Before the Chinese government’s involvement and millions of pounds being left in rubbish tips we wrote about Bitcoin and whether it has a future within legitimate business.
After spending a day or two etching out a draft, it was almost outdated by the time it was published. Bitcoin’s wildly fluctuating value and the breathless press coverage surrounding the cryptocurrency meant trying to nail an accurate summary was like a game of whac-a-mole.
Here we are a few months down the line, and Bitcoin’s fortunes are just as turbulent; the first accountancy firm endorsed Bitcoin (not us!), ATM’s have started dealing in the currency, and Government financial regulators around the world are showing concern. The graph below shows the price of Bitcoin since our last post – hardly what you’d call stable!
Those fantasising about a rapid move into everyday use for decentralised cyber currencies seem to be slowly accepting the reality; apart from within certain niches, it’s going to be an arduous process before Bitcoin is taken seriously by everyday businesses and consumers.
One interesting development in the cyber currency market has caught our eye recently; there are a whole host of competitors springing up – almost on a weekly basis – with an estimated 80 cyber currencies to date (the major players and their associated market caps are listed here). The announcement of a Kanye West inspired crypto currency proved a particular highlight.
On a fundamental level, though, this experimentation can only help to further the cryptocurrency cause. Alternative systems like Dogecoin (named for a recently-popular Internet meme), introduced towards the end of 2013, are learning from the problems that forerunner Bitcoin encountered in a hope to reach a wider, more practical, demographic.
One of the fundamental strengths of Bitcoin and its newer siblings is its decentralised nature. No Federal Reserve, FCA or equivalent yet exists to regulate its taxation and conversion. This is also, however, one of the things holding them back. What investor can have faith in an unregulated currency? Attempts at regulation are beginning in earnest, the Inland Revenue Authority of Singapore recently published guidelines on how to tax cyber currencies (and not to toot our own horn too much, but their solution is very similar to the conclusions we drew in our first piece on the subject).
Elsewhere Laxmicoin, which takes its name from Lakshmi, the Hindu goddess of wealth, is India’s answer to Bitcoin and is also solving problems – the currency’s creators are seeking regulatory clarification ahead of its inception to ensure its can be used with confidence by individuals and businesses alike.
Whether it’s cyber currencies inspired by gods (or merely those that think they are), Bitcoin is no longer the only player on the field – 2014 could well be the defining year for cyber currencies.