Bitcoin Is Poised for a New Era of Credibility and Acceptance – Digital Mining Investments
Bitcoin Is Poised for a New Era of Credibility and AcceptanceOn February 24, the largest Bitcoin exchange, Mt. Gox, suspended trading and shut down its website amid allegations of theft and insolvency. Losses of bitcoin have been estimated into the hundreds of millions of dollars. You would think this would be devastating news for Bitcoin, but after a one-day plunge, the cryptocurrency’s price bounced right back, stabilizing around the $560 mark. And there was a collective sigh of relief in the Bitcoin community, not because of the rebound in price, but rather because Mt. Gox is no more. Yes, there is a lot more to this story. If you are unfamiliar with the history of Mt. Gox, the clue to its origin is all in the name. Originally an online trading exchange for cards used in the game Magic: The Gathering (Mt. Goxв = Magic: The Gathering Online Xchange), the website turned to Bitcoin trading and quickly grew to become the world’s largest marketplace of the cryptocurrencyand a business well-known for trading inconsistencies, security breaches, and legal issues. Hardly a respectable start for a new type of money that could revolutionize the way the world handles financial transactions. The vast majority of serious Bitcoin supporters were happy to see Mt. Gox go. The key to seeing the opportunities that lie ahead for Bitcoin is in assessing those lining up to fill the void left behind by the defunct exchange, and taking into account a number of other developments in the digital currency world that happened in the first two months of 2014. In late January, the California State Assembly unanimously passed a bill legalizing the use of Bitcoin and other forms of alternative currency for the purchase of goods and services or the transmission of payments. в It is currently being reviewed by the California State Banking and Financial Institutions Committee, but seems very likely to pass. On the same day Mt. Gox went dark, Bitcoin industry leaders posted a joint statement on the Coinbase blog reasserting their commitment to the future of Bitcoin and pledging better-regulated exchanges with appropriate security safeguards that are independently audited and tested on a regular basis, adequate balance sheets and reserves as commercial entities, transparent and accountable customer disclosures, and clear policies to not use customer assets for proprietary trading or for margin loans in leveraged trading. в One new exchange that has the promise to live up to those standards is being developed by SecondMarket, a 10-year-old investment company with a history of getting in on the ground floor of tech-based investments such as Tesla, Twitter and Facebook. The company is a noted leader in the brokering of venture-backed private-company stock, so the news is creating quite a buzz in the Bitcoin community. The fact that this new exchange would be located in Manhattan is just the icing on the cake. And the good news keeps on coming. According to a February 27 article by Reuters, Japan is encouraging the international regulation of Bitcoin markets, adding to the theme of a more mainstream future for the digital currency. Bitcoin still has its share of critics, but its resiliency and the worldwide attention it is garnering speaks volumes about its future and the need for a global digital currency. With some of the shadier players like Mt. Gox out of the picture, and more credible and established financial institutions ready to take the lead, the future looks very promising for Bitcoin.
