Bitcoin Being Bitcoin

               For those who are unaware, Bitcoin is a virtual currency, or at least it’s trying to be. According to Wikipedia: “Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into the public ledger. Called mining, individuals or companies engage in this activity in exchange for transaction fees and newly created bitcoins.” Now the price of bitcoin fluctuates quite rapidly. There are a variety of reasons for this, but it leads to a lot of controversy. It is mainly known for being the currency of “drug dealers and assassins.” Bitcoin has this reputation because it was the main way of payment on Silk Road which sold various drugs and illegal services. Now the public is very wary of adopting bitcoin partly because of its bad reputation and unreliability.

                Recently, the price of Bitcoin dropped twenty percent. This is not the first time that a big drop has happened. After Silk Road shut down, bitcoins value dropped again, only to recover the loss within the next couple of days. As the article states, bitcoin is a “commodity trying to become a currency.” The problem with bitcoin, though, is that not a lot of people are willing to make the risk.  When I read this article, which was posted today at 4:38pm, the value of bitcoin was at $300, which was up from a low of $286. As of writing this blog post, bitcoin’s value is now at $312. Now, this article is about it dropping twenty percent, but all of the sudden it’s now picking back up again. Even more bizarre is that, after I just wrote the sentence about it being $312, it’s now at $308. This is kind of crazy considering it’s only been a few minutes, but some may say this is similar to the stock market. It is, except that the stock market closes at a certain time; bitcoin trading does not.

                For bitcoin to become a currency, it is going to need a lot of people using it. The rapid fluctuations of value combined with bitcoin’s unsavory past do not paint a pretty picture for widespread use. I think that there could be a great use for a virtual currency, but at this stage, it’s hard to say if bitcoin is the best fit. For most people, investing in bitcoin just is not worth the trouble. “’As the price is going down, some of us are under immense psychological stress,’ one user posted on Reddit on Sunday. ‘Please share how you cope with it.’” I don’t know about you, but rarely am I under immense psychological stress that the value of the dollar is going to go down. This is a serious problem for bitcoin to see more people using it for transactions. If I am going to use a digital currency, I don’t want to have the huge risk involved of it just collapsing one day. Some say that if it finds widespread use, the price will stabilize.  If it does stabilize, I think it would be interesting to see how far it goes. Personally, I would have no problem using it, but right now the risks are too high.

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