About a year ago I wrote my first blog about Bitcion – “Bitcoin – dead or the currency of the future!” discussing whether or nor Bitcoin is here to stay. A lot has been said and written about the same over last 12 months and a lot is happened in the life of Bitcoin as it tries to grow out of its toddler phase. Yes that is right six years since it was first introduced in January 2009, Bitcoin seems to have survived the early stages of its life cycle.
Like every growing child Bitcoin has its flaws – it’s not regulated, no governmental backing, frauds costing 100s of millions of dollars to investors, shutdown of the biggest exchange – Mt. Gox, illicit use of the currency, and the list can go on. However as with every child bitcoin also has a brighter side to it – it makes transactions simpler, eliminates transaction fees, it’s transparent, and again the list can go on.
All this toddler needs is a care-taker who is willing to keep up with it’s fallacies while building up on it’s strength. And based on developments over the last 12 months it seems like Bitcoin has found the support it is seeking to grow into adolescence. New York State’s Department of Financial Services in in the process of finalizing regulations for Bitcoins. Bitcoin is now accepted by major retailers including the likes of Dell, Target, Amazon, Overstock, and so on. On top of these indicators of strength the latest news is that a Bitcoin ETF, approved by Financial Industry Regulatory Authority (FINRA) is almost here for anyone and everyone to buy on OTC market. These developments and many more in the recent past along with a relatively stabilized price point only suggests that Bitcoin is not a foster kid anymore. It has gained enough attention and support to announce its presence and is here to stay at least for now. The growth of Bitcoin has even inspired countries like Ecuador to instill its own digital currency to aid unbanked population.
These recent developments only suggests that people value Bitcoin and sees its ability to change how we think of and use currencies. However Bitcoin still needs to further strengthen its place before the said revolution can be seen. Only time will tell where it goes from here but for now it seems to be a revolutionary adult in the making.
This article was first published on March 3, 2015.
Bitcoin, the first and the most prevalent of 100s of crypto-currencies, has been in news lately for not necessarily for all the right reasons. Though this crypto-currency has survived for almost 5 years and has weathered multiple crashes in valuation over the years the future of Bitcoin is still questionable.
The concept in itself is promising especially in this age of globalization. A currency that crosses borders securely, without third party intervention, and no transaction fees can definitely boost international trades and prove to be a boon, more so for small businesses. As John Naughton of “The Guardian” said – Bitcoin serves the function of being a medium of exchange by making small online payments very cheap and easy. However as with every great thing in the making there are downsides to Bitcoin as well. The very same features that are its unique advantages can be and has been exploited, for instance Silk Road, an online market for illegal drugs, accepted only Bitcoins as the method of payment. Moreover the lack of government backing and regulations also leads to lack of consumer protection which makes it a risky currency to hold on to – as has been the case with Mt. Gox, once the world’s largest Bitcoin exchange, collapsed and suddenly disappeared with $350 million worth of Bitcoins. Thus it is no secret that Bitcoin has its share of disadvantages and limitations in its current state however what remains unanswered is if Bitcoin can be the currency of future and only time will answer that question. In the meanwhile what is worth noticing is that the fall of Mt. Gox is not synonymous to the fall of Bitcoin. It might rather prove to be beneficial to the future of Bitcoin. Though the value of the currency dropped to about $400 in response to the news it slowly crawled back up in the matter of a few days at over $600 per Bitcoin and in turn it has drawn attention of authorities. This along with installations of Bitcoin ATMs in multiple cities across the country only reflects the confidence that the proponents of Bitcoin have in the future of the currency. Additionally, the fall of Mt. Gox has also highlighted the need for regulating the currency and the response seems promising. Instead of an attempt to dump the currency, steps are being taken to further strengthen it. One of the major steps in the direction has been to form the Emerging Payments task force that comprise of nine state regulators to study the virtual currencies. It would be interesting to see how the advocates of Bitcoin reacts to the effort of regulating the crypto-currency as it violates the basic tenet of the currency – its decentralized nature. However for Bitcoin or for that matter for any crypto-currency to become a long-term stable currency of choice it needs to be backed and regulated which is in contrast to the basic premise of crypto-currencies. The key to its success would be to maintain the balance between regulations and innovation.
The future of Bitcoin though questionable, if recent turn of events is anything to go with is definitely far from dead yet. However at this point it would suffice to say that the currency has faced a number of tough questions and has only come out stronger and is stronger and more popular than ever before gaining a lot of traction from advocates of Bitcoin. Whether or not these efforts will fortify the future of Bitcoin is yet to be seen but at this time it would suffice to say that Bitcoin is gaining a lot of support and it might be too early to write it off.
This article was first published on March 8, 2014.