Bitcoin is a virtual currency that is thought to be a very strong buying tool to use in the times to come. It’s a decentralized currency that exists mainly in digital form. It is not issued or guaranteed by central banks. It began in 2009 as an open source project and is shared over the online computer network with the benefit of having an untraceable transaction. The new system would enable anonymous payments. Bitcoin set a standard when it attracted the largest investment to date in virtual currency at a staggering $25 million. Currently there are 12.1million bitcoins in circulation. When the supplied amount reaches 21million bitcoins no more will be made.
The New Bitcoin Wave
Overstock plans to become the first big US online retailer to accept the bitcoin. They plan to begin accepting it next year. Overstock sells a variety of general merchandise and the NASDAQ listed it as having annual revenue of just over $1 billion last year. There must be something to it all since JP Morgan filed a patent on the new bitcoin style payment system. Patrick Byrne the company’s libertarian CEO considers the currency to be thought of as a refuge from governmental control.
The price of a single bitcoin has fluctuated between $450 and $1,280 just in December alone. Market fluctuations like this indicate interest and sales volume of bitcoin. The wildly swinging currency seems to continue gaining value despite setback from regulatory demands, which have sent it crashing. Using bitcoin currency could possibly be a virtual investment that will begin to stimulate profit and build real wealth for it’s’ investors. Entrepreneurs and other venture capitalists are being drawn to use the digital currency. Bitcoin has received some prominent investors such as Jim Breyer, a partner at Accel and early backer of Facebook. Google has joined in by investing in Ripple and Buttercoin, both a bitcoin exchange.
The overall view of it is that it could be a foundation for a low cost, standards-based financial system that would be independent from the traditional banking system. The new crypto currency could greatly reduce the cost of transactions and make it easier to buy online. Worldwide and in the US the attitudes towards bitcoins will be a sort of evolution pulled by politics. Many different financial factors affect our virtual and economic world. The thought of swaying away from traditional financial services will take some time getting used to for some. Overall perspectives are warming towards the promise of long-term virtual currencies and having the benefit of allowing innovation within finances.
Fans of the new crypto currency say that the open protocols make it possible for payments to flow as cheaply and freely as email. This affect will begin a race to build low cost payment systems that would be founded on the new virtual currency. Currently the world pays an enormous 3 per cent tax on a large share of it’s’ payments. Some of the bitcoin facts will blow your mind. For example in 2008 a single bitcoin cost less than 10 cents and today could soar over $1000 in value. A single dollar invested a few years ago would now be worth over $40,000 today. It does raise the question of “is the world running from paper money”? With the US Federal Government pumping $85 billion every month into the US economy bringing the value of the US Dollar lower with each year.
Some believe the value of the paper dollar to have a lousy future. Recently the US dollar has reached a startling two year low. The weakest since November of 2011 while bitcoin has become very powerful in currency exchanges around the world. This is thought by some to be a powerful rebellion against the Fed and all central banks. Will this become the worlds’ next renegade currency?
Politicians and Companies
Politicians are terrified of this currency because it is a stateless currency. There is no central bank, no central computer and no center to attack. Governmental institutions fear it could be the beginning of the end for paper money and begin a powerful revolution.
Nike, Wal-Mart, Lowes and CVS are among 700,000 other American businesses turning towards the bitcoin. Economists predict bitcoin could add a new international monetary system. Powerful influences such as Obama and Bernanke are powerless to stop bitcoin’s power. Some believe the revolution has already begun. 36 cities across 20 states already allow citizens to pay for everything from bills to parking tickets using the bitcoin.
The new currency system would completely redefine the way we think about money. Bitcoin could actually free citizens from the whims of central banks around the world. Some people are comparing it to Pay-Pal. Bitcoin will serve as an alternative to credit card and electronic check payments. Legitimate internet sites such as Reddit and Baidu are among others accepting the new currency.
The question arises of whether the new bitcoin will become the new gold. As more and more people use bitcoin as an investment the wider circulation will drive its worth even higher. The currency’s value is solely based on the public’s confidence and acceptance in the product.
Online money could turn into a staple for future commerce and investors.
The origin of the bitcoin started with a computer programmer named Satoshi Nakamoto. Within the last few years he has disappeared from the internet, though the program continues to run. As with any true resource the bitcoins will become scarcer as time goes on. Bitcoin mining is required to create the bitcoin. Bitcoin is ‘mined’ by using computers to solve random algorithms generated by the original program. Miners of bitcoin refer to their computers as farms and sell or trade the bitcoin. This so called mining of the bitcoins will end in the year 2140. Bitcoin is not a coin or anything tangible. They are only a series of ones and zeroes in computers.
How this new currency will affect our future is yet to be said but with the current momentum can lead definite speculation towards what the new virtual currency has in store. Bitcoin is not the first alternative currency people have tried to create over the years but it is incredibly innovative and one of the most successful we have seen thus far. The time for investment and action could be upon us now.