A great resource for ICT news particularly relating to the Caribbean is the blog ICTPulse, “ICT issues from a Caribbean Perspective.” In an article posted on the website earlier this month discusses one method of deterring hackers and payment fraud through use of the “Bitcoin.” As blog writer mmarius describes in this post “Can Bitcoins solve the e-payment challenges in the Caribbean?” there are many challenges and risks associated with online payments. However, in an ever-globalizing economy, a solution to making this process more secure is becoming more and more necessary. Here’s a breakdown of what the Bitcoin is exactly. This short video especially does a great job of describing and illustrating the how and why the Bitcoin is an effective ICT for secure online payments.
“Launched in 2009, Bitcoin (BTC) is a digital currency that has no central management authority, and uses instead peer-to-peer technology to issue Bitcoins and manage transactions. Although some vendors have created and issued Bitcoin notes and coins, its true value exists electronically, where:
- No Centralized Bank/Controlling Agent
- Currency Value is based on supply & demand
- Individuals directly control holdings and transactions
- All Bitcoin accounts and transactions are private”
The Bitcoin is a generally a recent development and since it is based on supply and demand, will take some time before “developing a critical mass.” As more customers and vendors put faith in using and accepting Bitcoins, their value will stabilize and become more widely accepted. However, just like any other online payment method, this article also discusses how the Bitcoin is still susceptible to some forms of cyber threats. Although the Bitcoin online database itself is said to be secure, network breaches and compromised accounts are still a possibility. A final issue lies in Bitcoin’s individualistic approach. In the event of a theft or account breach, there is no protection for users. This method may save cost and keep account information private however this in itself causes the system to be vulnerable.
Personally, I feel that the use of Bitcoins could cause illegal transactions to easily fly under the radar. With no protections and little oversight, this could cause the black market to flourish. In fact, a more recent article from Forbes.com “Bitcoin Combines Ph.D-Level Computer Science With Sub-Kindergarten-Level Monetary Understanding” referred to this alternative form of currency as “garbage.” What it did highlight however was its creativity approach to innovating the field of computer science. Although its purpose is a good one, I’m not sure if this ICT4D tool would be the most effective.