Does the Bitcoin Fantasy Pay?
Bitcoins are a $4 billion fantasy serving 4.3 million customers in 33 countries worldwide currently, during 2016. Bitcoins allow individuals, businesses and developers to trade with no regulatory authority. Bitcoins are similar to the wikipedia project in design. No one owns or controls bitcoins, and anyone who wants to can participate in the project. Bitcoins facilitate transactions not possible through previously existing banks and accounting systems.
Satoshi Nakamoto and Martti Malmi developed the original bitcoin software, the Bitcoin Core, which allows vendors to transact business efficiently without using a third party payer. Essentially, bit coins are virtual assets recorded in “handshakes” at nodes in the software network. All transactions are recorded in a block chain, or public ledger.
Nakamoto copyrighted his invention in 2008, and released it in 2009. Nakamoto and Malmi designed the system software to preclude any one person from gaining control of all of the bitcoins. Software engineers enhanced the bitcoin project during 2011 and 2012 and added additional webpages. In 2013, bitcoins were transformed and a new translation phase became a permanent part of the software. System documentation was completed during 2014.
For private individuals, bitcoins remove transaction fees and end overdraft charges. Bitcoins increase disposable income if goods and services can be obtained within its network, but bitcoins are not insured by the Federal Deposit Insurance Corporation. Individuals saving bitcoins as an investment should consider that hackers have emptied cloud “wallets,” and viruses have consumed bitcoins housed on private computers.
Are bitcoins a sustainable way to do business, or merely an attempt to defraud the United States Treasury and evade the Internal Revenue System? CNN Money ponders the future of the unregulated bitcoins in its infographic. Governments control their currency and tax individuals and businesses for their sustainable revenue.
Bitcoins also attract gamblers, fraudsters, and drug dealers. Bitcoin casinos allow the less adventurous to place bets and pay video games for the “digital currency. Gamblers find virtual “slots, jackpot slots, blackjack, roulette, video poker, scratch cards, and keno” through online Bitcoin casinos. Casinos offer welcome promotions to induce enthusiasts to invest time on their websites. Fifty free spins deposits bitcoins in your account, and you can reload your digit account at 50% off. You can search for online reviews of Bitcoin casinos. With no traceable record of sales or purchases, bitcoins initially facilitated the sale of stolen merchandise, guns, and narcotic drugs. Bitcoin software was enhanced to identify criminal activity within its network.
The United States Securities and Exchange Commission brought Trendon T. Shavers and his Bitcoin Savings and Trust into the United States District Court for the Eastern District of Texas for fraudulently offering and selling securities in 2013. Trenton Shavers was arrested in 2014 for federal securities fraud while operating a bitcoin bank worth $4.5 million. Shavers bought a BMW, vacationed in Las Vegas, and covered his living expenses with $220,000 of investors’ funds during 2012. Most of the $4.5 million was honestly repaid investors at 7% interest. The United States Federal Court sentenced Trenton Shavers to 18 months out of a possible 3-year prison sentence.
CNN Money tweeted the addition of (XBT) to its list of publicly traded stocks on February 18, 2015. Fact or fantasy, CNN Money lists the value of a share of bitcoin stock at $238.71 on August 23, 2016. CNN Money’s Jose Pagliery published Bitcoin: And the Future of Money in September 2014. Pagliery’s book is recommended reading for all who save, trade, or invest in bitcoin technology. CNN Money’s XBT webpage updates the “bitcoin stock price” daily and presents the latest Bitcoin news.
Nasdaq lists United States businesses trading in bitcoins. It’s refreshing to know that after the multi-billion dollar TARP bailout and efforts to secure our banks and our financial future, that major businesses, like Goldman Sachs, invest in bitcoins.
Mike Caldwell, a 35-year-old engineer, mints physical bitcoin tokens encoded with “tamper-proof” seals. It’s hard to imagine saving for your child’s college education in bitcoins thinking that bitcoins are the currency of the future, but to Thomas Way, Villanova University Science Professor, Bitcoin has “tipped the scale of change” in “how we pay for things.” Others found that investments in Barbie Dolls and Mickey Mouse paid off many years later when the value of the toys “paid for their kids college education.” The value of the toys may “fund their retirement.”