Bitcoin is the new virtual currency that has captivated the attention of the entire world. When Bitcoin first hit the world news scene it was in relationship to the demise of Silk Road, the website where consumers could purchase drugs anonymously, by using Bitcoins as the payment system. Now, with more nations recognizing the currency as a reputable means of payment, the currency’s value is skyrocketing.
Bitcoin prices were much cheaper, when a single coin cost $11.00 in November of last year. However, it recently passed the threshold of $1,000 per coin and today hit a high water mark of $1,242. This is an amazing growth rate for the currency, and it has not gone unnoticed by the world.
Meanwhile, gold, which has always been considered a stable form of currency, is dropping in value. It has fallen from more than $1,700 per ounce to a price of just $1,250 per ounce. Gold has registered a drop of around 25 percent so far for the year. This could be a real problem for the U.S. and other countries who’s currency systems are backed by gold bullion.
The Federal Reserve Chairman, Ben Bernanke, said that Bitcoin may be the answer for the future, noting that it “may hold long term promise.” Could it be that we are about to witness a major change in the way that individuals, businesses, and even nations store their wealth. Will our currency be backed by a virtual coin rather than solid gold as it has in the past?
I don’t think that’s what is happening with the popularity of Bitcoin. After all, you still have to use real currency to pay for it, whether its U.S. dollars or Japanese Yen, which both are backed by gold.