Each nation or government has its own form of currency, i.e. money.  We have the dollar. France has the franc, Russia has the ruble, England has the pound and so on and so forth.  Each form of money is backed up by “faith”. If other nations have trust in it, things will go along OK.

A good example of this is the 9/11 experience.  That day on September 11, 2001 when the United States was attacked by terrorists ramming hi-jacked airliners into New York skyscrapers the United States was seriously threatened, and the world economy was at risk.  What did we do? Roger Ferguson who oversaw our Federal Reserve (Alan Greenspan was on travel out of the country) had to assure the world that things would be stable. He sent cash deposits to all the federal reserve banks.  He then informed the world banks that the United States was cash rich and stable. “The United States is open for business and the dollar is sound.”

The above action kept peace throughout the markets of the world and there was no financial catastrophe.  The major nations of the world kept their faith in the strength of our economy.

There was a time when we backed our treasury with the “Gold Standard”.  We kept mountains of gold at Ft. Knox, Kentucky to back up our currency.  President Nixon pulled us away from that concept and since then we act on own faith – “In God We Trust”.  Our dollar is accepted everywhere. Depending on the nation and calendar date it is worth so much in one nation and something else (perhaps) in another.  It is all about faith and daily market closings. That scares me.

But it doesn’t scare Kay.  She and most of the world are accepting a concept known as Bitcoin.  I can’t get used to that. But it gets more interesting. While we are trying to adjust to the concept of Bitcoin here comes Blockchain.  These two currencies are extremely mysterious to me.  I will let her explain it to you.

My husband, Harry, is a doubter. And that’s ok. Both of our sons are in the Financial tech arena and both are invested in bitcoin. Even Greenleaf, on Oprah’s OWN streaming network is talking about Bitcoin as an investment strategy. I don’t believe that Bishop James Greenleaf’s strategy is going to fare very well, but that’s a drama best discussed over a cup of tea.  

Bitcoin is a digital and global money system. It allows people to send or receive money across the internet, even to someone they don’t know. Money can be exchanged without being linked to a real identity. he system enables payments to be sent between users without passing through a central authority, such as a bank or payment gateway. It is created and held electronically. Bitcoins aren’t printed, like dollars or euros – they are produced by computers all around the world. They can only be used on the computer, phone or other devices.

A computer expert using the name Satoshi Nakamoto developed Bitcoin in 2008. We don’t know the identity of this person. The idea was to produce a means of exchange, independent of any central authority, that could be transferred electronically in a secure and verifiable way. Some people don’t trust banks and abhor the control that banks have on their money.

Bitcoin transactions cannot be reversed which is great for business owners who have experienced charge backs (where the buyer cancels the payment after receiving the product) with traditional credit card companies. And the sender and receiver are anonymous, identified only by the address on their wallet. Unlike traditional transactions where the identities of the parties are known for verification purposes. However, transactions are trackable, so illegal activity can be detected.

To get started, get a Bitcoin wallet (blockchain is one type) and add Bitcoin to it. You can get Bitcoin by receiving payment for a product or go online and buy it from a currency exchange. You can make purchases with the Bitcoin wallet app on your phone. A Bitcoin wallet is like a regular wallet in terms of securing it and your money.

According to coindesk.com, lots of places accept Bitcoin. You can pay for airplane tickets, college tuition, apps for your phone, pizzaforcoins.com will deliver pizza, gift cards and many other products.

If you are a store owner, consider using Bitpay.com as your secure payment gateway to process your Bitcoin payments.

Also, consider the possibilities of international money transfers. Now, you can instantly and cheaply remit money to your family in another country.

Some people use Bitcoin as an investment strategy and some do get rich. But it takes time and attention. For now, I’m sticking with small purchases.

Now let’s spill that tea about Bishop Greenleaf.

October 16, 2018

Harry C. Alford and Kay DeBow are the co-founders of the National Black Chamber of Commerce. halford@nationalbcc.org and kdebow@nationalbcc.org