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Bitcoin Mining: Is It Here to Stay? Experts Have Mixed Opinions

Image: Bitcoin Mining: Is It Here to Stay? Experts Have Mixed Opinions A man sits next to a Bitcoin mining machine, at a Bitcoin mining office in Feng Yupeng in Chongqing, China.

By Clyde Hughes   |   Monday, 03 Feb 2014 12:47 PM

Bitcoin is continuing to make a space for itself among global currencies, with some experts going as far as claiming it's the future of money.

Marc Andreessen, a venture capitalist and Internet browser pioneer, told an audience at the Open Compute Summit in San Jose, Calif. last week that he sees Bitcoin replacing banks and stock exchanges one day, according to eWeek.com. 

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"Bitcoin mining is the heart of Bitcoin, which is all the computation that is done to maintain the trust network," Andreessen said. "The press reports on mining as a waste of time, but in reality it's all the proof of work computation that makes a distributed trust network work."

David Furlonger, vice president and fellow at the research group Gartner, said that he believes Bitcoin is "overhyped." However, it is leading the conversation on how value is calculated.

"Bitcoin is a massively overhyped piece of noise in the marketplace in and of itself," Furlonger said, per TechWeekEurope. "That said, it evidences something more fundamental, which is a shift in the notion of how value is calculated and how value is transferred between entities."

Bitcoin is a peer-to-peer virtual currency that removes the government as a middle man in financial transactions. Bitcoin miners use special software to solve math problems and are issued a certain number of Bitcoins in exchange. Bitcoinmining.com says the software provides a fair way to issue the virtual currency and encourages others to mine as well. 

TheVerge.com reported last week that the U.S. Treasury has decided not to regulate virtual currencies like Bitcoin as long as it complies with financial regulations.

"Though the ruling does not let all Bitcoin and virtual currency businesses off the hook from regulation, it's good news for the bulk of users who are interested solely in acquiring and trading a currency," TheVerge.com reported.

"Many have been concerned that Bitcoin's increased popularity would lead to regulation and hamper the ability to use it anonymously — a sizable part of what makes it so appealing. Virtual currency exchanges will still be required to register with FinCEN and comply with money-laundering regulations though, whether they exchange with legal tender or just another virtual currency," the article added.

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