A new bill has been sanctioned in California legalizing transactions in the Bitcoin, which is still experiencing a steady rise in commercial use following this recent news. The law is intended to take advantage of the growing trend of digital currency.
For those unfamiliar with bitcoin, it was established as a new currency in 2009 by an unknown individual using the alias Satoshi Nakamoto. Nakamoto’s true identity is shrouded in such an aura of mystery that it is still uncertain whether the name represents one person or a group. Bitcoins have eliminated the necessity for a middle man, rendering banks obsolete. There are several advantages to using bitcoins. Transactions with the coins are typically processed much faster than routine inter-bank wires; in some cases, bitcoins can be processed instantly. Another benefit to consumers is the substantially lower fees (sometimes none at all) associated with the Bitcoin in comparison to fees acquired through the use of debit card transactions.
The government does not regulate the usage of Bitcoins. They are owned solely by the consumers. Merchants can rest assured their hard-earned profits cannot be commandeered by a central authority. In addition, it is extremely difficult to commit fraud with Bitcoins, since it is virtually impossible to retrieve the coins once they have been sent without expressed consent. Security is also a concern for anyone making transactions online, and bitcoin has acknowledged that with its system of two unique keys assigned to every individual. The keys are used to electronically sign transactions, so no other personal information is required. Inflation has been taken into account as well. In order to address this potential issue, a maximum amount set at 20 million bitcoins was established. No more than that will ever be created.
The new law legalizing the use of the Bitcoin was signed into effect Saturday by California Governor Jerry Brown. The bill follows an antiquated prohibition in the state enacted for the purpose of outlawing transactions in anything but US currency. The Democratic Assemblyman responsible for the bill, Roger Dickinson, created the new law as a response to the rising popularity of other forms of digital currency already in use throughout the state, and he believes the bill will ensure the legality of all business transactions. “In an era of evolving payment methods…it is impractical to ignore the growing use of cash alternatives,” Dickinson said. Following the lift of the restrictions in California, bitcoin rates rose to still new heights. According to CoinDesk, the digital currency saw a closing price of $635.73 on June 30, which was a 6.2% increase from the previous day. Additionally, attention circulating a recent auction of 30,000 Bitcoins which were seized from Silk Road, an online black market, suggests the coins are attracting more interest than ever before. According to Barry Silbert, CEO of SecondMarket and Bitcoin Investment Trust, a demand for 48,013 Bitcoins resulted from the auction.
Bitcoins are still experiencing a rise in value following the recent legalization of the digital currency in California. With their various appeals and limited regulations, it is evident virtual transactions are paving the road towards a society which discontinues the use of paper currency completely.
By Sam Williams