The value of the digital currency Bitcoin has been skyrocketing in recent months.
It’s only been around since 2010 and those who invested in it early say it’s a currency that will disrupt the world — eliminating the need for banks. But economists caution, not so fast.
“Bitcoin is the future, it’s digital currency that’s changing the world,” said Jim Blasko, Cryptocurrency developer.
In the digital world of crypto-currency, Bitcoin has become more than just 1’s and 0’s for Jim Blasko. “It’s freedom from banks, it’s freedom from the system, it allows you to hold onto something, or use it in little bits, to pay off small amounts of money,” Blasko said.
Bitcoin is a digital currency. It acts like gold or silver because there’s only so much of it, and demand drives the price. There are 21 million Bitcoins, a number that will never change. Blasko has been involved since Bitcoins began trading back in 2010. It’s paying off, he said.
“Three days ago, in Newport, I took 40 Bitcoin and bought a Lamborghini, and there was a time where that was about $40, those 40 Bitcoins.” That comes out to about a cool quarter of a million bucks.
In the summer of 2010, Bitcoins were worth less than a penny. Gold was just over $1,300 an ounce and silver were $27 an ounce. Now, after peaking at about $2,000 an ounce, gold is trading just under $1,300 an ounce and silver is at almost $1,700 an ounce. But Bitcoin is at $6,400 a coin.
Michael Terpin, the CEO of digital currency marketing and advisory firm, Transform Group, says the value has exploded just in the last year. “Bitcoin, block-chain, it’s a $170 billion market today, up from $10 billion a year ago, and it’s just getting started.” But not so fast, says UNLV economics professor Dr. Stephen Miller.
“I wouldn’t buy it, it tends to be a more speculative investment, I would call it, like commodities, and you’re not going to earn any interest on it,” Miller said. He calls the currency “volatile” and there have been some swings in value in recent months but he says that can be true with things like gold and silver.
Bitcoin insiders suggest therein may be the problem, that crypto-currency does not necessarily fit the current definitions economists use for currencies. “Banks are scrambling to figure out what to do and how to become a part of it now after they’ve called it a scam for years,” Blasko said.
Scam or not, it’s becoming more widely accepted as payment.
In Las Vegas, movie theaters, attorneys, hotels (The D), restaurants and even strip clubs take Bitcoin. And Blasko adds, from an employee’s standpoint, getting a Bitcoin tip isn’t a bad thing because it’ll likely go up in value over time. “But now those those $10, $20, $40 tips have become $400, $500 and $600.”