Maxwell Rodriguez, online payment expert at SecureTrading, analyses what 2014 might have in store for Bitcoin.
If you picked up a newspaper, watched the news or generally went outside during the final months of 2013, you will almost certainly have been bombarded with news about Bitcoin.
The virtual currency was absolutely everywhere you turned during the final months of the previous year – exploding in popularity, value and worldwide recognition. So, what exactly is Bitcoin, and should we believe the hype when it comes to the potential for a singular global online currency?
Invented in 2009 as the first open source software currency, it was not until the later stages of 2013 that the value of Bitcoins became significant enough to capture public imagination.
Once the currency did enter the awareness of the general public, there was no stopping the Bitcoin bandwagon. With one Bitcoin worth roughly $20 (£12) in January, by November the value had risen as high as $901 (£547).
As you would expect for anything which enjoyed such a meteoric rise, Bitcoin did not remain a secret for long. While the currency had only previously been valued by the particularly internet-savvy, the general public was now keen to discover what all the fuss was about.
Where can you spend Bitcoins?
In the early days of the currency, Bitcoins had often been used for online purchases of a dubious nature, including websites which sold pirated software and ‘legal highs’. As Bitcoin became more mainstream, the uses of them increased greatly – with more and more businesses and individuals beginning to accept the currency.
This is sure to continue as public awareness of Bitcoin grows, but for now, here is a list of some of the best ways to spend this virtual currency in style:
Eating out – ROOM77, a restaurant based in the German city of Berlin became the first to accept Bitcoins as a method of payment, allowing customers to pay for their food and drink through the online currency. They have since been joined by a handful of additional venues, including Firehouse BBQ in Salt Lake City.
Online shopping – If you prefer to spend your Bitcoins online, Booze4Bitcoins allows users to choose from an extensive range of alcoholic drinks that can be paid for using the virtual method of payment, while Nestor Games became the first company to offer board games in exchange for Bitcoins. Even Nike got in on the act, with Bitcoin payment available for a range of their trainers.
Going to space – Yes, you read that correctly. Richard Branson attracted a great deal of publicity when he announced that Virgin would be conducting flights into space for paying customers, but you may not be aware that Bitcoins are an acceptable method of payment for this ultimate adventure.
More on Bitcoin:
- Passion Capital’s Stefan Glaenzer on sizing up a Bitcoin venture
- Coinfloor kicks of Bitcoin operations
Trouble on the way?
Such was the demand for Bitcoins that one British man was discovered at a waste tip, looking for a computer hard drive he had thrown away which contained an extremely valuable number of Bitcoins. After digging through mountains of rubbish for several days he finally had to admit defeat – the valuable haul lost forever, discoverable only by the rats and seagulls.
At one stage it looked as if Bitcoins’ rapid growth would continue indefinitely, with prices set to rocket even higher. Successes in the United States and Germany served to increase investors confidence and excitement, however a major setback emerged when attempts to establish the currency in China fell flat, causing a significant blow to the continued growth of this virtual currency.
A bright future
While the year-on-year value of Bitcoin has grown impressively, a month-on-month slowdown suggests that a singular global online currency is still some distance away. Despite the Chinese setback however, a YouGov survey in December 2013 found that 56 per cent of Bitcoin shareholders believed the value of the currency would reach $10,000 (£6,084) by the end of the following year.
Investors clearly remain very confident in the future of Bitcoin and online currency in general, and all the evidence so far is on their side.
The world is becoming more and more connected thanks to the internet, and with online shopping quickly replacing the traditional high street store, it makes sense that an online currency would follow shortly along.
Should this confidence prove to be well placed, Bitcoin will not be making investors millions, but indeed billions.