Legal Standing of BitCoins

wino_bitcoing

GOT ANY SPARE (BIT) COINS

By now, if you’re still one of those folks asking, “what the hell is a Bitcoin?” Don’t worry, you’re not alone. Introduced in 2008 by a group of programmers under the name Satoshi Nakamoto, Bitcoin is defined as peer-to-peer technology that operates outside of central authority or banks. Bitcoins, which exists solely in software, uses cryptography to control transactions and prevent the re-use of spent currency. When a payment has been validated, it becomes public record once recorded in a public ledger known as the blockchain. Payments are then processed by a network of private servers owned and operated by “miners” who benefit from transaction fees and newly minted Bitcoins. Currently, there are roughly 12 million Bitcoins in circulation trading at about $965 each as of today.

In early 2012, when Bitcoins popularity began to catch the eye of mainstream financial insiders such as The Economist, it was initially charecterised as currency for online black market traders like the infamous Silk Road.  Internet black markets, such as Silk Road were described as havens for all things illegal including; drugs, guns, pirated software, and pornography due to the untraceable nature of Bitcoins. However, that was so 1-year ago, and a lot has changed since the relatively unknown currency emerged on the scene. As of today, Bitcoins are increasingly being used as payments for legally legitimate services and products. Both online and brick & mortar merchants have begun accepting the digital currency due to its attractive low transaction fees. Typically, a credit card processing company charges up to 3% per transaction whereas Bitcoin transactions can be below 1%.

bitcoin-accepted-here-subway

Laws Governing theUuse of Bitcoins

In a recent federal case surrounding a Bitcoin Ponzi scheme, SEC prosecutors contended that Bitcoins were considered “security,” defined as; “any note, stock, treasury stock, security future, security-based swap, bond…[or]investment contract” according to U.S statute 15 U.S.C. § 77b. Federal Judge Amos L. Mazzant agreed, ruling that it was clear that Bitcoins can be used as currency and the “only limitation of Bitcoin is that it is limited to those places that accept it as currency.”

Currently, like many other forms of technology, there is no specific law governing its use. Initially, deemed “experimental currency” in a high-risk environment, U.S. government officials sought clarification of its legal use. After extensive testimony before the U.S Senate’s Homeland Security and Governmental Affairs Committee, the U.S. Justice Department described Bitcoin currency as a “legal means of exchange.”  Bloomberg Business reported that “government agencies from the U.S. Secret Service to the Financial Crimes Enforcement Network have weighed in to say that the virtual currency that’s designed to be difficult to trace has potential benefits, as well as risks.”

Treasury1

Future of Bitcoins

So what does that all mean?

Essentially, Bitcoins, as of now, are considered a legal form of currency capable of being exchanged in the U.S. and worldwide markets. So long as retailers, service providers, and online merchants who accept Bitcoins continues to grow, expect Bitcoins to remain legal. On average, there are currently about 30 Bitcoin transactions per minute, however that number is expected to grow exponentially, estimated a report published earlier this month. Bitcoin trading has increased nearly 500 times over the past year, and steadily increasing at rates predicted by industry economist. Moreover, since Bitcoins are created by miners operationg powerful servers capable of completing robust software algorithms embedded within the currency itself, expect Bitcoins volume to increase, both as miners and computing power increases.

How Can You Benefit from Bitcoins?

Bloomberg business news reports that savvy U.S investors have begun allocating more and more of their investments to Bitcoin currency in order to diversify their portfolios. Further, many Wall Street investment firms have begun offering investors options to buy Bitcoins for individual retirement accounts (IRA’s).  Bitcoin Investment trusts have also cropped up creating more than $15 million in funds. Simply put, if you’re interested in spreading your profits and losses out, Bitcoin investments may be a viable option.

Conclusion

While Bitcoins have been given the green light by U.S. treasury officials, it’s still a relatively new trading platform and should be approached with caution. Consequently, according to Bitstamp, in the time it took to compose this post, Bitcoins value increased by nearly a dollar!  However, Bitcoin trading volatility has been influx due to recent Senate inquires and the subsequent validation by U.S officials as an authentic currency. Therefore, once all the dust settles, and you get all the facts, maybe you’ll have a few (Bit)Coins to spare!

bitcoins2

34 thoughts on “Legal Standing of BitCoins

  1. Pingback: Maria Smith
  2. Sweet blog! I found it while surfing around on Yahoo News. Do you have any suggestions on how to get listed in Yahoo News? I’ve been trying for a while but I never seem to get there! Thank you

  3. Hello there! I know this is kinda off topic however , I’d figured I’d ask. Would you be interested in trading links or maybe guest authoring a blog post or vice-versa? My blog discusses a lot of the same subjects as yours and I believe we could greatly benefit from each other. If you happen to be interested feel free to send me an e-mail. I look forward to hearing from you! Excellent blog by the way!

  4. Hey! This post couldn’t be written any better! Reading this post reminds me of my good old room mate! He always kept talking about this. I will forward this article to him. Pretty sure he will have a good read. Many thanks for sharing!

  5. Aw, this was a actually nice post. In notion I’d like to put in writing like this furthermore – taking time and actual effort to make a really very good article… but what can I say… I procrastinate alot and by no indicates seem to obtain some thing carried out.

  6. My spouse and I totally like your site and find almost all of your articles to be what precisely I’m seeking. Do you offer other people to write content for you? I would not mind producing a post about lucky patcher apk or perhaps on a number of the topics you’re posting about on this website. Again, awesome information site!

  7. Hey! This is my very first comment on your site so I simply wanted to say a fast hello and say I truly enjoy reading your blog posts. Can you suggest any other websites that deal with real estate management? I’m as well truly curious about that! Thanks!

  8. You are entirely right! I loved looking through this article and I will get back for more as quickly as possible. My own internet site is dealing with zapya apps free download, you can check it out if you are still interested in this.

  9. Our LGV (Large Goods Vehicle) HGV training is based in East London, and our LGV/ HGV courses are taught by qualified DVSA LGV & HGV trainers. LGV was formerly known as HGV, where it used to be referred to as HGV Class 2 (now called LGV Category C) and HGV class 1 (Now called LGV Category C+E).

  10. I came right here from some other website relating to pokemon go game app and considered I should look at this. I like the things I see therefore I am just following you. Getting excited about finding out about your site back again.

Leave a Reply