Part 1 of 2: Assorted Bitcoin bits and prices
By Dian Vujovich
One of my neighbors thinks that Bitcoin is a fantastic idea and that it will be around 100 years from now. Warren Buffet has called it a “mirage” and not likely to last two decades. Netscape co-founder Marc Andreessen Communication considers this almost intergalactic currency to be “bullet proof”. With Bitcoin conferences cropping up all across the country no matter what you think, there is no discounting the fact that since reaching its all-time high the price has fallen 50 percent.
The Bitcoin (BTC) story is a complicated for those of us who think of “mining” as something that happens when drills are used to get stuff out of the ground. Or, that using a medium of exchange with nothing backing it –other than the appeal of no- to low-fees —offers a hot diggity dog opportunity for a host of legal and no-so legal transactions.
That said, while the Bitcoin story began in 2009, today it is only one of at least 10 other cryptocurrencies. Oops, that’s wrong it’s not 10 but closer to 200.
Great word cryptocurrency is, isn’t it? The sounds of it remind me of Superman’s home planet Krypton and I’m guessing the two have more in common than merely a similar sounding name. But more on that fantasy idea (is it really?) another day.
Today’s blog is Part 1 of 2 and will focus on how those in the know view this Bitcoin cryptocurrency. Part 2 will be a listing of the various other cryptocurrenices.
To keep things simple, here is what various sources think about Bitcoin:
• Promoters and many futurists love it and see it as the only way to complete transactions.
• The IRS ruled that Bitcoin and other cryptocurrencies aren’t currencies but property, are not fungible, i.e. interchangeable, and therefore subject to capital gains taxation.
• Vance Crowe, founder of Articulate Ventures, a business-consulting firm in Saint Louis, MO and huge Bitcoin enthusiast wrote: “Bitcoin is also not a mirage to the one million people with wallets registered on Coinbase. It is real to all of the people who push $12 million dollars of volume through the Bitcoin network daily, and counting…… Mr. Buffett is wrong to analogize Bitcoin as a check or money order because Bitcoin does not represent money, it IS money. …When someone sends me Bitcoin, it is instantly spendable in its current form. I need not “cash a check” because Bitcoin is already money. Do not think of Bitcoin as a means to transfer dollars, it holds value by itself and it is highly liquid…”
• The Florida Office of Financial Regulation issued a consumer alert warning about potential risks associated with purchasing, investing in and exchanging Bitcoin and similar payment mechanisms because they are unregulated and uninsured.
•Bitcoin backers in the Sunshine state say this virtual currency holds appeal because it’s a faster no-fee payment system that both merchants and consumers find appealing.
• Mt. Gox, once the world’s largest Bitcoin exchange, filed for bankruptcy in February 2014 because of cyber attacks. The loss was an estimated 750,000 Bitcoins worth hundreds of millions of dollars.
•Janet Yellen said the Fed has no jurisdiction over Bitcoins but that Congress should look into the regulation of virtual currencies.
-The Financial Industry regulatory Authority (FINRA) has issued an investor alert titled “”Bitcoin: More than a Bit Risky.”
In the end, risk is one thing, price volatility another and then there are profits—and losses.
This from Bitcoincharts and Wikipedia: In 2011, a Bitcoin was barely trading at $1. On January 5, 2013, it was at $13.36 and by April 1, had ballooned to around $100. On April 10, 2013 it was $230 then fell to a low of $68.49 on April 17.
Bitcoin reached its all-time high of $1,124.76 on November 29, 2013. Today, March 28, 2014, Bitcoin exchanged hands at over $503 according to CoinDesk
Stay tuned for Part 2 coming tomorrow.
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