If you’ve picked up a business publication or perused a financial website, you’ve probably heard about bitcoin. Bitcoin is the first digital currency to gain traction in financial markets. The concept of a global digital currency that is not tied to the politics of a specific government is appealing. Its value is refreshingly democratic. It is the people who determine what a bitcoin is worth since its value is determined purely by what people are willing to pay for it.
In the beginning, there will be a lot of volatility. One day, a bitcoin can be worth $1000. The next day, its value plummets to $250. But as vendors slowly adopt bitcoin as a means of payment, its credibility builds in the marketplace. The more widespread its adoption becomes, the more we will see stability in its value. This will increase investor confidence and its value will slowly and steadily climb due to restricted demand. At that point, we are dangerously close to a global shift in wealth.
Examples of growing confidence in bitcoin can be seen in three recent events:
Overstock.com accepts bitcoin for payments
Andreesen Horowitz invests $25 million in Coinbase, a company that initiates bitcoin wallets
Lloyds of London opens the world’s first bitcoin storage vault
During the infancy of this global currency, early adopters will be the ones to experience potentially massive gains or loses. Accurate, reliable, timely information is critical during this initial period of volatility. Unfortunately, this information is hard to come by. The internet is littered with misconceptions and erroneous information about bitcoin. Bitcoin information becomes a valuable commodity.
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