Sunday, April 02, 2023 | Ramadan 10, 1444 H
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The internet of money and social media


Just received a gift: a small piece of paper that can be used for digital money transactions. On the back of the paper — which looks like a torn-off part of a page of a newspaper — are instructions on how to verify deposits and check the balance — it is my bitcoin paper wallet.

This imaginary currency is not printed like dollars or pounds — the ‘money’ is produced by computers using free software. The development and operation of cryptocurrency are happening in social media. The more people talk about it, the higher value the coin reaches.

Facebook, Twitter and Reddit along with Slack and Telegram are the channels people turn in to get information and updates on bitcoins — though FB has said it is considering banning ads on virtual money.

Tech multinationals and online shops already accept digital currency transactions and, in Kenya, a man used bitcoin to pay for the dowry.

Bitcoin is the most well-known virtual currency followed by Ethereum and Ripple and Litecoin. There are more than 1,500 cryptocurrencies.

In fact, bitcoins are about technology and peer-to-peer transactions. Digital payments are made between users without passing through a central authority such as a bank.

While the senders of traditional electronic payments are usually identified (for verification purposes, anti-money laundering and other legislation), users of bitcoins can operate in semi-anonymity. The system only confirms that the sender has the necessary virtual amount for the transaction. There is no need for individual’s identification; no clearing delays; no transaction fees.

Not surprising that adventurous entrepreneurs already forecast social media cryptocurrency — which could allow social media users to earn money for viral posts and engagements. Steemit and Synero are two new social sites that have grown from the cryptocurrency origin. Broadly, both sites encourage users to reward each other and monetise online content.

So, tapping into social media to profit on cryptocurrency has become a reality while at the same time, cryptocurrency focus forums are fast growing on social media — and people are jumping into the trend of making easy money. ‘Get Involved, Spread the Word and Get a 50 per cent Bonus!’ is just one example of online advertisement enticing people to trade on tokens. There is a kind of gold rush mentality going on.

But not so easy after all, because digital currencies trade in a continuously open, 24/7/365 market. Social networks also operate 24/7/365. The transaction model creates a constant need for information.

Among enthusiasts, Twitter is considered one of the best sites to share breaking news on the currency, offering timely information for trading decisions. However, there is always a risk that information can be misleading.

Statements can be optimistic, but untrue. ‘Pump and dump’ scams have become more common due to effective online advertising. But money regulators are raising flags on cryptocurrency warning investors not to buy based on social media tips or sudden price spikes.

But, how it all started? Enigmatically, after 10 years since the invention of bitcoin — a software-based online peer-to-peer payment system no one knows who or what is Satoshi Nakamoto — the software developer. Trying to discover or understand who are the creators of ‘Internet of Money’ is like a maze. A number of labyrinths track to nowhere. And so, the mystery about the identity of the fictitious Nakamoto continues, while developers cash in on the concept.

Technology is advancing the role of online trading and investment — individuals already hold part of their wealth in secured-store bitcoins than having the asset in a regular bank. Not long ago, the concepts of ATM, credit card and online shopping had hits and misses, but they are all here as part of our routine. With bitcoins, the same might happen.

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