Bitcoin promises to be “an innovative payment network and a new kind of money.” It is the first ever truly virtual currency with no physical manifestation like coins or paper bills. It relies on advance cryptographic techniques and multiple verification steps to ensure safety and integrity of all its coins. The new currency had an initial promising rise in 2009, boasting how the technology could completely revolutionize transactions by providing a form of payment not bound by any particular country’s laws or economy. However, it did not take long for many of its shortcomings and risks to come to light. Processing delays at numerous exchanges caused by the system’s inefficiencies led to significant value drops and resulted in heavy fluctuations of hundreds of dollars. Worse yet, the encryption and signing mechanisms have proven susceptible to hacking, resulting in theft, scandals and further value drops. Despite all this, Bitcoin, the troubled virtual currency, is making a comeback again, and recent events show the battle is hardly lost.
The Apple Store has recently updated its approval guidelines with instructions on handling some virtual currencies, opening up the doors for treating Bitcoin as a proper legal tender in the future. The store is a primary marketplace not only for various music albums, but the iPhone Apps as well. Some of the most popular apps, such as Candy Crush or Clash of Clans, already bring in millions in advertising and micro-transactions. Apple’s changes and openness are slowly paving the road to a whole new lucrative market for the virtual coins to gain ground on.
On top of that, the famous rapper 50 Cent has now enabled the customers of his online store to pay using Bitcoin. There is a reason why countless marketing companies rely on the popular faces of celebrities in their advertising campaigns – these prominent role models are able to sway even the most reluctant of buyers. To all the fans of 50 Cent, the message is clear – Bitcoins are now de facto valid and acceptable to use for any transaction.
Furthermore, a team of Polish developers has also created the first Bitcoin embassy in Europe, preparing for a comeback of the troubled virtual currency. They provide a variety of legal perspectives, investing advice and selling or buying services, acting like a regular consulting or investing firm for traditional fiat money.
All these factors help Bitcoin prove its legitimacy, attempting to put it on equal footing with any other traditional currency. As a result, its value has already risen by 80 percent in the past month, approaching almost $700, reports CNBC. Rapid fluctuations like these are not new for Bitcoin, which has been going up and down in value anywhere from one cent to one thousand dollars. The value drops usually happened after security issues such as the aforementioned hacking of Mt. Gox, or various other exchanges closing down (and in some cases, taking the money with them).
Nonetheless, between existing popular supporters of the troubled virtual currency, such as OkCupid or Foodler, and new big players embracing the payments, it is becoming clear that Bitcoin is making a comeback again. For better or worse, it is here to stay. At the same time, however, it is hard to predict when the fluctuations of its value will stabilize, or if that is even possible given its virtual nature, unbacked by a tangible fiat money or a country’s economy.
By Jakub Kasztalski