Since bitcoin inched its way to more than $1,000 late last year, most of the news reports and discussions have been whether or not bitcoin will go to $10,000, how can someone earn money with bitcoin and is it too late to invest in the digital currency. Since most financial institutions realize bitcoin will eventually be used a competitive electronic payments system and not a currency, is it time to get rid of speculation to profit off of the virtual currency?
The early adopters of the cryptocurrency made an obscene amount of money, especially when the virtual currency hit $1,200. The newest entrants into the market, though they might make a little bit of money, will likely not see such exuberant wealth. Does it really matter?
For the time being, bitcoin is viewed by central banks and governments as a taxable commodity subjected to capital gains. They warned that bitcoins are risky, vulnerable to security dereliction and are speculative in nature. This might change in the future once the direct course of bitcoin is determined by the community: an alternative to Visa and Paypal or an alternative to the United States dollar and euro.
Of course, since there is no monolithic mind to determine this, the bitcoin community and marketplace will ultimately decide what it wants to be: a way to make a quick buck or a viable, long-term endeavor that can remain as a technological innovation as opposed to MySpace or a get-rich-quick-scheme.
The Winklevoss twins are betting big on the cryptocurrency and project one bitcoin will be worth $40,000 in the future. Others have pretty much concurred with the same thing. This is great for the speculators but what about those interested in being part of something more than making a few dollars? What if they want something more than just a flash in the pan, a bubble that is on the verge popping?
Perhaps the bitcoin leaders are doing the right thing by seeking out the establishment for regulations – this may very well be a confession that they realize bitcoin is not going to destroy the dollar and instead work in the same way credit card payment systems and PayPal operate.
In any case, it could be quite crucial that investing in bitcoin is more than just receiving dividends. In order to avoid the volatility, swings and rollercoaster rides, bitcoin needs to completely identify its purpose and future objectives.
Dogecoin has started doing it by revising its strategy to inflationary. The Internet meme-based currency reportedly had a better first 100 days than bitcoin’s first 1,000 days. In the next 10 years, will dogecoin be the true alternative currency or will bitcoin remain supreme? Time will tell, one bit at a time.
