As the world’s current frontrunner in the Crypto Currency market, Bitcoin has made serious headlines and upheavals over the past 6 months. Almost everyone has heard of them, and almost everyone has an opinion. Some people can’t fathom the idea that a currency of any value can be created out of nothing, while others love that something without Government control can be traded on its own as a valuable entity.
Where do you sit on the “Should I buy Bitcoin?” The barrier probably boils down to one question: Can I make money with Bitcoin?
Can you make money with Bitcoin?
In the last 6 months, the price has dropped from $20 a coin in February, to $260 a coin in April, to $60 in March and to $130 in May. The price has now settled at around $100 a Bitcoin, but what happens next is anyone’s guess.
Bitcoin’s future ultimately rests on two main variables: its adoption by the general public as a currency and the absence of prohibitions against Government intervention.
The Bitcoin community is growing rapidly, interest in the Crypto currency has spread wildly online, and new services are increasingly accepting Bitcoin payments. Blogging giant, WordPress, supports Bitcoin payments, and African mobile app provider, Kipochi, has developed a Bitcoin wallet that will enable Bitcoin payments in developing countries.
We have already seen people make millions with money. We are seeing more and more people experimenting with living on Bitcoin only for months at a time, while filming their experience watching documentaries.
You can buy takeout in Boston, coffee in London, and even some cars on Craigslist using Bitcoin. Bitcoin searches have been on the rise in 2013 with the April spike and subsequent drop in the Bitcoin price. Last week the first major purchase of a Bitcoin company was made for SatoshiDice, an online gaming site, for 126,315 BTC (about $11.47 million) by an unknown buyer.
This rapid growth in awareness and uptake looks set to continue as confidence in the currency remains strong. This leads to the second dependency. Government regulation.
Although it is specifically designed to work independently of government control, Bitcoin will inevitably be influenced by governments in some way. This should be so for two reasons.
First, to achieve high levels of adoption, Bitcoin will need to be accessible to a large number of people, which means expanding beyond the realms of hidden transactions into common everyday transactions for individuals and businesses. Second, these Bitcoin transactions could become a traceable part of people’s tax wealth, which could be declared and regulated alongside any other form of wealth.
The European Union has already stated that Bitcoin is not classified as fiat currency, or money, and therefore will not be regulated per se. In the US, the 50-state system and the number of bureaucratic bodies involved have made decisions unavoidably difficult, so far no consensus has been reached. Bitcoin is not considered money, but it is considered to act like money.
A thriving U.S. Bitcoin market has a more uncertain future for now, and any decisive U.S. legislation could have a very positive or very negative impact on Bitcoin’s future.
So should you buy Bitcoin?
The answer mostly depends on your risk aversion. Bitcoin will certainly not be a smooth investment, but the potential of this currency is great.