Bitcoin a Noteworthy Investment During Downturn

Some would say Bitcoin has had its day, “the profits are behind us” some say, “It’s too risky, and even if they had a consistently stable price, the coins themselves aren’t liquid enough.” While most ‘normal’ people would consider bitcoin a “sketchy and  confusing”. Gina Sanchez said, in response to an IRS statement regarding the taxation of Bitcoins “You basically have a whole bunch of cyber geeks trying to tout themselves as a monetary authority. That’s just not going to fly.” First of all, it’s ignorant to denounce a currency without fully understanding the essence of bitcoins, optimism in its most abstract sense leads to bitcoin capital gains.

I’m not saying that hoping for the price will go up will make you rich, rather that an overall pessimistic view of the coins, or exploitation, such as miners selling coins as they’re mined, leads to problems in the demand and supply of the coins. According to Blockchain.info and Coinmetrics, Bitcoin has a daily transaction volume of roughly $50.4 million, (source –  http://www.coinometrics.com/bitcoin/btix) compared to Western Union at $216 million, Paypal’s $397 million, and Visa’s $16.5 billion. This is one of the simplest pieces of information that can allude to the broad adoption of the currency. The problem with these companies are that they are payment processing companies, while Bitcoin is a network, mint, and processor.

The real power of bitcoin does not lie in capital gains, that is a gamble, rather it lies in its infrastructure. The power and ability for anyone to buy a currency, and to rely on it for gains is an incorrect use of the currency. It should be used as often as possible like a fiat currency, used to buy goods and services. Without a network of people using Bitcoin as a currency, it will not be taken seriously as a currency; allowing doubts to affect the price. People with Bitcoins should spend percentages on things money can buy in order to strengthen the usability of the coins.

One problem lies in merchant approval is the lack of bitcoin price stability, this is the reason why many merchants allow a bitcoin processing company to pay them cash anytime someone spends bitcoins at their establishment. I have faith in the cryptocurrency, it is very young, and regulation is long overdue. Face it, you missed the big profit era, now the currency is headed towards mainstream adoption, and just like anything else, there will be regulation. The government puts the idea in our heads that regulation legitimizes industries, markets, etc., and without this idea bitcoin might remain a sketchy investment, but with full government regulation and people playing by the rules, it could lead to a tremendous acceptance of a valuable currency, unlike anything of our time.