As the current world leader in the cryptocurrency market, Bitcoin has made some serious headlines and has seen some serious fluctuations over the past 6 months. Almost everyone has heard of them and almost everyone has their own opinion. Some cannot fathom the idea that a currency with any value can be created out of nothing, while some love the idea that something without government control can be traded as a valuable entity in its own right.
Where do you sit on the “Should I Buy Bitcoin?” the fence probably comes down to one question in the end: 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 per coin in February, to $260 per coin in April, back to $60 in March and back to $130 in May. The price has now settled at around $100 per Bitcoin, but it’s anyone’s guess what will happen next.
Bitcoin’s future ultimately depends on two main variables: adoption as a currency by a wide audience and the absence of prohibitive government intervention.
The Bitcoin community is growing rapidly, interest in the cryptocurrency has expanded dramatically online, and new services are increasingly accepting Bitcoin payments. Blogging giant, WordPress, accepts Bitcoin payments, and African mobile app provider, Kipochi, has developed a Bitcoin wallet that will enable Bitcoin payments on mobile phones in developing countries.
We have already seen people make millions from the currency. We are seeing an increasing number of people experimenting with living on Bitcoin alone for months, while filming the experience for a documentary viewing.
You can buy takeout in Boston, coffee in London, and even a few cars on Craigslist using Bitcoin. Bitcoin searches skyrocketed in 2013, with a spike in April and a subsequent drop in the price of Bitcoin. Last week, the first major acquisition of a Bitcoin company was made for SatoshiDice, an online gambling site, for 126,315 BTC (about $11.47 million), from an undisclosed buyer.
This rapid growth in awareness and acceptance looks set to continue if confidence in the currency remains strong. Which leads to another addiction. Government regulation.
Although it was specifically designed to operate independently of government control, governments will inevitably influence Bitcoin in some way. This must be the case for two reasons.
First, to achieve a high level of adoption, Bitcoin will need to be accessible to a large number of people, and that means expanding beyond the realm of hidden transactions to normal everyday transactions for individuals and businesses. Second, those Bitcoin transactions could become part of people’s taxable wealth that can be tracked and reported and regulated alongside any other type of wealth.
The European Union has already stated that Bitcoin is not classified as fiat currency, or as money, and as such, will not be regulated per se. In the US, the 50-state system and the number of bureaucratic bodies involved have inevitably made decision-making difficult, and so far no consensus has been reached. Bitcoin is not considered money as such, but it is considered to act like money.
The successful Bitcoin market in the US has a more uncertain future for now, and any final legislation in the US could have a very positive or very negative effect on the future of Bitcoin.
So should you buy Bitcoin?
The answer mostly depends on how risk-averse you are. Bitcoin will certainly not be a smooth investment, but the potential of this currency is huge.