Is it a Good Idea to Buy and Trade Bitcoins?
Bitcoin is perhaps the most exciting aspect of the new technology. A short while ago, people were talking about the internet, but it was all about the hype. So imagine what will happen if the price of Bitcoin increases to $1000 per coin. What can the economy and the financial system do with all that money?
First of all, what is this thing, Bitcoins, anyway? In short, this is a type of virtual currency that is very difficult to trace. In other words, it is a worldwide, permissionless currency with a very small known user base. The use of this sort of money is not officially recognized by any country, yet the money that is received in exchange for Bitcoin is usually worth a small fraction of its face value.
One of the main things to consider is that Bitcoin is not regulated by any government, and it can be sent to anyone anywhere in the world using email. Also, in the extreme online markets for Bitcoins, there are fake money as well. How can this be? Well, anyone can buy, sell, and trade Bitcoins as easily as they would accept another form of money.
One problem with the internet is that it is a private transaction, not a public one. With a means of exchange like Bitcoin, you can exchange Bitcoins anywhere you want. All you have to do is send it to a network of users. This gives the currency the ability to be used by people from any country.
There is also a great demand for a worldwide currency. This currency has a very unique element to it, and we are witnessing the first time of such a thing. With the emergence of Bitcoin, it is only a matter of time before more people are looking for ways to engage in global trade with little or no money in advance.
As a currency, it is difficult to track. That is why it is often used for money laundering and for illicit transactions.
This is not to say that it cannot be used for commerce or that it is not part of the world economic web. The potential for this currency is enormous, but it does have some disadvantages. Many merchants have put their products and services on the black market, and the government in some countries does not seem to be overly concerned with this currency.
Even in the most high profile crimes, such as Silk Road, the sellers and buyers did not have to exchange their Bitcoin for cash. They were able to obtain and use Bitcoins without ever having to pay a dime for a single Bitcoin.
This currency is very difficult to track. It is widely accepted online, and even the government cannot seize it because it has no central authority. For someone trying to avoid suspicion, there is nothing easier. So is it a good thing or a bad thing?
The short answer is that Bitcoin is a very exciting technology. It can change the way that we look at currency and trade, and that is a very good thing.
But the real change will happen if it does get to a large market. Then we will be able to see the benefit of a currency that is not owned by the government, that can be traded in the normal market, and that can be used to buy goods and services in a big way.