<p>When the Bitcoin (BTC) currency was first described in 2008, it was more of an intellectual experiment, not to be seen as an actual electronic cash system.<br />
Forward to 2013 and people are not only trading Bitcoins but also using them to pay for real services and products.<br />
The question now is: will this unregulated currency continue to gain legitimacy or, is it just a fad?</p>
<h2>The Renegade Currency</h2>
<p>Currencies around the world have taken a number of knocks during the current financial turmoil and, as such, many people have lost faith in them as a commodity.<br />
Or rather, they’ve lost faith in the governments and banks that control these currencies.<br />
Bitcoin is the answer, not only to anarchists, but to many of the disenfranchised, as Bitcoins aren’t issued by a central bank or backed by a government.<br />
In fact the virtual currency is governed by a computer program and all transactions are transparent.<br />
Traders are also allowed to exchange the coins anonymously (which critics say is what makes it attractive to drug dealers and other unsavoury business people).<br />
The BBC explains how BTC works by:”using publicly available software that operates via a network of about 20,000 powerful computers, units of the cyber-currency are created by the application of a mathematical formula in a process known as &#8220;bitcoin mining&#8221;.<br />
Adding to the appeal of BTC is the fact that there will only ever be a limited number of coins &#8211; the system only allows for the mining of around 21 million – and as such they’re not subject to inflation.<br />
The BBC also mentions that owners of the coins needn’t entrust them to banks for safekeeping; which also means that banks can’t lend them out.<br />
Essentially the coins promise the kind of financial security and control that many find so lacking in the traditional financial structures at present.</p>
<h2>Looking to the Future</h2>
<p>Banks and regulators don’t seem quite sure what to about Bitcoins.<br />
The CRA (Canada Revenue Agency) has issued a statement in which they indicate that BTC transactions are taxable and that such transactions need to be declared.<br />
Across the ocean, The Guardian reports that the currency has become a preferred medium of exchange at bars and shops in Berlin.</p>
<h2>To Trade or Not to Trade</h2>
<p>That really is the question. Tech Week Europe reports that the currency was estimated to be worth of $266 which dropped to $105 and has since risen again to around $138.<br />
It’s far from stable as the currency suffers like most concepts dependent on the internet: cyber attacks.<br />
Wired reported on a study conducted by computer scientists Tyler Moore and Nicolas Christin in which they’ve determined that:<br />
&#8220;Exchanges handling 275 Bitcoins&#8217; worth of transactions each day have a 20 percent chance of being breached, compared to a 70 percent chance for exchanges processing daily transactions worth 5570 Bitcoins.&#8221;<br />
As the current price increase (from $105 to $138) indicates; investors are eager to trade with the currency despite the safety issues.<br />
However, these security concerns will need to be addressed before traditional financial structures will provide loans to BTC exchanges and the like.<br />
For the private person interested in getting involved the advice is much the same as getting into Forex trading or the like: know the risks and proceed with caution.</p>
<h5>Featured images:</h5>
<p><span class="license">License: Creative Commons</span><br />
<span class="source">image source</span><br />
Pippa Green is a London-based blogger with a keen interest in finance and is currently in need of a forex trading platform.</p>

The Future Of Bitcoin: A New Currency Or Just An Interesting Experiment?
