As the world’s current front runner in the Crypto Currency market, Bitcoin have been making some serious headlines, and some serious fluctuations in the last 6 months. Almost everyone has heard of them, and almost everyone has an opinion. Some can’t fathom the idea that a currency with any value can be created from nothing, whilst some love the idea that something without Government control can be traded as a valuable entity in its own right.
Where you sit on the “Should I Buy Bitcoin?” fence probably ultimately boils down to one question: Can I Make Money from Bitcoin?
Can You Make Money from Bitcoin?
In just the last 6 months, we have seen the price go from $20 a coin in February, up to $260 a coin in April, back down to $60 in March, and back up to $130 in May. The price has now settled to around $100 a Bitcoin, but what happens next is anyone’s guess.
Bitcoin’s future ultimately rests on two major variables: its adoption as a currency by a wide audience, and the absence of prohibitive Government intervention.
The Bitcoin community is growing rapidly, interest in the Crypto currency has spread dramatically online, and new services are accepting Bitcoin payments increasingly. Blogging giant, WordPress, accepts Bitcoin payments, and African based mobile application provider, Kipochi, have developed a Bitcoin wallet that will allow Bitcoin payments on mobile phones in developing nations.
We have already seen people make millions on the currency. We are seeing increasing numbers of people experimenting with living only on Bitcoin for months on end, whilst recording the experience for documentary viewing.
You can buy a takeaway in Boston, coffee in London, and even a few cars on Craigslist using Bitcoin. Searches for Bitcoin have rocketed in 2013, with April’s hike and subsequent fall in the Bitcoin price. Last week the first large acquisition of a Bitcoin company was made for SatoshiDice, an online gambling site, for 126,315 BTC (about $11.47 million), by an undisclosed buyer.
This rapid growth in awareness and uptake looks set to continue, if trust in the currency remains strong. Which leads to the second dependency. Government regulation.
Although specifically designed to work independently from Government control, Bitcoin will inevitably be affected by Governments in some way. This must be the case for two reasons.
Firstly, to achieve high levels of adoption, Bitcoin will have to be accessible to large numbers of people, and that means spreading beyond the realms of hidden transactions to normal everyday transactions for individuals and businesses. Secondly, these Bitcoin transactions could become a trackable part of people’s taxable wealth, to be declared and regulated alongside any other kind of wealth.
The European Union has already declared that Bitcoin is not classed as a Fiat currency, or as money, and as such, will not be regulated in its own right. In the US, the 50 state system and number of bureaucratic bodies involved has inevitably made decisions more difficult, with no consensus reached thus far. Bitcoin is not considered to be money as such, but it is considered to act like money.
A thriving Bitcoin market in the US has a more uncertain future for now, and any conclusive legislation in the US could either have a very positive, or a very negative effect on the future of Bitcoin.