Unregulated, decentralized, and not even real; the virtual currency known as bitcoins have become a billion dollar market.
For around four years, a virtual currency known as the bitcoin has been growing in power. Bitcoins are an open source, unregulated p2p currency, and right now, there are about 10.9 million of them in circulation on the virtual marketplace. Collectively, they’re worth over a billion dollars, and if you want to buy one, the value is somewhere around $90.
They have stayed largely out of the media’s attention, partially because it has been difficult to tell whether bitcoins were a fad, a geeky niche currency or something bigger. However, in the less travelled areas of the internet, the bitcoin has grown to become the standard currency among black market traders, assassins and drug dealers.
Admittedly, having the reputation of being the currency of choice for crazy anarchists and criminals isn’t good for the bitcoin, but all of that is beginning to change: One reason for the increased market size of the bitcoin is that it’s now being adopted by forward thinking startups. A benefit for them is that bitcoins avoid the fees and policing which many businesses have fallen victim to when dealing with paypal.
Vires in Numeris translates to "Strength in Numbers"
There are more benefits as well; the virtual currency is an excellent alternative for when governments in economic trouble freeze its citizens’ bank accounts, as happened recently on Cyprus. Also, bitcoins allow for the transfer of money without needing to divulge personal information.
Unfortunately, there are some downsides too: First and foremost, the skyrocketing growth of the currency is turning the virtual currency into a giant bubble waiting to pop. In addition, it would be easy for governments to claim bitcoins are an economy ripe to be exploited by terrorists to fund their campaigns, so chances are that several legal battles will ensue over the next few years.
Whether destined to become a legitimate financial institution or a failed experiment, we should certainly be keeping an eye on the bitcoin. It popped up seemingly out of nowhere, and now that it's here, things are due to become rather interesting.