Future of money or fad? A closer look at cryptocurrency and Bitcoin

MILWAUKEE — Is it the future of money or a fad? Bitcoin has become a household term, despite the fact that a lot of people don’t know what is or how it works.

If you visit The Jewelry Center in Greenfield, you can pay for your purchase with either cash, credit, or as of January, Bitcoin. The business is one of only a handful in the Milwaukee area now accepting the digital currency. As of July, the business has had three transactions with the digital currency.

“We can take that money and convert it right into cash and deposit it into our bank account, the same as you would a credit card transaction or a pay pal transaction,” explained Thomas Rouse, operations manager at The Jewelry Center.

So, what is Bitcoin?

Unlike bills you can hold in your hand or change you can count, Bitcoin is a form of money that exists only in computer code. Bitcoin transactions don’t go through a bank. Instead, transactions are made directly from person-to-person or to a business.

“So there’s no fees involved, like bank fees or credit card fees,” Rouse said. There are several ways to acquire Bitcoin. One option is a Bitcoin ATM. In order to use the Bitcoin ATM, first, you need to download a Bitcoin wallet. You can then use the wallet to either buy coins or withdraw cash from the ATM.

Ben Phillips of RockitCoin ATM walked Contact 6’s Jenna Sachs through the process of purchasing Bitcoin through an ATM in Kenosha. She entered her phone number, chosen pin and scanned her wallet’s QR code. She converted $20, which gave her .007 Bitcoin at the time of purchase.

Phillips warns that all transactions made with cryptocurrency are final. Bitcoin is, also, more volatile than the dollar. Its value goes up and down. “The more people use Bitcoin, the more likely the price is to go higher,” Phillips said. Derek Urban with Coinigy — a trading platform for digital currency in Waukesha — says Bitcoin is the most popular. “Just like any investment, you should probably understand what you are investing in,” Urban said. “There’s an idea that, if money is not barter, it’s not gold. It’s not a piece of paper. It’s data that can’t be destroyed and can be instantly transferred. That’s a pretty cool idea to me.”

So how does Bitcoin get its value? It comes down to people called miners.

Miners operate servers, which are constantly trying to solve complex mathematical algorithms. The more algorithms solved, the more money miners earn and the more Bitcoin is released into circulation — and its value goes up. The Jewelry Center is on the forefront should Bitcoin turn out not to be a bust, but the future of money. A lot of the hype surrounding Bitcoin is about getting rich by trading it. The price skyrocketed last year. But where else does the appeal come from?

Well, there are parts of the world where people don’t have easy access to banks but do have phones. Also, international payments are easy and cheap. Additionally, some people don’t want to use banks or don’t trust them, and some technologists argue it’s a better financial system, but one that at least for now does come with risk and is largely unregulated.