The Unprecedented Rise of Bitcoin

As the online currency bitcoin continues to rise in popularity, Tim Healy examines the currency, and asks whether online currencies have a future.Since the early days of unregulated currency, to our current market valued at well over a billion dollars, online currencies such as bitcoin have skyrocketed in popularity and accessibility. The idea of a medium enabling the user to unlimited anonymity and a platform immune from federal taxation has regulators quaking behind their fiscal policies.Perhaps bitcoin stands out more than other online currencies due to its nature of decentralisation. Bitcoin seems to thrive in a field where its competitors have fallen short: in terms of evading regional and international governments. This in itself serves as a catalyst to cultivate a growing online movement towards buying contraband in online black markets, due to the ease of transfer and lack of regulation.
Bitcoin seems to thrive in a field where its competitors have fallen short: in terms of evading regional and international governments”
This said however, it’s not only the tech-savvy libertarians screaming for the decriminalisation of class A hallucinogenics that find these forms of currency attractive; quite the opposite. Towards the tail end of 2013, a single unit of bitcoin would have been valued upwards of $1000. This is a stark comparison to the $13 valuation received only a mere 11 months earlier that sent investors to their search engines. Forbes Investing even stretched as far as to label 2013 as ‘The Year of the Bitcoin’.Despite its popularity and prices, serious questions still remain over the crypto-currency’s legitimacy. There is a much darker side to the shadow cast by this mysterious currency. Accompanied by the infamous crash of Silk Road, the name of bitcoin was brought into serious disrepute due to its heavy involvement. Bitcoin was the fiscal medium that facilitated the transfer of drugs, child pornography, assassinations, weapons and various other illegal paraphernalia on the darknet market. It is the anonymity that enables these elicit transactions.The total value in revenue through the currency of bitcoin was reported at around roughly 9,519,664 bitcoins, which, as reported by the FBI equated to roughly 1.2 billion dollars in USD. The fallout from this barely fazed the resilient bitcoin, as its stock price only took one day to recover. This in itself only proves the ability these online currencies have to recuperate and prove their resilience, something traditional stock markets cannot exactly be accredited for.The pivotal questions remains however: could Bitcoin be the inflection point it was previously destined to be? The Wall Street Journal certainly believe so, recently reporting boldly that Bitcoin could perhaps prevent future economic disasters such as the recent Greek financial crash. Proposing that crypto-currencies such as bitcoin have the ability to democratise how money is created, removing at its very root the issue over which the Greek government and the EU seem to be locked in a tug of war. There will always be a dilemma in the fate of Bitcoin, and that is its acceptance by state regulators and seemingly traditional banking sector. Bitcoin’s hopes of globalisation will not be helped by the standpoint of world power China, who holds the firm position that the currency is a form of possible money laundering and a severe threat to perceived financial stability.This worrying prognosis from the economic powerhouse, accompanied by the very simple fact that bitcoin can be manipulated by online speculators doesn’t bode well for opting in new investors. That said, who knows? Maybe in five years time we will be paying our student contribution charge with bitcoins after another Eurozone collapse.