The non-government-backed digital currency known as bitcoin (BTC) has soared to prominence in recent weeks after a meteoric rise in value from less than $50 to over $250 in just days followed by a devastating crash back down to about $85 today. Amid the wild volatility, analysts and experts weighed in to speculate about what may be going on, with some seeing bitcoin as the wave of the future and others downplaying it as a potentially interesting anecdote for historians to examine that is unlikely to displace establishment currencies.
Bitcoin supporters and users come from all across the political spectrum, but the cyber currency is especially popular among libertarians, anarchists, and advocates of limited government. One reason for that, according to experts, might be because bitcoin offers a decentralized and supposedly anonymous way to do business — allowing users to purchase everything from drugs and guns to pizza, cars, and even hotel rooms online.
Another plus for anti-establishment types is that the bitcoin system largely bypasses big banks and especially government-backed central banking currency monopolies like the Federal Reserve and the European Central Bank. While the supply of fiat dollars or euros can be expanded indefinitely — surreptitiously robbing all holders of the currency — the amount of bitcoins in circulation is strictly limited.
While the market for bitcoins remains relatively small so far, its growth has been phenomenal, according to experts and people who use it. Facing increasingly fierce economic crises, people from Argentina to Cyprus have been pouring money into the digital currency in recent weeks and months — many as a hedge against inflation and a novel way of protecting wealth. That trend is expected to continue, though the regulatory environment remains somewhat uncertain.
“I do believe in BTC,” Executive Editor of Laissez Faire Books Jeffrey Tucker, a prominent free-market thinker who has come out strongly in support of the digital currency, told The New American. “Central bankers might be nervous. As for government, BTC puts regulators in a hard position. Do you warm to it and tax it — this seems to be the current way— or try to stamp it out? So far, we are seeing a tolerance, mainly because it is already too big and too functional.”
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