Bitcoin Digital Currency Taking Off, Gaining Popularity

It seems the bitcoin revolution is set to continue as it finds its way onto the currency markets. Initially it was a purely web-based phenomenon but now with the increases in value this virtual, decentralised currency has undergone traders are sitting up and taking note, realising that speculating on future bitcoin values may be the way to go. Specifically it was this year (2013) that saw bitcoin values sky-rocket and it has a great deal to do with people increasingly losing faith in fiat currencies. This was no-doubt precipitated by the European sovereign debt crisis, all the talk surrounding the future of the Euro as a currency, and then finally the events that took place in Cyprus in March of this year. The panic that has spread through other European countries as they have had to witness Cyprus residents having their deposits taken has caused them to lose the last bit of faith they formerly had in the banking system. The worry as the whole Cyprus debacle was going down a couple of months ago, was that it would spark a run on the banks in other Euro-zone countries as they began to worry that their own deposits could be the next to go. The unexpected knock-on effects of this crisis have been that bitcoin has seen a massive surge in popularity, with many residents of Europe’s poorer southern nations beginning to see the digital currency as a viable alternative to the legal tender of their own nations, and most importantly as a safer alternative. Now, many still fear that bitcoin could just be the next bubble set to burst but some interesting aspects of this new currency make it unlikely that it will be the next dot.com boom and bust story. The most important of which being the fact that the maximum amount of bitcoins in circulation will top out at around 21 Million according to the mathamatics that governs how the currency is ‘mined’. Every four years the amount of new bitcoins available are set to halve until the preset date of 2040 when all 21 Million bitcoins will be in circulation.

But perhaps the most interesting aspect of this story is the fact that it is rapidly becoming a respected tradable asset. This no-doubt owing to its desirability as a relatively safe place to store wealth (it’s difficult to decide what bitcoin is, it’s a currency for all intents and purposes but it’s limited quantity, as well as it’s newly-found safe haven status make it behave somewhat like a commodity, such as gold). There are a number of exchanges now up and running where users can trade bitcoins at market prices, or at prices set by the exchanges themselves. In addition to this a slew of online financial services are springing up surrounding bitcoins. Bitcoin lending services, equities exchanges, futures, forex, even binary options are now available using bitcoin as a currency!

 

It’s a confusing subject and one that an article such as this could never hope to do justice to, if you are interested in finding out more about how to get into the bitcoin racket you could do a lot worse than checking out http://en.bitcoin.it/wiki/trade.

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George Milios

George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.

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