Future of Bitcoin
The future of Bitcoin or crypto-currencies in general are now largely left to Governments and Central Banks to decide and steer. Otherwise technologically it has proven to be an effective medium of exchange that has certain advantages over the current fiat money and services built around them.
Bitcoin has particularly major advantage over the current international money remittance services, such as Western Union, MoneyGram or traditional Bank Wire Transfers, which normally charge up to 15% service fee. As for Bitcoin, sending and receiving bitcoins is free and almost instant.
Another area where Bitcoin has clear advantage is, over online payment gateways. Usually eCommerce sites use 3rd party payment processing systems like PayPal, WorldPay, 2Checkout and other Credit Card processing systems. These services normally take a cut from each transaction that happen on eCommerce sites. With the implementation of Bitcoin as the payment option, eCommerce sites could reduce their reliance on 3rd party payment processing systems and increase their revenue margin. Since, using Bitcoin would mean “no more incurring transaction fees” for each transaction.
On the other hand, since Bitcoin is not governed by any Government or Central Bank, Governments have been quite worried on the possible misuse of Bitcoins; particularly in the areas of money laundering, buying and selling of illegal things etc.
So far, governments are struggling to set a direction for Bitcoin. Singapore government has stated that it’s not going to interfere with Bitcoin usage for the time being. On the other hand, China has taken a stricter approach by restricting the definition of Bitcoin as “commodity” rather than “currency”, and banning the usage of Bitcoins as payment options online. As for Swiss parliament, they are going to vote on treating Bitcoin as a foreign currency sometime next year. Other governments have taken the “wait and see” approach for the time being.
So, yes, a lot of uncertainty out there for Bitcoin. And each of these news from Governments and Central Banks have been adding more volatility to the already volatile Bitcoin prices.
How to buy Bitcoins in your Country
Startups in some countries have been more active than others when it comes to building Bitcoin related businesses, particularly exchange platforms for buying and selling Bitcoins. Following is a list of such platforms that allow you to buy and sell Bitcoins with your local bank accounts.
- Australia – https://www.btradeaustralia.com and https://www.coinjar.com
- Canada – https://www.vaultofsatoshi.com and https://www.cavirtex.com
- China – https://btcchina.com
- Hong Kong – https://anxbtc.com
- India – https://www.unocoin.com
- Philippines – https://buybitcoin.ph/
- Russia – http://www.btc-e.com
- Singapore – https://www.itbit.com and https://www.fybsg.com
- South Africa – https://bitx.co.za
- South Korea – https://www.bitup.co.kr
- Sweden – https://safello.com
- Turkey – https://secure.koinim.com
- USA – http://www.coinbase.com
- UK – https://bittylicious.com
- Buy from other users in your City or Country – https://localbitcoins.com
There are also many other Bitcoin exchange platforms, but the funding options could vary. Some use Credit Card which is quite straight forward, but some require you to deposit funds in the form of Bitcoin, which is quite inconvenient for the first time buyers. Here is a full list.
Should you invest?
If you are an early adopter and would like to seize the opportunity on Bitcoins. Please be warned that future of Bitcoin is still unclear. Furthermore, due to its high price volatility, you could also lose considerable amount of your investment. Personally I would suggest to have “what you can lose” approach when it comes to Bitcoin investments. And “what you can lose” amount can differ for each person. If you have extra money that you wouldn’t mind losing (given Bitcoin’s potential very high ROIs), then I guess you could consider investing in Bitcoin.
Fun fact: US Dollar circulation in the world is 1.23 trillion. Maximum amount of Bitcoins that will ever be produced is 21 million. But 1 bitcoin can be further divided into 100 million Satoshis (smallest unit of bitcoin).
- 1 BTC = 100,000,000 Satoshis
- 1 Satoshi = 0.00000001 BTC
- 1 BTC = 1000 mBTC (millibitcoin)
- 1 mBTC = 100,000 Satoshis
If Bitcoin takes off, and becomes a mainstream digital currency, let’s say 25% of what current USD circulation is (that’s 307.5 billion)… then 21 million has to be divided up to 307.5 billion. That means price of Satoshis will increase tremendously, and price of Bitcoin will skyrocket. This is the best scenario.
Worst scenario would be, Fed to declare Bitcoin as illegal.. which would result in the demise of the crypto-currency. And that’s where your “what you can lose” approach would be useful.
Whatever the outcome is, it looks like 2014 will be a very important year for Bitcoin and will probably set the tone for Bitcoin’s legality as an alternative currency moving forward.
What’s your take on Bitcoin? Please share in the comments section.