Bitcoin: Currency of the Future?

WHAT IT IS

  • Bitcoin is a cryptocurrency – a digital currency in which encryption techniques are used.
  • Bitcoin not regulated, buyers and sellers are anonymous, and there are no transaction fees.
  • In 2008, a white paper was released under the pseudonym of Satoshi Nakamoto, detailing what would be widely regarded as the first modern cryptocurrency initiative.
  • Numerous alternative cryptocurrencies, or “altcoins,” have emerged since bitcoin broke into public awareness.

WHY IT MATTERS

Acceptance of Bitcoin has grown from hobbyists to universities, companies, and some governments. If someone bought $1,000 of bitcoins in July 2010, when the price was $0.05, it would be worth $46,000,000 today.

  • THE CONSERVATIVES – “Stability is King”

  • THE TECHIES – “Time for Innovation”

    • Safety: Bitcoin is nearly impossible to counterfeit due to complicated code system that encrypts each and every transfer, ensuring complete anonymity and safety to every user.
    • Digital Gold: Adding more than 30% to its value in just a week, one Bitcoin is worth more than $2,600, over twice as much as an ounce of gold.
    • Market Boss: Bitcoins are not controlled or regulated by a singular authority – their flow is determined entirely by market demand.

WHERE ARE WE NOW

  • In the startup industry: Coinbase (a website for buying, selling and storing Bitcoin and other cryptocurrencies) is talking to investors about raising money, at a $1 billion valuation.
  • In the education industry: The University of Ohio is hosting classes about Bitcoin and other cryptocurrencies and some colleges accept bitcoin as payment
  • In the financial industry: Market capitalization of digital currencies has soared over 50 percent to more than $90 billion in the past seven days.

THINGS TO THINK ABOUT

  • With the value of Bitcoin surging in a short period of time and rapidly growing competition, is this another bubble waiting to burst?
  • How will governments and agencies regulate and tax this new technological capability and potential industry?