Bitcoin Currency, Should You Care? Are You Missing Out?

By: ispeculatornew
Date posted: 04.03.2013 (3:00 am) | Write a Comment  (3 Comments)

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bitcoinsBefore getting started today, I’ll assume that some of you have never heard about BitCoin, so I’ll give you a bit of an introduction.

What Is Bitcoin?

Bitcoin is a currency started 2009 and meant to become a completely decentralized currency, working in a more efficient way compared to those run by central banks around the world. It is virtual (there are no physical coins or anything) and the “printing” of money is done on a regular basis but at a very controlled pace. Why? Economic theory says that inflation over the long term will be equal to the increase in money supply so having a more stable money supply would make it much easier.

Find out more at:

Wikipedia
Bitcoin official website

Does It Actually Matter?

Over the past few months, Bitcoin has certainly been getting a lot more coverage and interest.  Just last week, a major venture capitalist, CHris Dixon, declared Bitcoin part of the 3rd wave of currencies:

Three eras of currency
Commodity based, e.g. Gold
Politically based, e.g. Dollar
Math based, e.g. Bitcoin

The number of Google searches is also reaching its all time high:

bitcoin

 

Traffic to its website is also increasing based on Alexa.com data:

bitcoin-traffic

 

 

How Much Is A Bitcoin Worth?

The value has been increasing in recent weeks against the US dollar with one bitcoin being worth $95 or so. In fact, after starting to write this post, the value increased past $100:

screen shot 2013-04-01 at 10.32.43 am

Over time, a lot more is possible with bitcoins as many virtual and physical goods can be purchased with them and the virtual currency can also be exchanged for more “traditional” currencies such as US dollars.

Where Is This Headed?

It’s very difficult to say how quickly this trend will keep up but with diminishing faith in governments and worries that currencies or banks will end up “stealing” or making deposits worthless, Bitcoins are certainly an interesting alternative. Bitcoin ATM’s are even popping out

I’m Thinking About Giving It A Try

At this point, I’m considering trying it out, putting a few hundred dollars into Bitcoins to get a better understanding of how it works, the benefits and flaws (there are some). This could probably not help me generate more passive income but it could make my savings more diversified without a doubt.  There are certainly some worries around Bitcoins (such as security, their long term value, etc) but I do think the project seems more promising than ever and might be worth looking into.

Do any of you own Bitcoins or have you considered buying some? Would you hold some of your cash in Bitcoins?

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3 Comments

  1. Comment by Johan Lindén — April 4, 2013 @ 11:17 am

    Just another fiat currency. As the saying goes, all things eventually return to their intrinsic value. But as other speculative, hot, issues it can probable go up a lot or see the top the next day.

    A store of value most have a real value for it to work long-term. So either gold, oil or something else as currency.

    But hey, that’s just my opinion.

    Very good blog though! Keep posting!

  2. Comment by IS — April 4, 2013 @ 11:21 am

    @Johan – Very possible.. I have a lot of trouble getting my head around Bitcoins in the past few days

  3. Comment by Johan Lindén — April 4, 2013 @ 12:10 pm

    Horrendous English from my side! Hope you understood what I meant 🙂

    Edit:
    A currency’s objective is to be storing value. For that to work long-term it most have something of intrinsic. That is my belief. So either gold, oil, “a man hour of work” or something similar as currency.

    Have a great evening!

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