By Michael Sanchez
For many years, making deals and trading around the world has been done time and time again. It first began with trading goods like stone or hunting for labor. Move forward quite a bit and people were trading gold and silver for jobs and more. Today in modern society, currency dictates the trade mainly through the US dollar– one of the most powerful forms of currency. Now, something else is coming to the forefront once again.
What is this new form of trade or currency? Well, it is known as electronic currency or cryptocurrency. This is a digital currency in which encryption techniques are used to regulate the generation of units of currency and every transfer of funds. This operates independently from a central bank.
This means a cryptocurrency, like Bitcoin, is mined in order to be obtained without buying it straight from someone else. To obtain a Bitcoin or a number of Bitcoin, a person would have to know how to “mine” them from the computer. Either with a mining team or by themselves, the person(s) setup the computer to complete complex math problems in order to receive payment. For completing one complex equation, the user is awarded 25 Bitcoins!
So, what’s the big deal about having some Bitcoin? Well, here is the thing, currently a Bitcoin is worth $8722.00 per coin as of the time of writing this article. It will fluctuate up and down for a while due to many reasons. It’s possible to buy things like flights, hotels, trips, stocks and many more things with Bitcoins. The price of Bitcoin will vary day to day and can be found on many reputable websites.
Buyers and miners of Bitcoin, may sell or hold their currency depending on the market. This is the main thing that people do in order to make money. Since the prices change so often, varying from $100 to $2,000, this is how people make their profits or lose it all after buying.
A frequently asked question is, “Should I invest in Bitcoin?” Is it worth the price currently? Well, that all depends on if one is a buyer who is willing to gamble. Also, it depends on if one is trying to make a quick buck or in it for the long haul. In any case one can invest coin into stocks or universities. If not, one may just buy it when the market crashes and hold on to it till the prices go back up.
Bitcoin is actually valued by many people and communities. An important set of communities are Universities since a lot of them accept Bitcoins. Legal and accounting firms also value them, so if there’s ever a need for a lawyer and the cryptocurrency is at hand, then there you go.
The biggest question that someone curious of Bitcoin will ask is, “How is this currency regulated?” Well, currently in the United States, The National Conference of Commissioners on Uniform State Laws voted to approve a model act providing regulation for digital currency on a state level. This means that in different states Bitcoin should be regulated fairly efficiently. According to Francine McKenna, in Market Watch, many countries are doing multiple different things to regulate Bitcoin.
After reading all these things about Bitcoin, one thing still has not been explained yet, which is why the prices fluctuate so much. Jonathan Todd Baker in Investopedia, writes that there are three main reasons for this, the first being the rate of adoption is harmed by bad press. Meaning, the coverage Bitcoin gets is mostly negative, keeping a lot of potential buyers away, thus making them worth less.
The second reason is that the perceived value fluctuates, because there is a set amount of Bitcoin in circulation, making it much harder to get hit by inflation. Still, people believe that the price is inflated.
The third is that the store value is undermined, which means a lot of people believe that it will not be useful in the future. These are three of the many things that keep the prices bouncing up and down, according to Jonathan Todd Barker in Investopedia.
Although Bitcoin is not currently in its prime price value, there is a chance that it will sky rocket back up in price. Being a new currency, it is also believed that we are just scratching the surface of this new trade possibility. Doing your own personal research can really help decide how you can deal with Bitcoin in the future!