Bitcoins are a virtual currency that was
introduced nearly three years ago. They have received a bad reputation because
many people have used them to buy drugs, pornography and gamble over the
Internet. However, consumers have used them for legitimate purposes as well.
Some experts believe that bitcoins are going to become a major currency in the
near future.
How Are Bitcoins Different?
Bitcoins are a unique form of currency that
differs from others in many ways. First of all, people do not physically take
possession of them. Bitcoins are stored electronically in an account on a
bitcoin server. Another major difference with bitcoins is that there is only a
finite supply of them.
Direction of Bitcoins
Many technocrats think fondly of bitcoins,
but most normal people have never heard of them. Nevertheless, they are
starting to gain more attention and more people are expected to use them soon.
Bitcoins are changing the way people think
of money. They may not necessarily be able to overtake the dollar or euro
anytime soon, but it is has become much more popular in the past year. The
value of bitcoins have increased by nearly 140% since the beginning of 2012.
That is a bigger increase than any fiat currency in the world.
Value of Bitcoins to Consumers
People can use bitcoins to purchase any
number of goods and services over the Internet. They may also consider using
bitcoins as an investment.
The value of bitcoins may soar against many
fiat currencies that are constantly printing more money since there is only a
finite supply of bitcoins in circulation. People may make large returns on
their investments holding onto bitcoins when their governments use quantitative
easing strategies.
Can Bitcoins be a Sustainable
Currency?
Many experts wonder whether or not bitcoins
will last indefinitely. Government officials have said that they have a number
of concerns about the use of bitcoins and some leaders insist that something
needs to be done about them.
The government has been unable to track
people using bitcoins on the dark webs and may not be able to do much to deter
them from using them in the future. However, they create a number of other
risks as well.
Many people are worried about using
bitcoins, because they can be lost if a server crashes or the system is hacked.
Consumers are also vulnerable to fraud since bitcoins are largely untraceable.
Many of these concerns are common to online banking systems for fiat currencies
as well, but the possibility of losing virtual money is a larger concern.
Nevertheless, bitcoins seem to be growing
in popularity and may be a dominant currency in the coming years. Some experts
believe that they may eventually become a world reserve currency, but that
could be eons away.
