As the current world leader in the cryptocurrency market, Bitcoin has been making some serious headlines and some serious fluctuations over the past 6 months. Almost everyone has heard of them and almost everyone has an opinion. Some cannot fathom the idea that a currency of any value can be created out of nothing, while others love the idea that something without Government control can be sold as an asset of value in itself.
Where are you sitting “Should I buy Bitcoin?” the fence probably eventually boils down to one question: Can I make money from Bitcoin?
Can you make money from Bitcoin?
In the last 6 months alone, we have seen the price rise from $20 in February, $260 in April, $60 in March, and $130 in May. The price is now settled at around $100/bitcoin, but what will happen next is anyone’s guess.
Bitcoin’s future ultimately rests on two key variables: its acceptance as a currency by a wide audience and the lack of prohibitive government intervention.
The Bitcoin community is growing rapidly, interest in Cryptocurrency has exploded online, and new services are increasingly accepting Bitcoin payments. Blogging giant WordPress accepts Bitcoin payments, and Africa-based mobile software provider Kipochi has developed a Bitcoin wallet that will enable Bitcoin payments on mobile phones in developing countries.
We have already seen people make millions with the currency. When recording the experience to watch documentaries, we see an increase in the number of people who try to live on Bitcoin alone for months.
You can buy food in Boston, coffee in London, and even a few cars on Craigslist using Bitcoin. Searches for Bitcoin skyrocketed in 2013 with the April spike and subsequent drop in the price of Bitcoin. Last week, the first major purchase of a Bitcoin company was made for SatoshiDice, an online gambling site, for 126,315 BTC (about $11.47 million) by an undisclosed buyer.
If confidence in the currency remains strong, this rapid growth in awareness and adoption will continue. Which leads to the second addiction. Government regulation.
Although it was specifically designed to function independently of government control, Bitcoin will inevitably be influenced in some way by governments. This should be for two reasons.
First, to achieve a high level of adoption, Bitcoin must be accessible to a large number of people, and this means moving beyond the realm of secret transactions into normal day-to-day transactions for individuals and businesses. Second, these Bitcoin transactions can become a traceable part of people’s taxable wealth, subject to declaration and regulation like any other type of wealth.
The European Union has declared that Bitcoin is no longer classified as a fiat currency or currency and therefore will not be regulated on its own. The 50-state system in the United States and the number of bureaucratic agencies involved have made decisions inevitably difficult, with no consensus thus far. Bitcoin is not considered money, but it functions like money.
The burgeoning Bitcoin market in the US has a more uncertain future for now, and any definitive legislation in the US could have either a very positive or a very negative impact on Bitcoin’s future.
So should you buy Bitcoin?
The answer largely depends on how risk averse you are. Bitcoin will certainly not be a smooth investment, but the potential of this currency is huge.