So, what is bitcoin? is it a money for the future as most of the funs present it? A scam? a ponzi scheme?
Bitcoin is based on cryptography and peer-to-peer technology. This "money" is not issued by a central authority but instead generated by machines over the world running complex calculations. The generated coins are attributed to those who put the calculation power in the service of the network in a process called "mining". To keep the number of generated coins constant over time, the difficulty is increased with the total network power. Sending or receiving bitcoins is simple and cheap compared to any traditional payement system. Transactions are comfirmed by the network and registred in an open book called the "blokchain" so anyone can know exacltly the amount of bitcoins in each address but those addresses are anonymous.
Bitcoin is a great technological innovation. The idea of a peer-to-peer "currency" that allow people to make cheap, fast and anonymous transactions is one of the most important advances in computer science in the last years. But it is still not sure whether bitcoin will become a dominating payement system in the future or it will collapse and disappear in the next few years.
In my opinion, bitcoin is not a Ponzi scheme although it may look like. It is true that those who initiated the system or joined the network at its beginning have mined a considerable amount of bitcoins before the mining process becomes so computationaly demanding but this is quite fair and as we say "the early bird catches the worm". The important thing is that the bitcoin system is now on the network and out of control of any group of individuals, organizations or government. It is currently maintained by people all arround the world who believe in it and whom confidence gives value to bitcoin.
The bitcoin will continue to exist as long as people continue to trust it and use it. But will they continue to use it if, for instance, the authorities declare it illegal? Last month the chinese monetary authorities have forbiden the chinese banks from using bitcoin without clearly declare its use by people, companies or organizations as illegal. The bitcoin price has fallen to about 50% in consequence. In France, the central bank has warned about the volatile nature of the bitcoin market and therefore adviced against the use of bitcoin. The finnish central bank has considered bitcoin as commodity because it fails to meet the definition of a money or an electronic payement.
UPDATE: After a statment from the russian central bank warning about the high speculative nature of Bitcoin trade and that the unit carried a big risk of losing value, the russian authorities have now declared that treating Bitcoin as parrallel currency is considered illegal due to the possible use of it in money landering and terrorism activities financing.
