By
Kirsten Salyer: Actually, there's an entire currency: Bitcoin, an online-only
currency based on a decentralized network. It's unregulated, hard to
track and increasingly common. Since Sunday, downloads of three
Bitcoin-related apps have surged on Spanish charts, Bloomberg Businessweek reports.
The
interest in Bitcoin coincided with news that the Cyprus government
planned to tax savings accounts as part of the country's bailout
program. The value of the online currency increased more than 20 percent
in the past two days to $64, according to the latest price information.
The downside is it's a currency that has experienced price fluctuations, occasional hacking and account thefts, and is a favorite for black-market transactions, including almost 2 million a month in illegal online drug purchases at the Silk Road marketplace. That some Europeans are investing savings in Bitcoin isn't exactly a sign of confidence in European banking.
According to a European Central Bank report published in October, increased demand for Bitcoin "could have a negative impact on the reputation of central banks," especially if the public perceives Bitcoin's rise is due to "a central bank not doing its job properly."
Bitcoin removes financial institutions completely from transactions, allowing users to conduct two-party exchanges over the Internet without a middleman.
People can exchange local currencies into Bitcoins on online exchange sites and store them in e-wallets. Payment-processing services such as BitPay allow merchants to accept the currency as payments. The virtual money can buy a range of goods and services, including video strippers, gun parts, pizza and WordPress upgrades.
Without regulation or integration into existing banking structures, Bitcoin doesn't yet appeal to investors looking to park large amounts of money. But as the currency grows more mainstream, with banking confidence eroding, Bitcoin is something to watch. Source
The downside is it's a currency that has experienced price fluctuations, occasional hacking and account thefts, and is a favorite for black-market transactions, including almost 2 million a month in illegal online drug purchases at the Silk Road marketplace. That some Europeans are investing savings in Bitcoin isn't exactly a sign of confidence in European banking.
According to a European Central Bank report published in October, increased demand for Bitcoin "could have a negative impact on the reputation of central banks," especially if the public perceives Bitcoin's rise is due to "a central bank not doing its job properly."
Bitcoin removes financial institutions completely from transactions, allowing users to conduct two-party exchanges over the Internet without a middleman.
People can exchange local currencies into Bitcoins on online exchange sites and store them in e-wallets. Payment-processing services such as BitPay allow merchants to accept the currency as payments. The virtual money can buy a range of goods and services, including video strippers, gun parts, pizza and WordPress upgrades.
Without regulation or integration into existing banking structures, Bitcoin doesn't yet appeal to investors looking to park large amounts of money. But as the currency grows more mainstream, with banking confidence eroding, Bitcoin is something to watch. Source
No comments:
Post a Comment