As many of you may have heard, Bitcoin is a digital currency which can be used to purchase goods online, transfer money, or to store as a commodity. Bitcoin has made a lot of headlines over the past 5 years, with the “creator” of it remaining anonymous.
It has rivaled banks because of its cheap and speedy transfers. I have used Bitcoin in the past and was surprised at the speed and cheap cost of transfer. First of all, it takes about 1 hour to send money to someone. As long as the person has a Bitcoin “address” (similar to a bank account number), than they could receive these funds. Secondly, the amount you can send is unlimited. Unlike the traditional wire transfers that banks use, there is no questions asked… whether it is $10 dollars…. or $1000000 dollars. Many people including myself agree that if the money belongs to you, you should be able to do what you want without any one questioning you the reasons. Bitcoin allows you to be your own bank and gives control instead of allowing an entity do that for you.
It has challenged credit card companies since you can purchase goods online discreetly if needed. Now personally I never ordered any “discreet” items. I would think this would be useful for an adult couple who are hiding there “sexual” desires from each other lol… On that note, I did order a pair of shoes from a website for a tester. The problem I see with Bitcoin is that not all major stores accept it. When that happens, one would have to use a transfer service (which costs a fee) in order to convert your bitcoin into a credit card purchase. When I did my purchase, it cost an additional 5% of the total value of the item. Everything went smooth other than that and the shoes arrived just as a normal, successful online transaction goes. In my opinion, once bitcoin becomes more widespread, companies will have to store incorporating it as part of their payment methods in order to stay competitive.
It has also challenged… stocks or say commodities as means of a potentially good invest in the future. It is considered a highly volatile investment which attracts day traders, as well as long-term investors. The day traders can make their profits by the difference in prices and catching the lows and selling at high’s. The long-term investors are banking in on the fact that it is like gold. It is like gold since it is scarce… it is limited in the sense that after 21 million Bitcoins are mined… there will be no more. When I say mined it is not like real physical labor like gold… but one would have to purchase a very expensive computer and let it run off a lot of electricity to solve “mathematical equations” and be rewarded with bitcoins after your computer generates the answer. That is one of way being in possession of Bitcoin. I prefer the second way which is simply going onto an exchange and purchasing it off someone else. To give a good example of the potential of
Bitcoin… here is a yearly chart. Currently, Bitcoin is valued at $556 CDN.
Now if you ask me, Bitcoin sounds like technology that is here to stay. It has many pro’s…. but obviously every good thing can be turned to a bad thing. Governments are now getting involved trying to regulate it because they see it more as a threat than anything else. I mean sure, it is creating employment opportunities through their exchanges, and it may increase overall sales of products online. The problem is…. the governments like control and they do not like something such as bitcoin… which basically has no entity behind it other than the “people”. Bitcoin is a peer-to-peer network, no one owns or controls it.
When no one owns or controls it, that leaves freedom. Bitcoin received a lot of buzz in October 2013, when the owner of a website called Silk Road was busted. Silk Road was a place to purchase everything, and I mean everything. Any type of drug, fake identification… stolen credit cards… It was a black market eBay. Their method of payment was of course Bitcoin since you can remain anonymous using it. There were other websites that used bitcoin to purchase illegal firearms. Bitcoin has received a lot of criticism due to the same reason why people love it so much. People believe that bitcoin is contributing to online crime as it is a payment method that makes it convenient for illegal transactions. Since bitcoin is so discreet this leaves it as a possible threat in the future.
It is a threat for the tax-man as well. If one was to use it as a payment method for their website… the storage of funds in your Bitcoin account remains discreet. It is like having an off-shore account. It is very difficult to track the owners of bitcoin accounts due to its structure it was built on. Although it is quite interesting that you can literally see every transaction ever recorded using Bitcoin… we just don’t know who is the sender or recipient.
Personally, I believe Bitcoin should remain unregulated. As a digital currency, all of its reasons for being such an innovative technology is due to the anonymity, the convenience, and less expense. These savings are passed towards users of bitcoin. Technology is always evolving and it leads to more innovation. Without the internet, we wouldn’t be able to communicate online through sites like WordPress. Justin Bieber would have possibly never been found if there was no YouTube. Online crime has been happening since the internet was made. I believe the pro’s outweigh the potential con’s.