Amidst a variety of recent economic troubles, U.S. consumers and spenders have learned how to weave through the choppy waters of financial insecurity and uncertainty. One new option that the curious and tenacious can take a closer look at is the market for bitcoins, which has steadily become more mainstream since its public launch in 2009.
Bitcoins are a digital commodity – a currency that resides entirely within computers and data systems. It was once only used in arenas other than mainstream markets, but it is now accepted as legal currency in select parts of the world, such as when renting a building or purchasing goods. Some major cities across the U.S. and throughout the world are now opening up bitcoin ATMs, where users can access their balance.
Even though one bitcoin has previously cost anywhere from $400-$600, this price fluctuates every hour based on market demand. So while it takes a bit of capital to invest in bitcoins as an everyday user, those who do have more cash to plunk down have the opportunity to experience the newfound conveniences that bitcoin provides.
While technology experts and seasoned business owners are divided on whether or not bitcoin and its respective technology will be the next big investing boon, Tim Draper of Draper University comments that bitcoin is very likely to be the next step in the world’s progression of trade methods. He mentions that since purchasing one bitcoin has been the equivalent of about $400-$600 for a few years, the currency is not likely to deviate from stability.
Even though the bitcoin upheaval has provided flexibility to some, most traditional retail outlets and businesses still do not accept bitcoin as valid payment. Amazon.com, one of America’s largest online stores, has stated that they are not presently open to the virtual currency. Most regular consumers are still used to paying with cash, credit or debit cards, and it may be a few more months or years until bitcoin is a widely accepted means of payment.
Bitcoin usage does stand to become more mainstream because of how many related companies are cropping up and using the market to create jobs. The first-ever bitcoin job fair will be held on May 3rd in Sunnyvale, California.
Dane Atkinson of SumAll, a company that provides marketing data tools, contends that if merchants and retailers do choose to accept bitcoins, they have a great advantage over those that do not, allowing the few consumers who have already delved into bitcoins to have a wider variety of outlets for their purchases. Businesses that take this route can often experience an increase in consumer loyalty. When buyers know that they have a variety of options through which to pay at a store, they are more likely to return.
The IRS announced on March 25th that bitcoins are open to a capital gains tax. A capital gains tax is profit that is collected from an asset that sold at a higher amount than the amount that the asset was purchased for. This caused some bitcoin aficionados to grow worrisome over their digital transactions. Part of how bitcoins have become popular so quickly is that they often do not come paired with transaction fees or deductions. The U.S. government is still determining whether or not they deem that any further action is necessary.
For students newly graduated from college, people with low credit, or those who simply do not want to use a credit card, the development of bitcoin technology has the power to change the dynamics of how the world conducts business. Where trust is essential with credit, all that is required for a bitcoin transaction to take place is value. The mainstream market is always looking for newer and more convenient ways to handle the exchange of goods and services, and the increasing bitcoin popularity has the potential to become as influential as traditional channels.
By Brad Johnson