When James Howells tossed out an old hard drive recently, he didn’t realize he’d tossed out a fortune. But the hard drive contained 7500 Bitcoins the Welsh-born IT professional had “mined” several years before – now worth a whopping $7.5 million, as the digital currency is trading for $1,000 a coin. That’s a strong showing that reminds world markets that the new coin on the block is here to stay – and ready to flex its muscles as one of the world’s strong currencies.
As economists and financial experts speculate that the Bitcoin might become a true global currency that challenges all other existing ones, and Christian scholars point to it as the one world currency mentioned in the prophecies of the Bible’s Book of Revelations, one thing is clear: the Bitcoin has clout. And it’s a serious player on the world monetary stage.
We’ve been tracking the Bitcoin’s progress in this space for some time, and the coin’s journey toward respectability hasn’t always been smooth. That has led to speculation that either it would become the coin of global cybercrime, or it would be shut down by a number of organizations threatened by its anonymity and independence from conventional banking practices.
Whether those things will happen remains to be seen. But whatever the future holds, the Bitcoin – and some of its lesser known competitors such as the Litecoin and Feathercoin — have changed the way we think about money: what it means, where it comes from, and how it’s used.
Currency can really be anything that a society agrees upon as a unit of exchange, whether that society is a remote tribe, a large country, or a smallish band of tech-savvy innovators. Currency is a commodity, and in our days of highly institutionalized governments and banking entities, it’s backed by a government’s reserves.
That means currencies can fluctuate in value as economic conditions change at home and abroad, allowing “strong” currency to be worth more and “weak” currency to be worth less – hence the constantly updated currency exchanges that allow investors to speculate in monies as well as other investments. And, when currency is backed by tangibles such as gold, the market value of those assets also plays a part in keeping a country’s currency weak or strong.
By that standard, digital currency is pretty strong, at a thousand dollars to one. And as we’ve reported before, it’s not subject to those market fluctuations that make other kinds of currency swing up or down. For those reasons, and in spite of the downsides, digital currencies hold a lot of appeal in an increasingly tech-oriented world.
Dire predictions notwithstanding, digital money is clearly here to stay – and ready to take its place with other currencies on the world stage. And as Jason Hartman says, investors hoping to build wealth with income property need to stay alert and informed about the that changing landscape of money. (Top image:Flickr/judithrith)
The American Monetary Association is the source for financial and monetary news you can use. Read more from our archives:
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