Digital Currencies Hover on the Brink

Digital Currencies Hover on the Brink

Anyone who has been following the dramatic rise of Bitcoin over the last ten years or so might be torn between buying as much as they can afford and selling up and getting out of the digital currencies game. The latter not least because of the scary proliferation of scamcoin – extremely tempting but short-lived digital currencies invented and hyped for the sole purpose of enriching one person and one person only, the creator. It is hard to follow the fortunes of genuine digital currencies as a layperson. Let us look at why this is.

Few Companies Accept Digital Currencies as Yet

As the full amount of digital currency is gradually retrieved, using worryingly high amounts of computing power, we could say we are in the opening scenes of digital currency. It is new and exciting, buried throughout cyberspace and just waiting for enterprising treasure hunters to come along and grab up as much as they can – this is the stuff that dreams are made of! But, just as you cannot walk into Trader Joe’s and chuck down a golden galleon in exchange for your purchases, you will have to sell your Bitcoin (or other digital currency) in exchange for local currency at whatever rate you are offered before you can take advantage of your new-found wealth.

Traditional Bankers/ Traders Don’t Understand/ Like It

Warren Buffet, that super-rich Midas who seems to know the future of the stock market in an eerily prescient way, is dubious about digital currencies. This does not mean that they are bad, per se, just that, as far as Buffet is concerned, they are not something that he is willing to trade in – and other traders and bankers, knowing Buffet’s vast experience with such matters tend to follow where he leads. And they are usually well rewarded for doing so: whether this will be the case with Bitcoin is still to be ascertained.

Not All Bad Though

Buffet notwithstanding, there are a great many people who are fully behind digital currencies, and not just as a tool for a deceptive get-rich-quick scheme. The reasoning behind Bitcoin (and it is a platform that other reputable digital currencies have modelled themselves on) is in producing a very stable currency that is free from governmental regulation, which it achieves by having no real estate and existing purely in a digital format. Bitcoin uses blockchain, a highly secure platform which makes it impossible for the currency to be stolen, faked or hijacked, with each coin retaining, within the blockchain coding, both proof of its authenticity and an audit trail, so to speak, of its history.

So, What Can I Do with My Bitcoin?

While many companies don’t yet accept Bitcoin, more and more are coming around to the idea. You can buy software from Microsoft, pop into Starbucks and Burger King for snacks , fly via Norwegian Air, and even have a flutter on Koi Casino, all with Bitcoin or your choice of digital currency. Most companies are starting with just Bitcoin – the grand-daddy of digital currencies – but others are a bit more adventurous: Koi Casino, for example, accepts Bitcoin, Litecoin and Etherium.

Should you invest in digital currencies? The jury is still out, with traditionalists and conservatives saying, ‘not yet,’ while the more adventurous say, ‘why not?’ So, why not? A modest investment that you can afford to lose should everything go bad could provide you with an unexpected windfall should they soar as originally intended by their creators!

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.