As the world continually globalizes the economy, there is always
room for a new idea. To have a global economy, one might suggest a
global currency. The major issue with a single currency is an
agreement on a global scale. However, there has been a solution:
digital Bitcoins.
Bitcoins have become a huge success because they are a
decentralized, protected currency. Once a user is “verified”, any transaction
that the user makes is publically recorded, to prevent double-spending or any
action that could have a negative impact on the Bitcoin economy. Bitcoins
act as an investment that you can spend; many online services are now accepting
Bitcoins as a form on payment because it can always be translated back to the
user’s local currency. Of course, there are positive and negative
effects of a global currency. The infamous ‘Silk Road’, specializing
in an illegal drug service, allowed users to pay in Bitcoin. Once
this service was shut down, the FBI came to control about 1.5% of all Bitcoins
in circulation.
Bitcoins fluctuate similarly to a stock; they rise and fall, as
well as experience crashes. In 2011, one Bitcoin cost $0.30, and
then quickly rose to $32. Shortly after its massive rise, it
crashed; one Bitcoin costing a user $2. This Monday (11/18/13), the
cost of a single Bitcoin peaked at $600 USD, the highest it has been, ever.
“There are now about 12 million Bitcoins in existence. At $600, the market cap for the currency is around $7.2 billion. Some 50,535 Bitcoins are transacted every hour, according to CoinDesk.”
On a whim, I attempted to become verified to start buying and
selling Bitcoins. After approximately a week of verification steps
on coinbase.com, I was finally able to buy my first Bitcoin… during the largest
boom the currency has ever experienced. The great thing about
Bitcoins are the availability of fractional purchases. Being a poor
college student, I purchased .05 of a Bitcoin. $30 later, I was prompted with a
message that told me I would receive my purchase around Friday.
I am completely on board with this Bitcoin idea. I like
how it is a growing field and how it could become a viable investment for
certain parties. Naturally, it will experience booms and busts, but
because it is a currency, it will always be a viable option. I have likened
Bitcoin wallets to PayPal; the money is always there when you need to make a
purchase. With more and more online services accepting Bitcoin as a
currency, it will soon become a standard for internet users.
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