5 Ways Bitcoin Is Changing the Face of Money
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The idea of a digital currency distributed peer-to-peer without a centralized monitoring system was first floated in an anonymous paper released in 2008. That “cryptocurrency” would soon be known as bitcoin, frequently abbreviated as BTC. And in the half decade since bitcoin went from a theoretical concept to a widely accepted form of money, it has seen itself hover near worthlessness and obsolesce and rocket back to value and relevance many times over. Recently, BTC has trended toward the latter: just this week, bitcoin suddenly broke its own all-time record for the price of a single unit
5 Bitcoin Can Be Converted to “Real” Money
A bitcoin offers its holder the unprecedented ability to transform an untraceable form of money into several forms of hard currency. Those holding bitcoins can convert their digital currency into U.S. dollars, Euros and several other types of universally accepted cash. Thus, not only do bitcoins offer a new way to use currency, but they can actually create new value in and of themselves.
4 Bitcoin Breaks Down Barriers
International trade and commerce is often stymied by complicated regulations and complex diplomatic situations. BTC turns the paradigm of commerce on its ear by removing the barriers between two individuals wanting to connect but hampered by disparate currency valuation/acceptance and by trade relations. Any two people, be they from the same town or should they live thousands of miles apart, be they from allied nations or from sworn enemies, can accept BTC as a legitimate currency and can conduct business unfettered by rules and untethered to the volatile economies of any one nation or even the world at large.
3 Bitcoin Has Value Well Beyond Illicit Activity
Many tech watchers, economists and those concerned with law enforcement initially assumed that BTC would largely be used for illegal—or at least extralegal—activity. This meant in the worst case exchange for drugs, weaponry and other hazardous materials, and so on. In the least-worst case, it meant circumnavigating taxes and fees. However, bitcoin has proven to be a largely legitimate form of currency, used to pay for the purchase of digital games and music or the sale of regular gift items and books. BTC was often used on the infamous drug trading website the SilkRoad, but that site was recently shut down by federal authorities and still bitcoin is going strong, proving it is much more than a currency created for shady dealings.
2 The Value of Bitcoin Is Likely To Rise Indefinitely
Part of the brilliance of bitcoin is the currency’s finite nature. The creator (or creators) of bitcoin established a preordained limit to the number of units that will be created, capping the final BTC count at 21 million. As scarcity drives up demand, the value of a bitcoin is likely to ascend as the units created (or “mined”) near this cap. BTC units can still be traded indefinitely, though, so even after the 21 millionth and final bitcoin has been unlocked, people can still drive the cost per BTC higher and higher.
1 A Single Bitcoin Is Currently Worth More Than Any Dow Jones Stock
The recent surge in the value of bitcoins has seen the cryptocurrency reach $270 USD. That means this strange digital monetary unit is actually worth 70-plus dollars more than the current leader in value for a Down Jones Industrial Average stock: Visa is only trading at $198.