The value of bitcoin is rising faster that anyone would have imagined, and that’s mainly because it has so many uses right now.
The value of bitcoin has quadrupled since the beginning of the year, and grew by 40% within the first two weeks of August. Such growth is remarkable, and cannot be matched by even the most exciting stock in the market. Because of its potential for even further growth, bitcoin has become an asset where speculators can invest just to profit from the price changes in the market. In fact, bitcoin has already made a lot of millionaires this year, and we’re not done yet.
Besides, bitcoin is also taking a position as the gold standard where investors park their money when the economy is uncertain. Bitcoin received a lot of demand, especially from Japan in the past few weeks due to fear of rising tension between North Korea and the US. Gold used to be the go-to during such instances, but investors are choosing bitcoin now because it can also add profits along with the safe harbor of capital.
Various betting, bingo and online bitcoin casinos have been quite successful due to the privacy they offer as the bitcoin keeps the person’s identity hidden. Bitcoin uses blockchain technology where the user’s identity is converted into a private key – a random sequence of characters. This private key identifies you as the owner of a certain number of bitcoins in the network, without revealing your actual name, address, ID number and so on. Most gamblers would prefer to keep their identity hidden for various reasons, but some have more reasons than others.
Take gamblers in countries like Norway and Finland where gambling is restricted only to the state-regulated gambling institutions. If a player from one of these countries gambles in a Maltese or any other EU-regulated casino, it is still considered as a gray practice. Therefore, these gamblers often engage in online bitcoin casinos to circumvent these laws.
Bitcoin is also faster and cheaper to transfer from one person to the other. In fact, this was one of the main selling points for the virtual currency as was proposed by Satoshi Nakamoto when he invented it. Compared to other money transfer systems like the Western Union or bank wires, bitcoin transactions are instant. As a money transfer system, it is also cheaper because there are very few charges required. The bitcoin network is decentralized, therefore there is no profit-making company hoping to make money from the transactions. The little charges incurred are usually only an enticement to the miners keeping the network alive, and they are usually very small.
Hiding assets from authorities
This is not one of the bitcoin uses we endorse, but we have to acknowledge that it does happen. The same anonymity bitcoin provides can be used by those who would like to hide their assets from their governments. Consider the case of taxation by the Federal Government in the US; only a handful of people reported their earnings from bitcoin, yet the US bitcoin market is second to Japan’s.
Clearly, a lot of people are hiding their assets from their governments, and they just have no response to it since bitcoin still remains anonymous. Some residents also use bitcoin to hide assets, but perhaps for a slightly noble reason. Citizens in China, for example, may want to keep their assets hidden from a communist government they don’t fully trust. We may not endorse this use of bitcoin, but again… don’t shoot the messenger.