Last week saw sharp fluctuations in the value of the currency of the Bitcoin, which may predict the unknown future waiting for this virtual currency.
In recent months, investors have scrambled for the encrypted digital currency "Bitcoin", which emerged 8 years ago. After the value of the Bitcoin at the beginning of this year does not exceed one thousand dollars, last week achieved an unprecedented rise to more than $ 15,000.
But in just 24 hours of record-breaking $ 15,000, their value fell by about 20 percent to only $ 13,000.
The Bank of England said that the volatility of the exchange rate, up and down, and the media attention, "investors should be careful" about the currency of the Bitcoin.
While someone says that the currency of the Bitcoin is nearing its peak and will be declining and that it is no more than an unfounded bubble, others feel it may continue to rise.
- Bitcoin excel in its value on gold for the first time:-
"There's nothing new this week," says David Yirmak, a professor of finance and business management at New York University. "The currency of Bitcoin is always fluctuating. Anyone who wants to invest in it must have the ability to take risks. "
- What is the currency Bitcoin Specifically?
Ten years ago, perhaps no one would believe the idea of dealing with an invisible currency, not subject to government controls and not outside the internet and we might have attributed it to science fiction films such as Matrix or Blade Runner.
But in fact, this is the Bitcoin, a digital alternative to coins or coins. Although this currency is not an official currency, because it is not issued by a government or state, it may be used for online payment and can be digitally converted, to avoid falling into the maze of bureaucratic procedures for banks that consume long hours and provide transaction fees and waiting times.
The total nominal value of all the world's Bitcoin now exceeds $ 167 billion. Bitcoin is the first digital currency of its kind.
- Will the Bitcoin climb or fall?
Some say that crossing the $ 10,000 barrier signals the entry of the Bitcoin currency into a new phase.
"What are we going to do in the second round of a nine-round match, what would happen if that currency went out among the majority of people?" Said Ronnie Moas, founder and research director of Standout Research, an investment and stock specialist and currency advice consultant.
Mr. Mawas said the currency of the Bitcoin could yield at least as much profit as Amazon and Google, and he would like to invest a lot in the Bitcoin instead of staying on the sidelines.
- The virtual currency Bitcoin "should be used with caution in investment":-
"Given current trends, 200 million people will compete in the future to acquire a few million Bitcoin," he said.
The arrival of the Bitcoin value to $ 10,000 is tantamount to a "formal admission of the currency", Mawas said, as if it were an attractive facade to promote the petit.
"The currency of the Bitcoin was not credible when it was $ 1,000, but now it is a salty target."
But some do not expect this success for the Bitcoin in the future. "It's a bubble that will give many people a time of ease and prosperity as they rise, and then they will back down," said Joseph Stiglitz, Nobel Prize-winning economist for Bloomberg.
However, the average citizen may not feel the presence of the Bitcoin currency on the ground to some extent. Of course, there are some exceptions. You cannot use the Bitcoin in most shops because their legal status varies from country to country.
In many places, concerns have increased that the currency will become a means of money laundering or facilitate the sale of illicit goods because it is encrypted and reveals little information about user identity and transaction data.
- Are there are needs government controls?
While some believe that Bitcoin is the future of money, others believe that the hype about digital currencies will go away once governments take serious action to regulate virtual currency.
- Bitcoin "Cash" may cause chaos in the virtual currency market:-
What about the digital currency situation at the moment? "It's a huge mess," says Tedge Draga, a research scientist at the Massachusetts Institute of Technology's Digital Currency Initiative, who describes the state of decentralization in the currency of the Bitcoin, meaning that no central authority, such as a government or bank, supervises its distribution or use.
Tedge Dragea and his team are working on developing systems to increase safety standards in Bitcoin transactions and facilitate future use. But now describes the digital currency as "serious" if left on its current status.
"In gold, I think governments can regulate the work of the institutions they deal with, not the gold itself, and in that case, they will not have an income in determining the weight or color of the metal, but just organize everything they can," he says.
It is therefore assumed that government regulation will lead to the explosion of the Bitcoin bubble.
Kenneth Rogoff, professor of public policy and economics at Harvard University and former chief economist at the International Monetary Fund, believes the international community will tighten the screws on these digital currencies and that it will not become an official and law-abiding currency, even in countries that have done their best to legislate the use of Bitcoin, Because governments will not allow people to make huge financial transactions through ways that cannot be traced.
Rogoff says that governments are now unleashing biotechnology to drive technological innovation.
While Rogoff expects the Bitcoin currency to face fierce competition with the rise of other competing digital currencies, he says it could become like MySpace's social networking site, whose star has been blown away by other social networking sites. The biggest challenge these currencies will face is regulation Government.
"It is completely ruled out that the encoded virtual currency dominates financial transactions, and that people stop paying taxes," he says. "Governments are the ones who enact laws and can also change them to prevent you from reaching your goal."
"The key point is when governments will pull the rug out from under the feet of virtual currencies, but that will require some international coordination, but I do not think the Bitcoin will be worthless, some rogue states will continue to support these currencies."
What about the current time? Mr. Mawas says the volatility we saw last week in the price of the Bitcoin may signal "the beginning of a sharp rise and fall in Bitcoin prices."
Whether prices have risen to record levels or fallen to their lowest levels, Dreig said, "There will undoubtedly be more jobs for lawyers in the coming days."