It might sound like something out of a science fiction novel but virtual currency is taking the world by storm and is prospering right here in Manchester.
Various digital currencies have emerged in recent years but Bitcoin, which was established in 2009, has been grabbing major headlines for the past 12 months.
While there are no signs of a mass uptake in shops accepting digital currencies, tides are slowly shifting and one corner store in Manchester has been accepting Bitcoin for more than a year.
However, the emergence of Litecoin in recent months has presented a challenge to Bitcoin’s dominance and could see a surge in popularity in Manchester after one business revealed it would be launching ‘mining’ hardware for the currency.
Mining is the process of extracting the virtual coins by solving complex algorithms on your PC or through a mining device.
In fact, there are people racking up hundreds of pounds every week by simply leaving their computer switched on when they go to bed, working away at ‘mining’ on its own.
Mohammed Akram, founder of Alpha Technology, the manufacturer of the Litecoin Viper Miner said: “Currently the most efficient way to mine Litecoins is to mine using off the shelf ATI GPU’s.
“There are many guides you can find online to building your own computer system and stacking up GPU’s to mine Litecoins. However, it is very inconvenient and requires a lot of power and cooling.
“That’s where we come in, our products are designed for the task of mining, so are much more efficient, cheaper and easier to configure.”
For those who might doubt Bitcoin’s emerging power the fact that the currency has increased in value by more than £600 over the last six months points to its success.
This fact is likely to be one of the main reasons that Litecoin, which was established in 2011, is seeing such a strong interest from potential adopters.
“Litecoin is like silver and Bitcoin is like gold. As both cryptocurrencies are quite volatile in value, it would be safe to have both Litecoins and Bitcoins,” Akram told MM.
“If the value of Bitcoin drops, Litecoin value may not drop as much, so you can secure yourself with both.”
One avid Bitcoin supporter is Ash Moran, the co-founder of Bitcoin Manchester, a meet-up group in the Northern Quarter for supporters of the digital currency.
Ash says he was immediately hooked on the concept.
“As soon as I heard about it I just thought ‘this is awesome’ I mean there’s no reason why this isn’t better than everything that already exists. Given time it will take over, I knew it straight away do I had to get involved,” Ash said.
“You can read about it until the cows come home but until you actually use the system, and realise how efficient it is, transferring value across borders and to one another, it’s incredible.
Despite championing cryptocurrency, Ash doesn’t think Litecoin will dethrone Bitcoin any time soon.
“I don’t really think of it as a threat. I was there looking at Litecoin since the beginning and I think the only reason it has had any success is that people are aware that it was going to start, people had an opportunity to get in before it started and the mining was the same process essentially,”
“I think that’s what’s made it get to where it is now.”
With Bitcoin continuing to rise in popularity and gaining credibility as a viable payment method, the European Banking Authority (EBA) last month issued a statement warning of the dangers of using virtual currency.
“When using virtual currencies as a means to pay for goods and services you are not protected by any refund rights under EU law offered, for example, for transfers from a conventional bank or other payment account,” the EBA said.
“In addition, if you lose the key or password to your digital wallet, your virtual currency may be lost forever. There are no central agencies that record passwords or issue replacement ones.”
While there is no crystal ball that can predict the future of the two currencies it is clear that the concept alone is one that will have a very real impact on the way that monetary transactions take place in the future.
Image courtesy of Antanacoins, with thanks
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