Ulbricht, was arrested by the FBI in early October for allegedly running an illegal online marketplace which housed everything from hitmen to illegal drugs.  According to reports, the market place is responsible for over $28 million in consumer transactions, the catch though, its all anonymous.  If you are interested about this former underground cyber network, I encourage you to check out this synopsis by USA Today .

Having been a pretty obscure and widespread news story, I feel as though a lot of people, including myself, don’t exactly know what a Bitcoin is.  I did some research so I could make this digestible post for you all.

A Bitcoin is not physical currency.  It was created in 2009 by pseudonymous developer Satoshi Nakamoto, as an online and anonymous currency.  It is not monitored or controlled by any federal entities, like the US Federal Reserve or the Federal Deposit Insurance Corporation, which means money invested in Bitcoin is at risk of being lost pending any major crashes in the volatile market.

Since Bitcoins are only online, they are created, or found, through a process called “mining” in which computer users attempt to solve mathematical algorithms related to the current number of Bitcoins.  The actual number of Bitcoins to be in circulation is fixed.  The Bitcoin Foundation claims that there can only be 21 million Bitcoins at a time; in circulation right now are about 12.3 million.  Don’t take this post and run with this whole idea of mining for Bitcoins, though.  The process takes up a large amount of space on a computer and special programs are utilized to complete the mining.

Currently, Bitcoin is a legal monetary system. It is a viable alternative for some because of its privacy, much like cash, and because it is unregulated by the government, those cynics and independent ‘stick-it-to-the-man’ hipster types can truly be autonomous with their finances.

CoinYe
Kanye West inspired Bitcoin

Right now, Bitcoin is hot.  Just last month a new Bitcoin company created their form of crypto-currency around rapper, Kanye West, calling it CoinYe.  Unfortunately, due to an ensuing legal battle with the rapper, Coinye has abandoned their project.  As a young investor or as someone who is looking for a ‘get rich quick’ scheme, I can see the allure of Bitcoin.  According to BlockChain , the market for Bitcoins was soaring over $900 USD until it took a tumble to a little over $500 earlier this month.  These fluctuations are not unfamiliar in this market.  You can see on the graph how many spikes and dips occurred over the past couple of months.  For now, Bitcoin is a mysterious novelty that continues to grow in popularity and infamy each and everyday.  As a young and prospective investor myself, I am wary of its volatility.  Perhaps one day it can become a stable and consistently profitable market.

Maxwell

Advertisements

Dare to Dream

Unemployment fell to 6.7% in December from 7% in November, according to the Bureau of Labor Statistics.  This was an unexpected drop since the current model anticipated unemployment to remain steady around 7%.  This major (I’m considering .3% to be major when you think about the thousands of people who are now employed) reduction created roughly 74,000 new jobs; however, it is still below the 200,000 mark which economists had forecasted for this period.

On the other hand, Gallup Inc. has measured the current employment rate at 42.9% with their simplified Payroll-to-Population statistic, which measures the unemployment rate as a percent of adults in full-time jobs as a percentage of the total U.S. adult population.   This number dropped from November’s percentage of 43.7%, making it the lowest number Gallup has measured since March of 2011.

Is this cause for concern?  According to the Bureau, the improvement is good, but I feel as though our nation is lacking something, some je ne sais quoi, to propel our industries and businesses further.  We owe it to the millions of people who have stopped searching for jobs, to keep pushing for economic development.  Do you know what people all across the United States are concerned about?  According to Jim Clifton, CEO of Gallup Inc., its having a good job.

About three weeks ago, the freshmen in The George Washington University School of Business’s First Year Development Program had the opportunity to listen to Mr. Clifton speak about the importance of entrepreneurship.  According to his blog post, which he posted the following day, 400,000 small businesses and start-ups are being created annually, while 470,000 are failing annually.  Up until 2008, start-ups outpaced business failures by about 100,000 per year, but within the past six years that number has turned negative.  Due to the volatile market and foggy future of businesses, I think entrepreneurs are wary and more reluctant than ever to try their hand at owning their own businesses.  This is unfortunate because 50% of all jobs are in the small business sector, and according to the Small Business Administration, 65% of all new good jobs are created by them.

Despite these disappointing statistics, I would agree with Mr. Clifton in that now is the time to be taking chances on small businesses.  President Obama in his State of the Union address said, “We know that the nation that goes all-in on innovation today will own the global economy tomorrow.”  While I agree with this sentiment, what’s innovation without a sound business plan and business leader?

This is where entrepreneurs and business students come in to play; we need you.  The United States needs not only the Steve Wozniaks, but the Steve Jobs of the world to take innovative ideas and sculpt strong strategies and team members around them, so that they can be successfully integrated into our households.  And moreover, this will push our bounds as a society and also serve as a catalyst for our economic activity to spark employment growth.  Business is no longer purely about the bottom-line, this is how entrepreneurs and students can directly affect the wellbeing of others.

My message to you young and talented business hopefuls: do not be afraid to imagine.  Think about how many silly ideas you had as a child.  I remember one specific, crazy invention that I had when I was little, it was called the Triple Tasker.  What was made out of cardboard was a contraption (really just three square openings) that would allow the user to carry three different items in one awkward, compartmentalized big box.  While this was clearly not a practical idea, I wasn’t afraid to let my mind wander and think of obscure things.  Dream big.  If you want to create the next Nike, set out and do it.  Create a strategy, go to school, gather the proper people to help you and keep fighting for your goals.  It is you people who are creative and have a strong passion for turning products and services into money machines that will propel our economy to a $17 trillion GDP to a $30 trillion GDP.

To the policy makers and current business leaders: help our young entrepreneurs and business leaders accomplish their goals.  Target these young hopefuls early and develop their strengths and skills at an early age so that their potential can be maximized.  I implore you, for our future and economic health is dependent on the youth who dream and learn the biggest.

Maxwell