Last week’s BitFilm Festival in Prezi’s Budapest headquarters allowed more than a sneak peek inside the much-discussed Prezi, with participants able to watch a series of animations, short documentaries and a 96-minute documentary popularising BitCoin, the innovative digital currency.
The film selection was very balanced in the sense of not attempting to be propaganda-like; short films gave information on both the advantages and disadvantages of BitCoin, and various opinions were heard from all around the globe, be it an Argentinian farmer’s or a US economic expert’s. Presumably, the primary goal of the event was not to make people buy BitCoins but rather to explain what BitCoin is and how it works.
What was agreed on, though, is that BitCoin is truly different from any other type of money we come across. It is a purely digital representation of value without any physical form, is independent of all governments and is not tied to any national currency. It is called a crypto-currency because it can be generated through a computer by what experts call “mining”, which is basically breaking cryptographic codes.
Another peculiarity is that the number of BitCoins is finite: only 21 million can exist at a time, and if the user does not use up a certain amount of BitCoins it will be taken back by the system to avoid hoarding, thus keeping the circulation of money on the market. Finally, BitCoin transactions can be followed and must be approved by all BitCoin miners for credibility, and every user receives an extract of all transactions that they call the “blockchain”.
Supporters have large expectations of BitCoin. They believe it can solve problems such as inflation, monetary bureaucracy and mercantilist money management; and they believe that the international introduction of BitCoins would establish a more user-friendly universal commerce platform. The number of organisations supporting BitCoins is growing fast, as it can now be used on WordPress and WikiLeaks, too.
But before rushing to convert all your values to BitCoins, we must note the negative aspects of this new form of money. BitCoin is an incredible invention but it is not quite compatible with the current monetary system. Supporters of BitCoin are trying to find ways around banks, which is naturally not appreciated by governments and institutions handling money.
For example, the US banned its use and it is unwelcome in most other countries as well. The only European country to allow its use is Germany, which labelled it as “private money”. What worries experts most is that there is no guarantee for the universality of BitCoins, as a new, similar crypto-currency might emerge that could crash BitCoin’s idealised market. Also, the fact that BitCoin was used by numerous criminal organisations in the USA is not helping its image.
Although this innovation appears to be uncharted territory, many people who live in countries with failing economies, such as Argentina, are tempted to invest in BitCoins because their own national currency is not sufficient to support their commerce.
Nevertheless, events raising awareness of this new currency craze are needed, and we are looking forward to see what Prezi – which describes itself as virtual whiteboard that transforms presentations from monologues into conversations, enabling people to see, understand and remember ideas – is up to next time.